Barbeque-Nation Hospitality Ltd

NSE:BARBEQUE

Earnings Call Analysis

Earnings Call Transcript 2025-Q1

[Operator]

Ladies and gentlemen, good day, and welcome to Barbeque-Nation Hospitality Limited Investor Analyst Call Q1 FY '25 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Bijay Sharma, Head of Investor Relations. Thank you, and over to you, sir.

[Bijay Sharma, executive]

Thank you, Malaika. Good evening, and welcome, everyone, to Barbeque-Nation's Q1 FY '25 Earnings Conference Call. For today's call, I have with me Mr. Kayum Dhanani, Managing Director; Mr. Rahul Agrawal, CEO and Whole Time Director; and Mr. Amit Betala, CFO. We will begin the call with Mr. Kayum sharing his perspective on key highlights for the quarter. This will be followed by a detailed discussion on business performance and outlook by Mr. Rahul, post that we'll open the forum for an interactive Q&A session. Before we begin, I would like to remind you that some of the statements made in today's conference call may be forward-looking in nature and may involve risks and uncertainties. Kindly refer to the earnings presentation for a detailed disclaimer. I will now hand over the conference to Mr. Kayum Dhanani. Thank you, and over to you, sir.

[Kayum Razak Dhanani, executive]

Thank you. A very good evening, ladies and gentlemen. I take the pleasure in welcoming you to Q1 FY '25 conference call of Barbeque-Nation. The operating environment remained challenging in Q1 and have been so far last few quarters. However, we are seeing gradual month-on-month improvement in SSSG numbers during the last 4 months and remain hopeful that things will gradually improve during the rest of the year. As you are aware, during the previous years, we had chosen to focus on existing network and temporarily paused restaurant additions with an intention to protect margins and cash flows. We are happy to note that our margins have been improving on a year-on-year basis for last 3 quarters. We expect the margins to further improve with gradual improvement in the demand scenario.

Though our approach led to temporary reduction in our year-on-year revenue, we are pleased to see our operating margins improving. The benefit from various cost and efficiency initiatives undertaken has delivered positive margin growth on year-on-year basis. While our same-store sales growth was negative, our same-store EBITDA growth was positive. Barbeque-Nation's core business has delivered mid-single-digit same-store EBITDA growth driven by gross margin improvement. Our premium dine-in brands that is Toscano and Salt are growing well and have delivered high operating margins. Our International business continues to perform well. Though we had temporary impact in sales due to floods and prolonged rainfall in Dubai. We are focused on maintaining best-in-category guest experience to drive dine-in footfalls.

We have undertaken various food festivals in Barbeque-Nation and launched seasonal special menus in Toscano and Salt. We are continuing to invest in our assets and designs to give the best in category experience to our guests. We are also on track to achieve 25 to 30 new stores additions in FY '25. During the quarter, we opened 4 new restaurants, all of which are with upgraded designs. We are targeting to add 100-plus restaurants over the next 3 years and achieve a network of 325 restaurants by FY '27. Over the years, we have built strong tech-driven back-end process to scale brands, and it's probably the best in the casual dining category in India. We believe these properties -- back-end systems will help us scale other existing and future brands in our portfolio. Over the years, we have maintained industry-leading margins, and we'll strive to achieve these and generate strong cash flows to drive shareholder value. Thank you, and I would now hand over to Rahul to walk you through the performance in detail. Thank you.

[Rahul Agrawal, executive]

Thank you, Kayum. Good evening, everyone. During the quarter, we reported a revenue of INR 306 crores, a decline of 5.6% on a year-on-year basis, and a growth of 2.6% sequentially. The year-on-year decline in revenue was primarily due to negative same-store sales growth, around 4% impact was due to store closures in the previous year, and controlled new store additions last year. We reported negative SSSG of 7.4%. While we continue to navigate the industry challenges around subdued discretionary spend, few company-specific factors also negatively impacted SSSG. In Barbeque-Nation we had base impact of relatively higher sales from value promotions undertaken in quarter 1 FY '24, which will discontinue subsequently.

