Hexagon Composites ASA

OSE:HEX

Earnings Call Transcript 2018-Q2

[David Bandele, Chief Financial Officer]

Welcome, everybody, to Hexagon Composites Quarter 2 2018 Presentation. It's my pleasure to take you through the group highlights. We're going to introduce a section called Business Updates, and we'll touch on a couple of hot topics for the quarter 2 period. There will be a shortened Group Financials section after that, and then Jon Erik will come and join us for the outlook and Q&A. And we include in this presentation our Appendix on some more segment financials, but we won't go through those here today.So first of all, highlights from the second quarter: strong profitability, overall, for the group; solid Mobile Pipelines volumes in the quarter; also pleasing that we have more customers on board, that's a great indication; and continued strong LPG results. We like to set records in that segment. This quarter, it was a new production record, and that's testament to some of the great investments they've been making there in the last 12 months.Continued very high activity levels then within Hydrogen and Light-Duty Vehicles. Within Hydrogen, we're involved in quite a number of projects, numerous projects there. And within CNG Light-Duty Vehicles, we're definitely preparing for an increase in demand, particularly in the European markets.Agility Fuel Solutions profitability continues its upward trend. And Agility, of course, our 50% investment in the Heavy-Duty, Medium-Duty sector.So quick business update. In June, we were very pleased to announce a substantial contract for a fuel cell electric vehicle, a new model. Unfortunately, we still cannot mention the OEM by name. So the figure to the right is purely an illustration. Nonetheless, the combined value of the serial production order is in the area of NOK 1 billion to NOK 1.2 billion, and this very much validates the value proposition that we've been seeing in Hydrogen, so very pleasing. The ongoing development will continue through the 2020 time frame, and the serial order production will kick off after that.Uniquely, we can leverage our global footprint, which includes sites in Nebraska and Ohio, also in Kassel in Germany. And we can also actually rely on resources also in the high-pressure section in Raufoss, Norway. But as a key also to landing this contract is our involvement, you can say our strategic alliance with Mitsui. So they certainly have been key in enabling us in this Hydrogen area and also they're a key differentiator versus our competition.Going to move over to the Heavy-Duty sector. Of course, this is the market space for Agility Fuel Solutions. So one of the key things within especially the U.S. market is the natural gas vehicle adoption. When we look at refuse or waste collection vehicles, the adoption rate of new natural gas vehicles is over 60%. When we look at transit buses, it's 30% to 40%. But when we're looking at the over-the-road haulage, the Class 8 trucks, it's still around 2%. So those obstacles, removing those obstacles to adoption, is a key area, and we're happy to see a lot more happening in the financial solutions world also.Take our oil major, Total. They made an investment in May into Clean Energy Fuels, which is the major downstream retailer of nat gas in the U.S., for 25% of that company, and also, critically, including $100 million financing facility. And we'll get back to that. So we see that as strong validation of the natural gas as a transportation fuel in the U.S. And obviously, we feel we'll see a lot more of that as the oil majors expand their strategy also into low-carbon business.So back to the $100 million. So as Clean Energy announced, basically, it's there to match or give price parity for a customer when he's considering buying a diesel truck or a natural gas truck. Today, the natural gas truck comes at a premium. And then the business model is you save fuel and you pay back against that premium. So obviously, if the payback rates are attractive, adoption increases.So what this aims to do is to, basically, provide financing to remove that barrier from the start, and so customers can save on their fuel costs, basically, from day 1. And we estimate that the funding capability then is equivalent to around about 2,000 trucks, which is a significant demand increase for Agility Fuel Solutions. This will be, obviously, over some time. But what's good for Agility is definitely good for Hexagon as well.Why is that? The value of Agility is still somewhat hidden in our numbers. In the balance sheet, it's there, 40% of the balance sheet is Agility Fuel Solutions. But of course, it's not consolidated in our revenue down to the operating profit.What we wanted to just be very clear to the graph on the right is that Agility Fuel Solutions, in totality, is more or less the same size of business as all of Hexagon. So a very important investment, and you can do the math.Going over to the financials. We posted revenues of NOK 366.8 million to the left-hand side there, a slight decrease over the same quarter last year, principally due to lower commercial sales on Hydrogen. More or less, our activities have been, especially in this quarter, development activities. So it's been a reduced top line there. However, on the other side, Mobile Pipelines has been continuing its upward trend. So very much strong annual year-over-year growth for Mobile Pipelines continues in quarter 2.In the middle of the page, we see our EBITDA. We recorded NOK 73.6 million or a 20% EBITDA margin. And that NOK 73.6 million includes a couple of impacts. One was a reversal of a long-term provision, that was a plus NOK 40 million impact. However, the dilutive impacts of Hydrogen as we ramp up that organization, including the lower commercial sales, gave a negative NOK 20 million. So in net, underlying impact is plus NOK 20 million of the NOK 26 million increase you can see year-over-year.On the right-hand side, our net profit was also very good spread, posting NOK 62.6 million, up NOK 48 million from the same quarter last year. Of course, the positive EBITDA trickles down. But in addition, below the line, we have very positive currency movements year-over-year, plus NOK 36 million.I think it's very important as we go through this investment modus in Hydrogen, we have our established businesses on a slightly different track. Hydrogen, as I say, is in its early growth phase. So what we're looking at here is stripping out the Hydrogen business. You can see in the middle, with revenues of NOK 14 million and minus NOK 20 million. And having a look at the rest of Hexagon, also stripping out that plus NOK 40 million impact. And what we see there is revenues of NOK 352 million; of EBITDA, NOK 53.8 million; and a 15% EBITDA margin. So the rest of Hexagon, very healthy. And of course, Hydrogen business is where we are ramping up for the future.I've discussed quarter 2. So to the right-hand side, we see the first half year, I'll just touch on a couple of items there. It's been a strong first half year, you can see revenues up NOK 64.8 million to NOK 783 million. EBITDA, NOK 140.1 million versus NOK 82.9 million same period last year. And that takes us down to a profit after tax of NOK 85.7 million versus NOK 22.3 million the same period last year. So a very strong first half for Hexagon Composites.On the revenues, you can see LPG, very strong in the quarter. NOK 192 million on the left, that was quarter 2 '17. That actually remains our record, so we are very close to that record level this year as well.And then you can see to the right the impacts of the, the light blue areas, the Hydrogen and Light-Duty vehicles. It's Hydrogen that's been lower year-over-year. And Mobile Pipelines has increased year-over-year, as mentioned earlier.So let's go to Agility Fuel Solutions, so their actual business operating results in U.S. dollars. To right-hand side, the dark blue bar, they posted $39 million in revenue and an adjusted EBITDA of $3.3 million for a 9% margin. The adjusted EBITDA is mainly adjusting for stock -- noncash stock compensation impacts.Pleasing to see that the increase in revenues and margin are happening all the way through the first half of the year, and Jon Erik will comment about the back half of 2018 in the Outlook section.Within these numbers, still slow Heavy-Duty truck volumes. However, very pleasing that the new Cummins 12-liter near-zero engine is now on the market. So we've had some sales already and some pickup in quarter 2. And then we will expect that trend to continue later.Still solid refuse truck sales year-over-year, upward trend. And on the balance sheet and funding, very much fully funded. In fact, they closed -- Agility closed on a net debt position of just $1 million.Going over to Hexagon's balance sheet. Much of the change really resulting in a higher net interest-bearing debt. We closed last quarter quite high cash levels following positive working capital movements, amongst other things. And obviously, in the quarter, we've paid our dividends, we also executed -- completed a share buyback program. And those 2 effects have increased as the main reason for increasing our net interest-bearing debt to more steady levels of NOK 271 million. The equity ratio remains at 62% and still a lot of capacity on our balance sheet for more.On that note, I'll invite Jon Erik over to take the outlook.

