Goodyear Tire & Rubber Co
NASDAQ:GT
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
7.63
15
|
| Price Target |
|
We'll email you a reminder when the closing price reaches USD.
Choose the stock you wish to monitor with a price alert.
This alert will be permanently deleted.
Goodyear Tire & Rubber Co
You don't have any saved screeners yet
Good morning, and welcome to the Cooper Tire and Rubber Company's Third Quarter Earnings Call and Webcast. At this time, all participants on the call are on a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded.
I would now like to turn the conference over to Jacob Drerup. Please go ahead, sir.
Good morning, everyone, and thank you for joining the call today. This is Jacob Drerup, Cooper's Manager of Investor Relations. I'm here today with our Chief Executive Officer, Brad Hughes; and Jerry Bialek, our Interim Chief Financial Officer.
During our conversation today, you may hear forward-looking statements related to future financial results and business operations of Cooper Tire and Rubber Company. Actual results may differ materially from current management forecasts and projections. Such differences may be a result of factors over which the company has limited or no control. Information on these risk factors and additional information on forward-looking statements are included in the earnings release we issued earlier this morning, and in the company's reports on file with the SEC.
During this call, we will provide an overview of the company's third quarter 2020 financial and operating results as well as a business update. Our earnings release includes a link to a set of slides that summarize information included in the news release and in the 10-Q that will be filed with the SEC later today.
Please note that we will reference certain non-GAAP financial measures on this call. The linked slides include information about these measures and a reconciliation to the most directly comparable GAAP financial measures. Following our prepared remarks, we'll open the call to participants for a question-and-answer session.
Now, I'll turn the call over to Brad.
Thank you, Jacob, and good morning, everyone. I want to start out this morning by thanking Cooper teams around the globe, as well as our customers and partners for continuing to perform through these still uncertain times, showing great resilience as well as a strong commitment and loyalty to Cooper. Our third quarter performance demonstrates a level of achievement that could not be possible without many people coming together to meet the needs of the consumers who travel through life's journeys with confidence on Cooper Tires.
As noted in our news release earlier this morning, we had a very strong quarter that included net sales that increased 8.6% to $765 million, with increases in both the Americas and international segments. Market share gains in the U.S. driven by Cooper's 9% unit volume growth, which far outpaced the U.S. TMA, and was above the total industry. Consolidated operating profit of $172 million, or 22.4% of net sales, and Americas operating profit of $176 million or 26.6% of net sales, both represent all-time records for Cooper in any quarter.
Improved performance in our international segment with unit volume that increased by over 10% and operating profit of $9 million, which compared to an operating loss of $5 million for the same period last year. Continued significant generation of free cash flow, ending the quarter with nearly $500 million of cash, and over $1 billion of available liquidity. Any way you look at it, we had an outstanding third quarter and are confident that the strategic initiatives we have been pursuing are taking hold and driving the increased unit volume with more runway for future growth.
As a reminder, these initiatives include increasing our retail presence, by making Cooper products available at a greater number of retail points where consumers want to shop for tires. This effort is going extremely well. Not only have we entered into relationships with many new retailers, but Cooper has also been able to expand and continue to grow our business with existing customers. As stated previously, Cooper Tires are available in all of the top five tire retailers in the U.S., a direct result of our retail expansion efforts.
Additionally, we have seen strong growth on e-commerce platforms. We will continue to find ways to provide consumers with easier access to our brands and products, which are increasingly in demand due to our compelling value proposition. Another key strategic initiative is evaluating and upgrading our global manufacturing footprint, with a goal to have the right technology and capabilities, with the right production capacity in the right locations, with a competitive cost structure.
We bought out our joint venture partner in Mexico to take full ownership of the plant there to better leverage that low-cost facility. And in Asia, we launched a joint venture truck and bus radial tire plant in Vietnam. Disruptions caused by the Coronavirus, including two temporary government-mandated plant closures at the Mexico facility, and travel restrictions in Asia, have caused some delays in the ramp-up of these facilities, but we're pleased with our recent progress at both.