Also being predominantly a non-vegetarian brand, Barbeque-Nation's sales were also impacted by Mahatva festivals, which was not in the base quarter. In our premium CDR segment, that is Toscano and Salt, there was onetime impact of liquor serving restaurants being closed during general elections in few states. And our International business,also got temporarily impacted due to heavy rains and floods in Dubai. Our dine-in/delivery mix continues to be 85% to 15%. Gross margin for the quarter increased by about 400 basis points on a year-on-year basis, around 80 basis points improvement was due to the classification adjustments. If you remember, we carried that out in quarter 3 FY '24, wherein employee food costs shifted from cost of goods sold to employee costs. And the balance improvement is due to better realizations in this quarter as compared to quarter 1 FY '24, and balance improvements is due to lower input cost.

Restaurant operating margins increased by 200 basis points, driven by better gross margins and cost controls. This is despite the operating de-leverage from negative SSSG. Consolidated operating EBITDA for the quarter increased by 8.8% to INR 51 crores. Reported operating margins also increased by 220 basis points compared to last year to 16.6%. Adjusted operating EBITDA, that is after the impact of Ind AS II6 grew by 18% to INR 21 crores. Adjusted operating EBITDA margins for the quarter was 6.9%, an improvement of 140 basis points compared to same period last year. We also maintained the robust EBITDA to cash conversion and delivered around INR 20 crores of cash profit, an increase of 17.4% compared to same period last year. We've been focused on maintaining best-in-category guest experience to drive our dine-in growth.

We continue to invest in our restaurant culinary experience and restaurant asset upgradations to drive our core dine-in business. We added 4 new restaurants during the quarter and closed 2 restaurants. At the close of the quarter, we had 219 restaurants, which included 186 restaurants of Barbeque-Nation in India, 8 Barbeque-Nation restaurants in international markets and 25 restaurants of Toscano and Salt, out of which Toscano was 17 and Salt was 8. In the near to medium term, our growth would be network-linked along with SSSG improvement. We plan to add 100 new restaurants by FY '27, which will be broad-based across our brands. We're excited to build a portfolio of scaled F&B brands and remain optimistic that these initiatives undertaken by us, coupled with network expansion, would further enhance our operating performance. Thank you. With this, we can open the session for Q&A.

[Operator]

[Operator Instructions] The first question is from the line of Harit Kapoor from Investec.

[Harit Kapoor, analyst]

Congrats on good margins. I just wanted to check with you on the -- some even internal issues that you mentioned, some of these challenges would not have been there in the month of June and July. So I was just wondering, how have you seen the kind of trend shaping up for you as the quarter progressed? Is something...

[Operator]

Sorry, to interrupt sir. Mr. Kapoor, you have a lot of disturbance in your background.

[Harit Kapoor, analyst]

Yes, please hold on one second, please. Yes, is this better?

[Operator]

Yes, please go ahead.

[Harit Kapoor, analyst]

Okay. Yes, yes, so I just wanted to check on some of these issues that you mentioned were largely April and May centric. So if you could just help understand how June and July has trended if the performance from an SSSG perspective has been better? And also going into Q2, we do have the impact -- we did have the impact in the base quarter of an extended morning period last time around, which affects at least non-veg a little bit more as well. So in that context, how do you see the trend shaping up over the next quarter or so?

[Kayum Razak Dhanani, executive]

So yes, the one-off that we mentioned are largely April and May phenomena. If you look at our April SSSG was down almost double digit. This subsequently improved in both May and June. And for the overall quarter, we had around 4.7% negative. And if I look at the first 4 weeks of July, we are approximately minus 3%. So yes, that trend is improving, and that gives us that confidence from where we were in the month of July to May and June to -- sorry, where we were in the month of April to May and June and July is slightly better. Yes, quarter 2 last year was largely impacted because of Adhik masa. Now also we are -- we have Shravana going on, which impacts our business in some manner. Despite this, we are at minus 3%. My hope is that as we enter into August and Shravana ends around 20th of August, we will have close to 1 month to play and then Shradh starts. So quarter 2 generally is the weakest for us, but I hope that the negative trend that we saw in quarter 1, is not continuing in the same way in quarter 2. I think we are seeing positive numbers in -- trend-wise in the month of July.

[Harit Kapoor, analyst]

Got it, got it, got it. And the second thing is on dine-in. I mean while you're not a QSR, you're a CDR business, but QSRs continue to have weak kind of dine-in performance. Dine-in as an overall space seems to have been a little bit more weak over the last 4, 5, 6 quarters. I just wanted to understand what is kind of your prognosis of demand, consumer behavior, et cetera, et cetera, for your price points? That would be very helpful.

