Atea ASA

OSE:ATEA

Earnings Call Transcript 2018-Q4

[Steinar Sonsteby, Chief Executive Officer]

Welcome. Welcome to Atea's Q4 and 2018 result presentation here in pretty cold and snowy Oslo.This has been another quarter in Atea where we build competencies, capabilities and take market share. Some countries have not grown as fast as we'd expected, but overall, we're very satisfied with the quarter. It's also been the first quarter in 4 years where Denmark has regained its position in the market.And speaking about Denmark, there is some noise in the market, if I could say that, for some reason at certain times. For instance, we've heard that Apple put our agreement in Denmark on hold, which I have publicly stated had no impact on the company. And to be very specific, our revenue in Denmark was down NOK 21 million on Apple for the whole year, which nothing of it comes from Q4. We have other agreements and we will be back as a certified Apple reseller in Denmark.I know there is also a lot of interest from how Denmark is doing on public and enterprise. And as we stated at the Q3 presentation, we believe that public would normalize during Q4 and that's exactly what's happened. Public is at the same level in Q4 '18 as Q4 '17. Enterprise we said would take a little longer and enterprise was down about 10% in Q4 '18 compared to '17.And just to make it clear, we have no discussions with any other vendors to react on the situation in Denmark after the verdict in June last year. Sorry, our revenue came in at NOK 10.2 billion in the quarter and it's an unbelievable number, and we are very, very proud of everything we do with our customers to reach that number. The number was slightly influenced by a Q4 shortage of processors and about NOK 250 million of orders were not delivered in Q4 and will be delivered in Q1 because of this international problem.EBIT came in at NOK 309 million and cash flow at a record-breaking more than NOK 2.2 billion in Q4 and further proving that Atea is pretty healthy as cash flow, as probably most of you follow the best and most, is the most important number of them all.Based on this, we'll keep the -- or we'll propose to the general assembly that we'll keep the dividend at NOK 6.50. We know there has been some discussions and we have, of course, also discussed this and with the development we see, this number will most certainly go up in the years to come, but we also see some interesting investment possibilities in the market and for that reason, we keep the dividend at NOK 6.50.And as always, I'll leave it to Robert to give you all the good news.

[Robert Giori, Chief Financial Officer]