During the third quarter, the very strong rebound in demand for Cooper Tires required us to draw down inventories to below normal seasonal levels. Because we temporarily closed our plants for several weeks due to Coronavirus to safeguard the health and safety of our employees, we were not producing tires at a time when we normally would have been building inventory to meet higher seasonal demand. As a result of these factors and others, we expect our fourth quarter unit volume performance to be constrained by supply that will fall short of the strong demand we continue to see. In short, we have created a demand engine that will continue to strengthen as we move forward. But in the near term, product availability to meet this increased demand will be constrained.
Of course, we will continue to leverage and take full advantage of our global production footprint and capabilities as we move ahead. I will share more information on our outlook at the end of our call. I will now turn the call over to Jerry for a detailed review of the quarter. Jerry?
Thank you, Brad. Let's take a look at our third quarter results. On a consolidated basis, sales were $765 million, up from $704 million in 2019. This 8.6% increase was driven by $55 million of favorable price and mix, $4 million of higher unit volume, and $2 million of favorable foreign currency impact. Operating profit was $172 million or 22.4% of sales compared with operating profit of $53 million or 7.5% of sales in 2019.
Third quarter operating profit compared with 2019 was impacted by the following factors, which are summarized on our page 6 of the supplemental slide deck. $48 million of favorable raw material costs, $35 million of favorable price and mix, $2 million of lower manufacturing costs, and $1 million of higher unit volume. These were partially offset by $5 million of higher SG&A expenses and $2 million of higher other costs. The third quarter of 2020 included a $49 million benefit in operating profit from lower product liability costs related to an adjustment of the company's product liability reserves. A similar review in the third quarter of 2019 resulted in a benefit of $4 million. This, together with the normal activity in product liability expenses in each quarter, including current case activity and legal fees, resulted in a $40 million of lower net product liability expense for the third quarter of 2020.
Moving forward, we expect an ongoing reduction in our annual product liability expense of around $5 million per year compared to our historical annual run rate, excluding these adjustments. Diluted earnings per share were $2.42 compared to a diluted earnings per share of $0.58 in the third quarter of 2019.
Now moving on to our segment performance, starting with Americas tire operations. Segment sales for the third quarter were $660 million, up 9.6% from $602 million in 2019, as a result of $59 million of favorable price and mix, and $1 million of higher unit volume, which were partially offset by $2 million of unfavorable foreign currency impact.
Segment unit volume was up slightly compared to the same period a year ago. Our U.S. light vehicle unit volume increased by 9%, while the USTMA decreased by 1.2%, and the total industry increased by 8.1% for the period. Total industry volumes were positively impacted by nine USTMA members.
In Latin America, unit volume declined due to challenging market conditions and lower production levels as we ramped up our plant in Mexico, offsetting U.S. unit volume performance. Third quarter operating profit in the Americas increased to $176 million or 26.6% of net sales, compared with $68 million or 11.3% of sales in 2019. Operating profit included $39 million of favorable raw material costs and $34 million of favorable price and mix. The quarter also included $40 million of lower net product liability expense. These were partially offset by $3 million of higher SG&A expenses, $1 million of unfavorable manufacturing, and $1 million of higher other costs. Even after excluding the $49 million benefit from the product liability adjustment, this was an all-time record operating profit for the Americas segment in any quarter.
Now turning to our international tire operations. Net sales for the quarter were $142 million, up 7.5% from the third quarter of 2019. This result was driven by $13 million of higher unit volume and $4 million of favorable foreign currency impact, which were partially offset by $7 million of unfavorable price and mix. Segment unit volume increased 10.1%. The third quarter operating profit in our international operations was $9 million compared to an operating loss of $5 million in 2019. The quarter included $9 million of lower raw materials, $1 million of favorable price and mix, $3 million of lower manufacturing costs, $1 million of higher unit volume, and $1 million of lower SG&A expenses. These were partially offset by $1 million of higher other costs.
Moving to raw materials, our raw material index decreased 13.6% from the third quarter of 2019. The raw material index decreased 1.2% sequentially from 137.4 in the second quarter of 2020 to 135.8 in the third quarter of 2020. This was in line with our expectation to be significantly down on a year-over-year basis and slightly down on a sequential basis. As we look forward to the fourth quarter, we expect our raw material index to be down modestly on a year-over-year basis, and up modestly on a sequential basis.