[Rahul Agrawal, executive]

So yes, dine-in has been impacted much more but at least for our brans and as you know, generally the demand decline has largely been on the value segment. We consider Barbeque-Nation as more of a value brand, whereas our other premium CDRs like Toscano and Salt are premium brands. There our SSSG numbers have been positive, if you look at last year full year and barring the impact of few restaurant closures because of elections. This year also overall numbers have been just flattish, right? So the impact has been more in Barbeque-Nation. And in Barbeque-Nation, while dine-in has been, by and large, impacted, we have core group level demand that we satisfy. And that business is not directly impacted because of any other channel that has come up, right? And if I look at regional shift between our dine-in business today for the month of July, for example, we're already seeing things in positive SSSG in our North and East market, West is approximately flattish, but South is actually negatively impacted much more than other regions.

[Harit Kapoor, analyst]

Okay, understood. Understood. And the third thing was on the 100 store target for next [ year ]. Could you just help to understand how much of this in your view will be Barbeque India-led and how much of it will be non-Barbeque-India-led. And so basically, everything else, one side and Barbeque India one side. So in terms of expansion over the next 3 years?

[Kayum Razak Dhanani, executive]

Yes. So around 12 stores will be from Barbeque International, which is between 3 to 4 store every year. So that's one, around 40 stores will come from our Premium CDR between 2 brands, which is Toscano and Salt. So we'll do around 10 to 12 stores every year of these. And balance 50 will come from Barbeque India.

[Harit Kapoor, analyst]

Got it, I'll come back for more.

[Operator]

[Operator Instructions] Next question is from the line of Palash Kawale from Nuvama Wealth.

[Palash Kawale, analyst]

Congratulations on margins. Sir, my first question is around gross margin. So could you just explain in details so what are the different drivers of margin expansion? And have we taken any price hikes in last 1 year?

[Amit Betala, executive]

So 2 parts to it. If you look at our gross margin versus quarter 1 of last year and quarter 1 of this year, there is almost 400 basis points change. And if you look at our past quarter results, you will see that in quarter 3, based on the auditor's thing, we started reclassifying the cost of meals that are served to employees at the store level largely as move from cost of goods sold to employee cost. And that gave us a benefit of approximately 80 basis points, which is then also in the current year. And in quarter 1 of FY '24, we had a lot of offer driven growth, which was -- which has reduced our average valuation. So to that extent, yes, there is a price difference. But if you compare our gross margins with the sequential quarter 4, there is a decline in gross margin of approximately 70 basis points. And that is largely because of increase in meat item, largely chicken in quarter 1. And also because of another express offering that we're running in some of our Tier 2 markets, which is at lower gross margin.

[Palash Kawale, analyst]

Okay, sir. And sir, what was the contribution of value sales last year in Q1?

[Amit Betala, executive]

So we ran very aggressive Happy Monday, Tuesday offers, which is -- wherein the prices there around INR 599 as compared to our regular prices of around INR 600, as compared to our regular prices of around INR 850 also today. And these ran for 2 days, which is approximately 30% of the month, of the quarter and this ran in approximately 60% to 65% of our outlets.

[Palash Kawale, analyst]

Okay. And sir, what is the -- that stable gross margin that we are looking into for FY '25 and FY '26, given the chicken and meat prices remain stable?

[Amit Betala, executive]

No, so this is -- 68% is the -- at the current pooling structure, 68% margin is stable for the full year. I think after that, we have seen those prices also coming down in the month of July, we've already seen that benefit coming in. Also, prawn prices have also reduced a bit in the current quarters, in the ongoing going quarter, which will help us. So I think full year basis 68% is a decent number.

[Operator]

[Operator Instructions] The next question is from the line of [ Chaitanya ], an Individual Investor.

[Unknown Attendee]

I had 2 questions majorly with respect to opening of new restaurants. So first, what is the CapEx for opening a new Barbeque-Nation restaurant, and what would be the amount of pre-operating expenses that form a part of this CapEx? And second, how much time does it take for a new restaurant to ramp up? And what will be the expected payback period?