Thank you, Steinar. We'll now take a closer look at revenue and profit development across the countries in which we operate.Starting with Norway, where sales were down, but profits were even with last year. Total revenue in Norway was NOK 2.7 billion, a decline of 2.7% from a very strong Q4 last year. In general, there is less concentration of product shipments in the fourth quarter than in prior years. However, since January, sales volume has once again picked up.Product sales were down by 4.8% in the fourth quarter with fewer large hardware deliveries to the public sector. Services revenue increased by 6.6% as Atea hired additional project consultants in new growth areas such as data analytics.Despite lower revenue, gross profit was up by 6.5% based on higher sales of services and improved margins across all lines of business.Operating expenses were up by 8.2% due to staffing of new consultants. With lower revenue offset by a higher gross margin, EBIT was NOK 118 million in line with last year.We'll now move on to Sweden, where our business continued strong momentum with another solid quarter. Total revenue in Sweden grew by 12.0% to SEK 4.3 billion. Product sales grew by 10.9% from last year, driven by a higher order volume on recently renewed frame agreements to the public sector. Demand from large corporate customers also remained strong.Services revenue grew by 18.3% as the company hired additional consultants to meet growing market demand for professional services.Gross profit was up by 10.8% as margins were affected by new frame agreements and more third-party services in the revenue mix.Operating costs were up by 11.3% based on an increase in the number of employees from last year. With strong sales growth across all lines of business, Sweden's EBIT grew by 8.9% to SEK 156 million.In Denmark, Atea return to profitability in the fourth quarter with a strong recovery in order intake from the public sector. However, demand from the private sector was slower to recover from the court conviction in June and margins remained under pressure.Total revenue fell by 4.4% in the fourth quarter to DKK 1.9 billion. Product revenue was down by just 3.3% from last year as sales to the public sector returned to last year's level.Services revenue fell by 8.4% based on lower demand from corporate customers. Gross profit fell by 18.3% from last year as margins were impacted by an increased proportion of large software deals and low margin in revenue mix.Total operating expenses were flat from last year. As a result, EBIT was DKK 8 million in Q4 2018 compared to DKK 84 million last year.In Finland, Atea reported another quarter of very strong growth in revenue and EBIT. Total revenue in Finland grew by 16.9% to EUR 76 million, driven by higher sales of products. Product sales were up by 19.3% as demand from the public sector continued to grow.Services revenue declined by 1.8% as a very large managed printer agreement with the public sector concluded at the start of 2018.Gross profit was up by 13.2% compared with last year based on higher product volume and margins.Operating expenses were up by 7.6% from last year as Atea increased its workforce in Finland. With strong growth in revenue and higher margins, EBIT in Finland grew by 36.1% to EUR 2.9 million.In the Baltics, Atea had lower revenue, but slightly higher profitability than last year. Total revenue decreased by 8.5% to EUR 41 million.Product revenue was down by 11.4% from last year based on fewer large projects to the private sector and postponed deliveries of PC hardware based on a supply shortage.Services revenue was up by 3.0% based on increased demand for data center outsourcing services. Gross profit decreased by 3.4% as lower revenue was offset by a shift in the sales mix toward higher-margin services.Total operating expenses fell by 4.6% from last year due to a reduction in the number of employees. With lower revenue offset by reduced operating expenses, EBIT was up by 2.1% to EUR 1.6 million.A word on our cash flow. Cash flow from operations was NOK 2.3 billion in Q4 2018, an increase from NOK 1.8 billion last year. Cash flow is positively impacted by a significant reduction in working capital during the quarter. As you can see from this chart, Atea's operating cash flow is highly seasonal with positive cash flow concentrated in Q4 when working capital balances are lowest.Based on the seasonal pattern, Atea's aim throughout the year is to maintain its working capital balance in line or below the same period last year. At the end of Q4, Atea's net working capital balance was negative NOK 1.7 billion in line with last year. Atea finished the quarter with a net debt balance of NOK 17 million compared with a positive net cash balance of NOK 102 million at the end of 2017.I want to say a few words also about performance in the full year 2018, where we had strong revenue and EBIT growth across all markets except for Denmark. In total, if we exclude the Danish operations, which, as you know, we had a court conviction, which significantly impacted the business. Revenue -- outside of Denmark and outside of our start-up investment in AppXite, revenue grew by 11% and EBIT grew by 19.1%. The growth was tremendous across all of the countries.In Norway, revenue grew by 5.6% and EBIT grew by 16%; Sweden, revenue growth of 17.3%, EBIT growth of 19%; Finland, revenue growth of 15.2%, EBIT growth of 33.7%; and the Baltics, revenue growth of 3.5%, but EBIT growth, driven by a great performance in the services division, of 17.5%.In addition, the cost that we took on all of the shared services that we have within Atea went down from NOK 47 million to NOK 41 million. So we grew our business across all lines of business and also our shared services became more efficient.The areas that pulled down performance for the group was Denmark and then as expected, we had start-up costs, start-up investment in a subsidiary called AppXite SIA based in Latvia, which we've spoken about in previous presentations. The loss actually came in a little bit less than what we had forecasted. We were saying at the last quarterly report, NOK 2.5 million, it came in at NOK 2.4 million for the year.So that concludes our summary of the Q4 and full year financial results. Now, for an update on Atea's business strategy, I'll hand the podium back over to Steinar.

[Steinar Sonsteby, Chief Executive Officer]