Raw material prices have begun to increase from the low levels during the peak of the global pandemic. We remain cautious about our ability to forecast raw material costs precisely in this period of market volatility. Now to some corporate items. Other pension and postretirement benefit expenses decreased $3.9 million versus the prior year. This was primarily due to the company's improved funding position at December 31, 2019, as a result of favorable returns on plant assets.
The effective tax rate for the third quarter was 24.6% compared with 21% for the same period the prior year. The tax rate for the third quarter of 2020 was primarily driven by the mix of earnings among our different tax jurisdictions. The tax rate for the third quarter of 2019 included $2 million of discrete items that favorably impacted the tax rate. We still expect the full year 2020 effective tax rate of approximately 25%. The effective tax rate is based on forecasted annual earnings and tax rates for the various jurisdictions in which the company operates.
More detail on our taxes will be available in our Form 10-Q that will be filed with the SEC later today. Turning to cash flows and some balance sheet highlights. Capital expenditures in the third quarter were $24 million compared to $50 million in the same period a year ago. We still expect full year 2020 capital expenditures to be around the high end of our range between $140 million and $160 million.
Return on invested capital was 10.2% for the trailing four quarters. At the end of the third quarter, Cooper had $496 million in unrestricted cash and cash equivalents, compared with $137 million at the end of the third quarter of 2019. You will recall that the company drew down $270 million on our revolving credit facility during the first quarter. During the third quarter, the company repaid $240 million on its revolving credit facilities and has no remaining balance outstanding. The significant improvement in cash was primarily driven by strong operating results as well as our actions to reduce working capital, capital expenditures and discretionary spending.
With that, I'll now turn the call back over to Brad for our updated outlook.
Thanks, Jerry. As we noted in our press release, temporary plant shutdowns related to Coronavirus, combined with strong demand for our products, has driven our inventory levels below normal. We are working hard to increase production to help meet demand as we move into the fourth quarter.
Still, we expect that the strength of our third quarter performance will affect our ability to meet global demand for our tires in the fourth quarter due to limited inventory. This will result in modestly lower global unit volume for the second half of 2020 compared with 2019. Yet, we expect to achieve an operating profit margin within our stated midterm target of 10% to 14% for the second half of 2020, even excluding the $49 million benefit from the adjustment to our product liability reserve model in the third quarter.
We continue to believe that the Cooper brand and our value proposition resonates strongly with consumers, especially in these uncertain times. Our strategic initiatives are unlocking the relevance of our brand with customers and consumers, creating additional growth opportunities. We are on the right strategic path, and our team will continue to drive our initiatives to achieve our long-term goals.
With that, let's move to your questions. Operator, will you take the first question, please?
Thank you. [Operator Instructions] And our first question will come from James Picariello with KeyBanc Capital Markets. Please go ahead.
Hey, good morning, guys. Congrats on a fantastic quarter here. Can you talk about the quarter's price/mix, almost an 8-point benefit to consolidated revenue, all driven by the Americas? How much of this attributes to positive mix as opposed to price? And my follow-on, on the industry pricing front, are you seeing other suppliers put through increases in the fourth quarter? We saw one formal announcement from a tier two, just wondering if tier ones have made a definitive move on pricing, as far as you can see.
Well, with regard to our price and mix, James, and thank you for acknowledging the quarter. We're really pleased with the results and pleased that we think the momentum is going to continue as we build up our production capability to meet the demand that we're seeing. So -- but with regard to price and mix, I mean, we're seeing the advantage or the benefits of the pricing actions that we, along with the industry, took in the spring. And there has been a little bit of activity subsequent to that. But I would suggest that from what we've seen, the majority of the pricing activity in the industry is related back to that spring activity, and that's true for us.
We did, on top of that, have some benefit on the mix side of the equation. As we've been suggesting, we anticipated what's going to happen, and so ours is a reasonable balance between both the price and the mix.
Got it, okay. And then do you expect to underperform USTMA in the fourth quarter due to your inventory shortage? I mean, obviously, it's a good problem to have. You outperformed USTMA by what, nine points this quarter? Just wondering what your thoughts are there. And I mean, you should get some manufacturing benefit in the fourth quarter, assuming that you're going to have all of your lines -- many of your lines running at full capacity, right, to build back these inventory levels?