[Amit Betala, executive]

So our CapEx is now approximately INR 3 crores per store. Our preoperative would account around 10% on these CapEx, and our breakeven typically happens by 3 years and the payback periods are also around 3 years, if I look at long-term data of our store performances for each of these categories.

[Unknown Attendee]

Understood. And this pre-operating expenses, these are capitalized or expensed off?

[Amit Betala, executive]

Part of these are capitalized, part of these are expensed off. So anything which relates to addition of assets are capitalized and anything which is operating in nature are expensed off.

[Operator]

The next question is from the line of Resha Mehta from GreenEdge Wealth.

[Resha Mehta, analyst]

So this SSSG of negative 7.4%. Can you break that up for Barbeque-India specificity between dine-in and delivery?

[Rahul Agrawal, executive]

We don't provide that breakup Resha, but broadly, if you look at our mix of dine-in and delivery, it is similar to what it was in the -- in quarter 1 of last year. So the impact is pretty much proportional in both the cases.

[Resha Mehta, analyst]

Right. And also for the demand, if you can just talk about do you see the -- so you did speak about Q2 being the weakest, et cetera. But otherwise, how do you see the overall regular demand? Are there any green shoots, any form of improvement that you are seeing around?

[Rahul Agrawal, executive]

Yes, we are. So like I said, if you look at first 4 months of this financial year, there has been a sequential improvement from April to May and June to July now. While Q2 is weaker, Q2 also was weaker in the previous year. And SSSG-wise, the numbers are slightly better. But we would like to remain cautious because if you look at our trend in quarter 3 and quarter 4, we were -- so we're tracking pretty well. And then in quarter 1, the -- I mean at a business level, we're down more than expected, right? So I think our focus now is SSSG is what it is. Our focus is on improving our margins further. There are a lot of cost initiatives that have been taken last year, and that's the reason why -- one, is gross margin, but also at the cost levels also at -- if you look at also fixed cost levels at stores, there's a per-store expense decline.

So that has played out, and that is something that we will continue to tightly control, so that we try and defy as much as possible, the negative operating leverage that comes out in this business. And second focus is also on growth. I think our consolidation, rationalization, cannibalization, all of these impacts have gone. While we'll continue to maybe relook at our portfolio and close 1 restaurant in a quarter but the growth of new stores is right on top in our agenda. And a good thing is that the growth is very well spread out across brands and markets, which will also reduce the impact of negative margins that comes from the new store expansion. So that's the plan. And over 3 years, looking at it, we'll see that markets will sort of change and will give us that benefit.

[Resha Mehta, analyst]

Right. And is there any seasonality that's been between Q4 and Q1?

[Rahul Agrawal, executive]

Yes, Q1 normally is better because of summer holidays in most of the places. So family demands go up. Quarter 4, you get the benefit of first weeks in -- of January, but February, number of days are lesser. So that impacts a lot. And March demand from families normally drops because of kid's exams and those sort of stuff. So generally, historically pre-COVID our quarter 1 versus quarter 4, quarter 1 has been marginally better.

[Resha Mehta, analyst]

And lastly, on your SSSG, which is negative 7.4%. So if you take out the stores that were closed, then what will the SSSG look like?

[Rahul Agrawal, executive]

So we had mentioned there are 4 factors specifically. And if I put all of these together, we believe there is an impact of approximately 3% on SSSG because of that. So adjusted for that in our view it is around 4.5% which has declined, eminent decline because of market factors.

[Operator]

[Operator Instructions] Next question is from the line of Bhavin Pande from Athena Investments.

[Bhavin Pande, analyst]

So just wanted to understand, recently vegetable prices have increased significantly. So will we see any impact on gross margins this quarter?

[Amit Betala, executive]

So don't see much. The cost of vegetables in our overall purchase basket is relatively smaller. And even if we see mid-single-digit inflation on those, it really doesn't impact our gross margins as such. I think the real change happens from meat basket, which is chicken, prawn, mutton and fish.

[Bhavin Pande, analyst]

Okay. And expanding on that only. So when we look at sort of non-veg or meat market in India, every quarter there could be some period where there's some festival and the consumption gets delayed. So is there a way to make business immune from this pattern? Or do you think it's part of the business, which should be recovered in a quarter, which has minimal of these days?