So thank you, Robert. Just a couple of comments, final comments from me.First of all, we have great expectations for '19. There is nothing that we have said before that have changed in that line. Norway will get back to growth. We went out of Q4 with record backlog in all countries, but more so than in any of the others in Norway.And for Denmark, our expectations for the result in '19 is to beat the '17 numbers. So to what we have called the 2021 plan, and for some of you that have been close to us, you've heard us talk about some of the things that we've been working on over the last 12 months. So we have included hundreds of Atea employees over the year of 2018. All our strategic -- all our 10 strategic vendors have been a part of the process. And of course, what we believe about the market and where the customer will need help and where we can create value also not based -- only based on the market, but also where we stand today or where we come from. These factors have all gone into forming what we now call the 2021 plan or here, 2019 and beyond.Working with a 3-year plan is something we've done. This is the third time. So we've actually just delivered on the 2018 plan. And it gives us both a short and a long perspective on how we build the company, which have become quite a large company over the years. The way we will present our offerings going forward is in the following way. So there are 3 areas where we're going to play -- 3 areas where we're going to play. First of all, information management.Information management is all about collecting, storing or deciding what to store and what to delete in seconds, minutes or years; how to secure it; privacy, but mostly, how to make value out of the data. It is said that in 2018, we collectively on the planet, generated more data than humanity in all times before that. And it's predicted that this will go on for the next 10 years, that every new year will create more data than the previous years collectively. This area, single area will be the fastest-growing area in IT/digitalization in the world for the next 10 years.We have built capabilities in some of the countries in this area over the last 2 years. For instance, in Norway, in September, we bought a company called Sherpa, which we've 50 people working directly in this area. And we've talked previously to you about our capabilities inside IoT, which is a part of collecting the data. We will, of course, speak more about our improvements and success in each of these area and also information management in presentations to come. Secondly is digital workplace. A digital workplace means everything around you, around me, around the employees and all companies and all organizations.Mostly, your workplace today have been digitalized after a pattern which was analog. A digital workplace is a workplace created from the ground up where you have a digital workplace. And it comes from, of course, how your PC is run, your smartphone, how it is connected, how your office is connected to the other offices or the other workers if you don't have an office, how your videoconference or collaboration opportunities are used whenever and wherever you are. It's really everything or all the tools that you're using.And thirdly, hybrid platforms. We have said for years -- I have said for years that we don't think the public cloud is any kind of a destination. We believe that the platform that we're going to utilize and build over the next 10 years is hybrid, meaning there will be some in your basement, some in our basement and some in some of the bigger players' platforms out in the world, but there is an addition to this, which makes it really, really complicated and that is that most companies will have multiple Software-as-a-Service deliveries from other vendors than the ones I just mentioned, like, Oracle, Salesforce.com, SAP and tens and tens of others and these are all different clouds, different platforms and our job will be to build a possibility of running this in a smooth way.When you put the right load, the right place, you get the most efficient hybrid platform. The hybrid platform also includes the network, the next-generation network, which also will be software defined and hybrid.To get people, skilled people in these areas are difficult. It is the biggest task we have for the next 3 years. And because we are a big company with good connections with all our vendors, it's easier for us, but that doesn't mean it will come easy. Inside this -- these deliveries, we have 3 roles, 3 ways to the market. We are and will be the biggest reseller in our region, by far the biggest one. In this area, we'll invest in efficiency. So more e-commerce will -- in May will open our new central warehouse in Växjö, which is a completely new building, the most modern and efficient IT central warehouse in this region.So efficiency is the name of the game, but I just want to stress, we are not pulling out of the reseller market. It's our bread and butter and we're going to stay there. The integrator role is something we've built over the last 5 to 8 years, but we will move into new and more value-added area in this as we have come from more of the technical side of it. This is all about getting competencies, competencies, competencies.And then, lastly, service provider. This is certainly where the hybrid theme comes into play the most. We will be able to deliver everything we deliver on-premise with products we'll also be able to deliver as a service, so meaning, you pay per user per month or per consumption, and of course, this is where AppXite will play a huge and great role. So 3 areas, 3 roles and our sales strategy internally, if you participate in the sales meeting in Atea, you will hear us talk about shared wallet a lot. So we're not talking too much about getting new customers. We're talking about helping them in new areas, where we've already helped them in some and when we will be perfect is when we will be in 3 areas in 3 roles, so 9 boxes to tick for our salespeople in the future.For you to get a better understanding or even better understanding of how this looks for us going into the future, we have asked many customers around in the Nordics to be references because it is not so that we start today to deliver these, and so, take a look at this film.[Presentation]

[Steinar Sonsteby, Chief Executive Officer]

We hope that gave you a better perspective on what we spend our day doing. It's a long journey from just selling hardware. This will be a step-by-step improvement and this will give us the opportunity to reach the profit levels that we have talked about.In 2019, the improvement of EBIT will be much stronger than what we've seen lately as Denmark recovers. But over the 3- to 4-year journey that we're entering, we're expecting growth in revenue in the area of 5% to 10% and in EBIT, in the area of 3x the growth in revenue.This is not a revolution, and I'm talking as much as to my employees as I do to you right now. This is not a revolution. It's an evolution and it's an evolution that started years ago. So that concludes the numbers.I will be back for live questions after some words from our Chairman.