Yeah. So without knowing exactly what the USTMA is going to do, we are going to -- we have very low levels of inventory right now. We are ramping up production, and we're taking full advantage of our global footprint to make sure we can meet as much of that as possible. But based on what we see right now, we think demand is going to exceed the supply that we have. And with the level of inventory that we came into the fourth quarter with, we're likely going to be behind the USTMA just because we can't provide enough product to meet the demand that's out there.
So it's clearly not a demand situation right now. It's a production and inventory availability issue. It is a good thing. And the better news is that we're continuing to build up and ramp up our production capabilities, particularly at our Mexico facility, but it's global in terms of the response that we're coming to this with from a production standpoint.
And so I think that we may not begin to build inventories in the fourth quarter, but I think we're going to be in a position to start moving in that direction as we get to the early part of next year. So for now, we're going to be constrained a little bit. But overall, the great news is the demand and the expectation we have for that to continue.
Got it. I'll take the rest of my questions offline. Congrats again.
Thanks, James.
Our next question will come from Rod Lache with Wolfe Research. Please go ahead.
Good morning, everybody. I was hoping, just maybe you can give us some color from your discussions with the channel on what actually is happening with respect to sell-out. And it's pretty clear that just because of supply constraints and COVID shutdowns that there was a lot of inventory depletion over the course of the past couple of months. But obviously, miles driven has been low. And are you able to get a sense of what really is happening in the end markets at this point?
Well, I think overall, Rod, that it remains relatively strong. I mean, given the circumstances with COVID and the like that I think that it's probably stronger than we as an industry anticipated. I think that started in the second quarter, and I think that's continued into the third quarter. From what we can see at an industry level, the channels are still pretty tight on inventory, and that suggests that there is reasonable sellout activity, even as we as manufacturers are beginning to catch up a little bit with the demand side.
Now beyond that, given our outperformance of the USTMA and actually the industry, we're in a little bit sharper situation right now. But we feel reasonably good about what we see with regard to industry sell-out.
Interesting. And I was also hoping, just if you've kind of analyzed the drivers of your outperformance, there are probably a number of different things. You've had -- you've been talking for a while about new distribution channels. Do you have a sense of how much that contributed?
And there was also, at least for part of the quarter, I think that there were some unusual circumstances with some of the large mass merchants being shut down and independents taking a lot of market share. So, is that something that you feel is maybe aberrational and that would reverse, or is there -- is this something that's more sustainable for you?
No, we clearly think this is sustainable. When we look at the volume and where it's coming from, it's really across the board, Rod. So we've -- as you know, our teams have been working really hard to expand our retail distribution points, and that's with our traditional customers. And through our traditional distributor channels out to our partners and some of our program retail programs, but it's also with the larger national retailers, whether they be mass or tire retailers.
So, with the work that our teams have been doing on -- we're really starting to see all those things begin to contribute to better demand. And frankly, we're hearing, again, from different types of customers and through different channels that where our product is positioned with the value proposition that, in particular, our Cooper brand offers that we are really well positioned for where consumers want to buy tires from a price and performance perspective right now. So, we feel really good about what we're seeing, and we think it's sustainable.
Terrific. Thanks for that.
Thanks, Rod.
Our next question will come from Bret Jordan with Jefferies. Please go ahead.
Hey, good morning, guys.
Good morning, Bret.
As we look at the inventory availability and its relative tightness, how do you think about maybe price increases in the balance of the year, is the bias across the board up?
Well, we'll continue to monitor what is happening in the industry and make sure that we're remaining competitive for our customers and with consumers. And -- but certainly, we'll be monitoring to see if there is activity. And if it's up, we certainly will be prepared to take advantage of that.
And we'll watch. I mean, there's a lot -- there's some recent volatility around raw material prices, and that -- we'll have to see how that influences pricing activity. We are always at the ready, but our primary objective is to ensure that with the value proposition that we offer, which I was just alluding to, how well that's playing in the marketplace right now. We're going to want to make sure that we're staying where we need to be competitively for our customers and with consumers and feel like we're in a good position to do that.