[Amit Betala, executive]

No, it does so -- and we do have our sourcing strategy for each of these commodities. And based on movements of prices, we also move our inventory levels across various markets. Out of all the markets, 1 market, we source is chilled rather than frozen. And in that market, sometimes the price goes up, couldn't really say why, then there is some impact, that also gradually will shift into frozen and once we do that, then we can further streamline this -- in this commodity.

[Bhavin Pande, analyst]

Okay. Sir, but I still could not understand the -- I'm talking about the cyclicality part of it for the non-veg business, so from a demand perspective from a consumption perspective. So do you think is there a way to make business more immune from the cyclicality that comes with the festivities being around?

[Rahul Agrawal, executive]

No, you mean on the cost side or on the revenue side?

[Bhavin Pande, analyst]

Revenue. The consumption, not the demand side. Sorry, I couldn't -- didn't mention clearly.

[Rahul Agrawal, executive]

Revenue side.

[Bhavin Pande, analyst]

Yes.

[Rahul Agrawal, executive]

So the seasonal factors do impact. So when we say that quarter 2 is seasonally the weakest quarter, it happens because quarter 2 also has a lot of festive days or veg-only days like Shravana, Shradh in which specifically in North India, Hindi-speaking guys, they don't consume non-veg, and that drops significantly. So maybe on the positive side, during festive season's second week of December onwards to around 1st week of January, there's a lot of going out, which helps our dine-in business a lot. So to that extent, and our business is a high operating leverage business so even if the demand moves 10% plus minus, it starts impacting in your overall top line and margins.

[Bhavin Pande, analyst]

Okay, okay. And do you think post-COVID, the dine-in business and the way people spend on restaurant has changed significantly or do you think it's just a patch of demand slowdown due to high inflation. And once this inflation is behind us, we can see streams of demand that we saw post -- pre-COVID? Or do you think now because the aggregate is coming in, delivery will also account for significant chunk of the business?

[Rahul Agrawal, executive]

No. So look, inherently, dine-in business have been around for many, many years, and dine-in is not just food, but it's also experience, right? I think, yes, delivery is growing across the segments. But delivery is also replacing mostly the home-cooking business, and also creating new demands, which were not serviced earlier because they are not going out and doing that or eating. For example, deserts, where-in earlier you had to go out and there was inertia, but now you can order in that. Specifically for dine-in segment, which is where the product is not just food but also experience, also ambiance, service, all of these put together and you have a great meal with your dear ones, that is a segment that is continuing to remain. It has remained in for many, many years and will not impact. I think delivery helps to the extent of giving one more channel of revenue and growing the market as such.

In terms of dine-in, one -- I think 2 trends that we see if I compare before COVID. One is that there is increased level of competition coming in. If you look at during COVID-times, there was some reduction in the overall industry level supply which pretty much benefited a lot of players during second half of -- during the entire calender year '22. And as COVID was behind us and new supply sort of kept coming in, this overall demand get -- got distributed across multiple players that's trend that we are seeing in the dine-in side of the business. The second trend is that there is clear drive towards premium experiences, and that's the reason why some of our premium portfolio brands while they are small, has done better.

And on the value segment, there is clearly an impact of lower money in the pocket because of inflation. So mix of all these factors, it has led to that decrease. Frankly, I'm only seeing some trends of stress in some of the smaller ones -- net number of unorganized small players, wherein they realize that with the SSSG numbers being lower, it's very difficult to sustain this operationally-heavy business. I think some of these consolidations, in my view, should also happen over the period of next maybe 4 to 8 quarters. And once that corrects, there will also be a normalization happening in our industry that we saw pre-COVID.

[Bhavin Pande, analyst]

Okay. And just contrary to what other listed QSR players are doing in terms of introducing new basket of products. Most of them are skewed towards the entry-level products. But when we look at broad theme of India, we are betting on our capita going for up, premiumization happening, where more gourmet restaurants, as you mentioned luxury dining, premium dining should pick up. So what do you think is the opportunity for listed players and QSR players like you to capitalize on it?