[Ib Kunøe, Chairman of the Board]

Thank you, Steinar. Dear colleagues, dear fellow shareholders and all participants coming here or watching online. First of all, although it's a little late, happy new year and goodbye 2018. As you know, it's a tradition that I at the presentation of Q4 and the full year shows up and give some comments on the events of last year. The company, as I see it, is in excellent shape and over the summer, we ended the court case in Denmark and accepted a fine of DKK 13 million. Because some top managers had been employed when they had made illegal acts against our rules, what we call top management overrule, that's one of the things that, although you have a lot of rules in place, if the top management overrules the place and says okay to things that shouldn't have been done, then it's very, very difficult to detect.But all this is now behind us and our job is to continue to get Denmark back on track and tell our customers that what a few persons did is now more than 5 years ago and we have done everything possible, so it will never happen again. We have worked hard with a self-cleaning process and have as the first company being certified after ISO 37001 and that has, to our help, put totally new standards in these areas.We have moved to a new and improved state, but unfortunately, the Danish results have taken a beating in 2018 and that has had a negative impact on our company result, you have seen that.Our revenue is close to NOK 35 billion. It's up 70% from last year all countries included. And our EBIT is up 18.6%, if we hold Denmark at arms length for a moment. Because Denmark lost NOK 215 million compared to last year and that's a lot of money. But we -- as you can see, we kept most of our customers. We fought a hard battle and that battle will always, if you want to keep your customers in difficult situations, it will cost you on the profit side.But I'm sure that Denmark will come back on track and will comply with our 2021 plan year by year as Steinar told about. The market knows this and, although the share closed very low year-end, like the rest of the market, we saw an all-time high of 132 in September and yesterday, we closed at 124, not bad.So I'm sure that my fellow shareholders are satisfied with their investment. We paid a dividend of NOK 6.5 per share in '18, that's 5% to 6% on an average investment in a company with Atea's stability and a noncyclical share, not bad. The Board will again ask the general assembly to pay the same dividend in 2019, again, in 2 installments, NOK 3.25 as usual.As Steinar said, we have been discussing, should we put it up because we are very confident of 2019, but we don't want to be too cocky because some would then interpret us, well, they are really trying to show off and say, well, everything is fantastic, but you don't earn all the money to pay the dividend out. So we said, okay, let's wait, let's wait. But it will come. The biggest shareholders would be very happy with that, I'll tell you.Atea's [indiscernible] is the center of all IT as you have seen, the development is fast and ever changing. New areas are emerging all the time and the market continues to grow as IT is and becomes a more central element in all business, but also, the complexity and importance grows with it. So from delivering hardware, software and infrastructure to the IT directors, we are now at the core of our customers' competitive challenges. The customers' choice of IT solution and digitalization strategy are business-critical decisions, and we are and have been in the middle of that for many years.So as the biggest player in the Nordic, we are in a unique position to deliver the right solution to our customers because we have the expertise and hopefully, the right people.I have said it before, but it only becomes more important year-after-year that all business is people business, from the youngest consultant to the top manager, whatever you do, whatever business you are in, it's people business. Our strategy is simple. Atea is a place to be both for our 30,000 customers, our shareholders, our strategic suppliers, but first of all, for our managers and employees. The companies, which can attract and attain the right people and develop their skills in a fast-moving business environment will be the winners and that is why this is the most important issue to us, the place to be.So welcome 2019, we are looking forward to another great year, and I will be thanking all 7,000 employees for a job well done. Your efforts are really appreciated and it's not always only the result and the numbers that counts. A dedicated performance is required and sometimes it takes a little time for the good results to materialize. So keep up the good spirit and your dedicated work. All shareholders should be happy with your achievements. You can be proud of yourself and your colleagues. Thank you. Steinar?

[Steinar Sonsteby, Chief Executive Officer]

Thank you, Ib. So we'll take questions, and of course, just a second here. We need to use the mic because this is live. We did have some trouble streaming in the beginning I've been told. So I'm sorry about that to everybody sitting out there. I hope everything is okay now.

[Christoffer Wang Bjørnsen, Analyst]

Christopher from DNB Markets. It's great to get impressive goals for the future, but on revenues and EBIT, can you comment a bit as well on your CapEx outlook? It's quite significantly up for the year and how do you see that progressing further? Is this a new run rate? Do you foresee it increasing any further? That's first question.