Okay, and then I guess a follow-up. When you think about the U.S. unit growth, and you did comment about the expansion of your distribution channel, sort of a follow-up on the last question. Could you kind of bucket the unit growth from new customers versus legacy customers year-over-year?
Yeah. We're not going to dimension it other than to indicate that it was -- it's across the board. So, we really are seeing growth from all of those, whether it be the big national retailers, including the mass merchants, e-commerce is contributing more every quarter, and we're seeing increases in our traditional distributor channels. So, the balance is important because it positions us to continue with this demand engine that we've created and to sustain it.
Okay great. Thank you.
Thanks.
Our next question will come from Ryan Brinkman with JPMorgan. Please go ahead.
Hi, thanks for taking my questions. You've discussed that your own inventories are lower. This will constrain -- temporarily constrain your shipments. What do you think, though, that the inventory picture looks like for the industry as a whole? What do you think the balance of supply and demand for tires generally means for pricing for the industry or for Cooper in 4Q and beyond?
And then also, what is your ability to replenish inventories look like beyond 4Q? Should we think about there being a tailwind in 1Q? Does it last for -- does it take kind of the first half of next year to catch back up in terms of your ability to ship more tires than would be ordinarily indicated by the retail demand in that period?
Alright. So, to the first question on -- based on the information that we see, I would suggest that as an industry, inventory levels are tight. I think they continue to be tight. There may be certain pockets where that's not true, but I think an overall assessment is that they remain tight, and we all are trying to ramp up to meet the demand that is occurring, which is great. And again, we're a little bit ahead of that in terms of the demand side of that equation.
When I went to school, they used to say that if you've got more demand than supply, then that is not a bad position for pricing. So, we'll continue to monitor. I think the industry will continue to monitor what's happening with raw materials. And as an industry, again, I've been in this now for a decade, and it's remarkable to me how disciplined the approach is to costs that affect all of us. When that happens, there seems to be a response from the pricing side. And with low inventories right now, I would probably suggest that the industry is in a position to do that if it's warranted.
With regard to our production and supply, I think we're going to begin to round the corner in the fourth quarter. We've been ramping up. We've gotten over the two mandated shutdowns in Mexico and are ramping up that facility, and making it truly a Cooper production facility, now that we own 100% of that. We've been ramping up in the U.S. facilities, adding bolds as quickly as we can to help meet demand. And frankly, we're leveraging our global footprint. We announced that we're expanding our Serbia facility.
So we're looking at positioning products in a way through our network globally to ensure that we're going to be able to ramp up as possible. So, I think that we will begin to turn that corner on inventory going into the beginning of next year. And that will be dependent on the demand side of the equation and how fast that continues to move forward relative to that production. But I think we'll be turning the corner in the fourth quarter, and we'll start to be positioned better with inventory at the beginning of next year, but it may take a little while.
Okay, great. Thanks. And I was going to sort of next ask you to kind of unpack the price/mix raw materials spread. You've already made a number of comments on pricing, but just maybe as results to mix and raw materials, I mean, as big as spread, I think you had to go back to third quarter of 2012 to find as big of a positive contribution.
Relative to raw mats, I imagine continued tailwind, but grows increasingly less positive, but remains positive, at least for a couple of quarters. How should we think about that? And then, with regards to mix, what do you think there over the next few quarters?
Yes. So on the raw material side of the equation that you started with, our guidance is that our expectation for the fourth quarter is up sequentially, but that would still be down year-over-year based on what we can see right now. And so, that is a bit of a tailwind there. And our teams do -- our focus is always on making sure around availability. We don't see any issues there around availability of raw materials. And then, they want to make sure that we're buying at or below the prices that we think our competitors are buying yet. And so, they're continuing to do things to try and protect our position there. And I think they've done a good job.
With regard to mix, we still have opportunities. They move quarter-to-quarter, but we still think there are opportunities for us over the next quarters to continue to advance mix. It may not be every quarter, but when you look at it over a continuum and a longer period of time, we think that there's more runway on mix as well.
Okay, great. Thanks. And then just lastly from me, relative to any potential change or non-change in administrations in the U.S. with the presidential election here, it could be a number of changes, tax, regulatory, etc. I've just got to ask on tariff, though.