[Rahul Agrawal, executive]

No, so I'll restrain from talking about QSRs. I think I understand CDR very well, as compared to my understanding of QSRs. But I think I believe the opportunity in the country is for pretty much every segment. We have a large country and at least in the top 30 cities of this country, you can build a scaled business across brands as long as you deliver on the brand promise to your guests. And with that philosophy, I think we have an opportunity to build on our existing Barbeque-Nation, and we have opportunity to also build on our 2 premium CDR brands, Salt and Toscano which today are in 3 and 2 cities only. This year, we plan to enter 2 more cities in both the brands. And so overall, I think scale becomes a big advantage for restaurants. And we know the journey of last 10 years when we had to invest in our back end to grow 1 brand. And now that we have that advantage of the back end, we will try and take it up to other brands as we scale up.

[Operator]

The next question is from the line of Amruta from Wealth Managers (India) Private Limited.

[Amruta Deherkar, analyst]

So I've got 2 questions. The first is, do we offer the delivery service in the premium CDR segment in the Toscano and Salt?

[Rahul Agrawal, executive]

Yes, we do.

[Amruta Deherkar, analyst]

All right. And we have -- like for FY '24, roughly around 17%, 18% of the revenue came from the premium CDR and the International business. And from FY '24 to '27, we are looking to more than doubling this number of stores. So what kind of a revenue contribution are we targeting for FY '27 from these?

[Amit Betala, executive]

No, I think store economics would remain same. So gradually, there's a diversification of the portfolio happening and over the period of a few years, this will move in favor of the other brands.

[Operator]

[Operator Instructions] The next question is from the line of Pritesh from Lucky Investment.

[Pritesh Chheda, analyst]

Sir, I just wanted to know the sensitivity of restaurant operating margin to SSSG. What will be the sensitivity? For every 1% SSSG growth now, what should be the margin change?

[Amit Betala, executive]

So it ranges between 40% to 50%.

[Pritesh Chheda, analyst]

50% for every month?

[Amit Betala, executive]

Yes.

[Pritesh Chheda, analyst]

So for every 1%, SSSG gains 50 basis point margin, right?

[Amit Betala, executive]

Yes.

[Pritesh Chheda, analyst]

Any case, I had calculated 60 basis. I just wanted to confirm with this. And your comment is that on the SSSG side, based on your best guess when do you see the SSSG is improving?

[Amit Betala, executive]

No, I think with quarter 3, this should further improve. We are seeing this trend over last 4 months as we discussed in the previous part of the call. And these 2 months, both August and September also have some disturbances because of a lot of non-vegetarian days. So I think quarter 3 is the right time that where we can see that further improving.

[Operator]

The next question is from the line of Khush Gosrani from InCred Asset Management.

[Khush Gosrani, analyst]

I just wanted 2 data points, as earlier, we used to give new store versus mature store ADA revenue per store in margins. So if you could highlight how it has been in Q1 as well, that would be helpful.

[Amit Betala, executive]

Sir, so on the matured stores, we did revenue per store of around INR 5.9 crores. With restaurant operating margin of around 15%. In new stores, we did revenue per store of INR 4.6 crores with restaurant operating margin of 8%.

[Khush Gosrani, analyst]

8%, Okay. And what -- with -- if the SSSG improves, how -- what kind of these margins will look especially in new stores?

[Amit Betala, executive]

So the new store doesn't come into SSSG, but new store should have a natural co-relation of vintage, which should improve our margins.

[Khush Gosrani, analyst]

And the new store moves to a mature store after 3 years or after 2 years?

[Amit Betala, executive]

2, 2 years is how we calculate this.

[Khush Gosrani, analyst]

2 year, okay. And so then peak post-Ind AS margins when the SSSG improves can go back to like what we have done in 18.5%, 19% in Q3? For a mature store, if my data is right.

[Amit Betala, executive]

So Q3 I think should be better than that. Q3 should be 20% plus. Only Q3 also is seasonally strongest quarter for us.

[Khush Gosrani, analyst]

Okay, okay. True, true. Sure. And by year-end, what is the target number of stores that we want to do? So right now, we are 219 combined. So what would be our target by end of the year to reach?

[Amit Betala, executive]

So we will be anywhere between 240 to 245.

[Khush Gosrani, analyst]

245. And last question from my side. Sir, what is the per store CapEx for a Toscano and for a Salt?

[Amit Betala, executive]

It's around INR 3 crores for both 2. They are slightly premium so CapEx per square feet is slightly higher.

[Operator]

Thank you very much. Ladies and gentlemen, that was the last question for today's call. On behalf of Barbeque-Nation Hospitality Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.