[Steinar Sonsteby, Chief Executive Officer]

So the CapEx, we've said many times, we believe in our line of business should not exceed 1% and it does a little bit this year. And the reason for that is the new central warehouse that's being built. So we don't own the building, but there is a lot of automation going into it and IT systems. So as digitalization are taking over, also warehouses, we're happy to say, there are some investments there, but that's a onetime thing. So, no, the level we had now is not the new level.

[Robert Giori, Chief Financial Officer]

CapEx was actually well below 1% of revenue last year?

[Steinar Sonsteby, Chief Executive Officer]

I'm sorry. It was up from last year -- result from last year, okay? So for the people out there, CapEx, my mistake, CapEx was not over 1%, but it was well above '17 level.

[Christoffer Wang Bjørnsen, Analyst]

Second question is on how do you expect the working capital to develop going forward this year, if you adjust for the securitization of NOK 350 million? If I understand it correctly, your working capital was up around 20% year-over-year compared to 2017. What is driving this and what is kind of -- what does that tell us about the trend going forward into next year? And in terms of securitization, what kind of opportunities do you expect on utilizing Sweden and Denmark?

[Steinar Sonsteby, Chief Executive Officer]

Robert?

[Robert Giori, Chief Financial Officer]

What we're going to see with working capital is we're going to see the fluctuations be completely different as we go into 2019 versus what we had in 2018 because we can use the securitization structure, which was launched in December. In December, we launched the securitization structure. Now securitization structure is a way that you delink credit on an asset pool versus the credit quality of the company. And so what we did is we set up a structure, whereby we could borrow on the credits of an asset pool, in this case, it would be accounts receivable and that would be separate from the borrowing that we could do in the rest of the company.When you kind of disaggregate these 2 pools of how you'll be borrowing against, you could find that your credit terms are actually more attractive, separated than they would be when they're funneled together and that's what we found through the securitization structure.We sold NOK 350 million in accounts receivable or we transferred NOK 350 million in accounts receivable in December. That was to offset a couple of things that we saw coming. One of those was the fact that inventory was going to be higher as we were pre-purchasing inventory given the fact that we had a shortage on PC. To ensure that we can make our deliveries in Q1, we pre-purchased inventories. This led to an increase in our DSI and our total inventory balance went up by about NOK 240 million.In addition, we had an unfortunate calendar that we just had to prepare for, whereby the 1st of January was on a Tuesday, and so basically that left us with Monday, the 31st, Sunday, the 30th, and Saturday, the 29th of December were all days that we could not actually do collections. The last collection date was on the 28th of December. Given that, we wanted to offset that by doing a transfer of the receivables. We didn't need to do it. I mean, we had plenty of credit available on other lines, but we did that simply to offset these working capital movements. We're not going to face those situations next year, okay.

[Christoffer Wang Bjørnsen, Analyst]

[indiscernible] also if you could just say a few words on AppXite in terms of how long you expect you have to invest in operating losses and how you expect the ramp to develop? I was hoping a bit for a comment on that.

[Steinar Sonsteby, Chief Executive Officer]

So the question on AppXite. We will get back to it, but the focus for AppXite right now as we see that this business area is growing so fast in Atea is to keep its watch on Atea first. And so, we've taken down a little bit the external focus. It's not something that will stay away forever, but right now, we need some integrations in Atea and that is ramping up very well. We're launching in each country and will be done by that in Q1. So it looks promising. We have our vendors with us on the journey. So we will certainly come back to you on that, but right now it's a little bit more of an internal focus.

[Unknown Analyst]

[ Eric ] from SEB. Once again, Sweden, fantastic, double-digit top line growth. It's been really good all through the year. I was just wondering your thoughts there into 2019, how Sweden looks?

[Steinar Sonsteby, Chief Executive Officer]

For Sweden? Well, if Mr. Hultenheim, which is my country manager in Sweden are seeing this, I expect it to improve, but really, Sweden hasn't just delivered in '18. Sweden has delivered over the last 5 years, and there is very well known things behind that. The change in organization we did in Denmark about a year ago, which is starting to function pretty well by the way, is based on the model that we developed in Norway and Sweden. I am certainly agreeing to the people who say that the revenue in Norway in Q4 was a little bit soft and we -- I can say that we had 32% growth in January. So there is certainly spillover from December to January, which is unfortunate, but sometimes you can't steer your customers to when they want deliveries. But Sweden will keep on. We are winning contracts and there is no reason that it shouldn't keep on. Comparables will always be tougher. They say that the hardest thing is not to win the world champion the first time, but the second time.