Can you remind us the latest that you're seeing on tariff, including with regard to possible tariffs from Southeast Asia? And then as -- if there were a change, is it just the case that right now, the case rests with this international trade court, the composition and the numbers of which have already been decided, and so there's really no impact there? Or does the administration have some sort of influence on how that court or others could rule?
Yeah, there's a lot there, and I'm not going to suggest that I'm smart enough to get it all the pieces there. I would say in the near term, what we know is that there's a very near-term ruling to be coming out on the countervailing duty as it applies to Vietnam, which is one of the four Asian countries that is in question here, that could be as early as tomorrow.
And then by around the end of the year, early next year, we're expecting the first round of preliminary duty rulings to be coming on the anti-dumping portion of that will include Vietnam, plus the other three countries of Thailand, Taiwan and Korea. Historically, changes in administration have not had a significant impact on the members of that decision-making body. But who knows. But I mean, I would say, historically, that has not been something that changes or changes right away, certainly.
Okay. Very helpful. Thank you.
All right.
[Operator Instructions] Our next question will come from John Healy with North Coast Research. Please go ahead.
Thank you. Congrats on the third quarter, guys. Wanted to ask about just kind of the margin outlook for Q4. My math could be wrong, that's often the case. But if I back out the product liability adjustment, kind of implies a high-teen operating profit level in Q3, and you guys are saying in your 10 to 14 range for the second half. To me, that implies like mid-single digits to low double digits. But is there any reason you'd fall outside of that 10 to 14 for Q4, do you think?
Well, again, the guidance that we've given -- we thought it was more appropriate, given how much sell-out we had from inventory during the third quarter, which generally, from a seasonality perspective, would have been spread over the third and the fourth quarter. But because we weren't able to replenish that with the shutdowns that were appropriate, given the health and safety considerations for our people during the second and third quarters and the ramp-up that subsequently occurred.
We just --- to put in perspective the strength of the business right now, we thought it was more appropriate to look at it on a second half basis, and I'm going to stick to that in this instance, John. And to indicate that we're going to be in that 10% to 14% range on -- because we think that's the best indicator of how the business is trending.
Now, as we are able to begin or reach those ramp up positions where we're meeting the demand side of the equation and able to build back on some additional inventory, again, we'll be able to look at a clearer picture as we get into next year. But I really think just to understand -- because we feel very good about how the business is performing right now. And when you look at it in the time space of the second half, that's really indicative of where we're at right now with a demand engine that's still going.
Great. And I just wanted to ask kind of how you interpreted some of the industry statistics in Q3 with USTMA being down, but the imports being up meaningfully. Do you think that was pull forward of imports, maybe trying to get ahead of the tariffs, or was that more reflective of, hey, the legacy domestic manufacturers, we're struggling with largely a production standpoint? How do you interpret that big pickup in imports that we saw in the quarter?
Yeah, I -- again, one person's view, but I would suggest that we look at that as a combination of both. I do think that number one, tire demand returned more quickly than we were able, as an industry, particularly in North America, to ramp our production up to meet it, and so people would be looking for alternatives to meet consumer demand.
So that would be an impact on -- but I think, clearly, there were some import activity taking place to try and get ahead of the tariffs that many are anticipating are going to occur. I mean, when you look at those four Asian countries, I mean, I think we've said it this way before, but that represents about 28% of the total units that are sold in the United States. And so it's a big piece of the market.
And so, I would expect that wholesalers and distributors are going to try and get a little bit ahead of that to the extent that they can. I think the good news for us is even in that environment, where there might be some stock build, that we were still ahead of the industry and see real sustainable growth with our demand.
Great. Thank you, guys.
Thank you.
This concludes our question-and-answer session. I would like to turn the conference back over to Brad Hughes for any closing remarks. Please go ahead, sir.
Yes, thank you. And I just want to reiterate the thank you to the Cooper team and their families around the globe, along with our customers and our suppliers for coming together to contribute to a great result, and for their ongoing efforts to support our drive toward delivering this winning strategy that's taking hold right now. So thanks to all of you for participating today, and please stay safe and stay healthy. Thank you.
The conference has now concluded. Thank you for attending today's presentation, you may now disconnect