[Hans Rettedal Christiansen, Junior Analyst]

Hans Christiansen, Carnegie. Could you maybe just explain a little bit in Norway what exactly happened? You are using the word less-concentrated purchase orders, what does that mean?

[Steinar Sonsteby, Chief Executive Officer]

It means that we had 2 large orders, NOK 100 million plus that were supposed to be delivered, they were -- the goods were purchased, they were supposed to be delivered in late December, that was pushed into the first week of January by the customer. And we had a little less orders from some big central governmental customers, which I can't comment on exactly who they are, which we see has come back in January. So when we say less concentrated, it's because in public customer or the public segment, most customer wants everything done before the year-end. Now it seems that they weren't as -- that wasn't as important to them. So less concentrated, but really what it means that some of the December slipped over to January. So it's not -- the situation in Norway has nothing to do with a slowdown, it has something to do with the period. That's what we're trying to say.

[Hans Rettedal Christiansen, Junior Analyst]

And then on your gross margins in Norway, they're sort of accelerating. Is it just your revenue mix that's driving it because you're -- and it's also related to the fact that you are citing many places higher demand from infrastructure services and you continue to hire more and more consultants, how do you sort of address this?

[Steinar Sonsteby, Chief Executive Officer]

Well, I've said many -- I mean, we've had this discussion many times. People have told me for 15 years that margins on products will go down. I've told them, no. It's the mix of products that makes the product, the total product margin, it's the mix that changes it. And so, we haven't seen for long, long time that margin on individual products have gone down. It's the mix that changes and we can't steer that mix. If a customer wants software in the last week of December, we're going to sell them software. If they want something else, we're going to sell them that. We're part of their journey. And so we can't steer in a certain period of time of 12 weeks exactly what 1 customer is going to buy or the market is going to buy. So it's all about mix. When it comes to the total gross profit, meaning software, hardware and services, it's even more so when it comes to mixing services in into the equation. Now what we see over time is that we've moved from 90% hardware and nothing or almost nothing in software and 7%, 8% in services to where we are now at 55% hardware and about 20% and 25%, so 25% on software and 20% on services. That journey will slightly happen also for the next 10 years. So services and software going up. More and more things are solved in software and it's solved by consultants who install and implement that software.

[Hans Rettedal Christiansen, Junior Analyst]

I guess, my question was, do you expect to continue to use more and more consultants to address the demand? And also, do you expect a similar uptick in the gross margin going forward in Norway?

[Steinar Sonsteby, Chief Executive Officer]

I was trying to answer that. If I weren't precise enough, yes, we expect the same development.

[Unknown Analyst]

Still a quarter -- 15 minutes left last here. I was just wondering you mentioned that one of the reasons behind not increasing the dividend this year is that you see a lot of opportunities for inorganic growth. So just wondering first, what kind of war chest do you envision that you have available? And secondly, if you could, again, just elaborate on what kind of opportunities you are seeing? Is it to expand your consulting business? Is it internationally beyond AppXite to go out in Europe, et cetera?

[Steinar Sonsteby, Chief Executive Officer]

Well, first of all, we have more than enough to do what we want. We exited 2018 without any debt. And as Robert said, we have pretty high potential both in the securitization and in pure borrowing. So that is not our worries, but it's how we manage cash, and so, when it comes to opportunities, I don't think I said organic growth. I think, at least I meant to say we have plenty of investment opportunities and they are certainly within the information management and this is nothing new, this is what I've said over the last year. In the information management, there are quite a lot of small consulting companies, which will not succeed over time to take the bigger projects and in Norway, we actually got rounded up 2 of them, 1 where the employees just started with us and 1 that we acquired last year and we're seeing some opportunities in that area. But certainly, we're also, and I've said this before, we certainly feel that we're about ready to go outside our geography. So we will be here for the people in the audience. By the way, a full room today. So thank you for the interest. And we'll be here and take your questions individually.So thank you, and we'll see you after Q1.