[Jon Erik Engeset, Group President & CEO]

Thank you, David. Good morning, everybody. So we still feel quite privileged to be working in the sector that we are working in. The macro conditions continue to be very favorable. We have now attractive diesel versus natural gas prices, driving demand, both in North America and in Europe.The governmental regulations applicable to our sectors are getting tighter, and that is important and positive. And also, related to that, continuation and reinforcement of incentive programs in Europe, the U.S. and, also now, to an increasing extent, in East Asia.I think it is now widely acknowledged on political level and industry that Hydrogen, biogas and natural gas are vital for the low-carbon energy mix going forward.Hydrogen, we announced early this year that we joined the Hydrogen Council, a lot of prominent members there. Every month, there is one representative of the member companies having a 60 minutes update on their views and visions. This is the representative of Daimler. There is still a lot of speculation and discussion in the press and elsewhere. Is it battery electric? Is it fuel cell electric? And the answer is yes, both, there will be mix, different weighting in different markets, different applications. But I think, there is a growing consensus that fuel cell and Hydrogen will be part of that electrification process.The heavier the vehicles, the more relevant, you may say, becomes a fuel cell. And we see a lot of attention and interest for vessels and trucks. So Toyota unveils its second iteration of their Hydrogen truck. Nikola has reported USD 11 billion pre-order book for their alternative. And the firm order from Anheuser-Busch in the U.S., the famous beer maker. And here, closer to home, ASKO is putting their first fuel cell truck on the roads later this year.And why is that? It is because, operationally, fuel cell is the most efficient solution when you take into account the fueling time, the range, and that is a function of weight. Another sector, which we find very interesting, is the maritime segment. We announced early this year our first customer for fast ferry application. It was on the West Coast of the States. And we have several other similar projects under discussion: work boats, fast ferries and car ferries.Important to notice is that many of these programs, they will come into production and delivery from the early 2020s. This is not a near-term, large-volume business. But we have now a significant confidence -- sufficient confidence to state that we will see that strong growth coming a couple of years down the road from now.Short term, we will see fluctuations in our Hydrogen segment. Last year, we had a very good year in distribution, so if you like Mobile Pipelines for Hydrogen. This year, that market has been slower. We see it will pick up again in Q4. We expect a strong first half of 2019. But when you refer to David's numbers, that is where we see the temporary downturn compared to 2017.Back to the maritime sector, there is a very strong regulatory push. I'm sure you've all heard of the IMO regulations to be enforced from 2050. But already now, a lot of the operators are starting to prepare for that. And back to Norway again, the Norwegian Parliament recently introduced a legislation that will limit or prohibit usage of diesel- and oil-driven ships in the Fjords, latest by 2026. That is a short time, so a lot of development has to happen by then. It is very hard for us to see that battery electric can be the solution, it may be a part of it. But in order to achieve that, we are of the opinion that fuel cell technology is absolutely necessary.Moving on to CNG light-duty. So that is -- that continues to grow strongly. We have talked repeatedly about Germany, but we now see that movement, if you like, spreading to Belgium.We have a strong market in Italy. Governmental incentives are either prolonged or strengthened. And we also have discussions around banning diesel vehicles in a number of cities around Europe.The Italians are planning to expand their CNG filling station network significantly, and we've previously discussed the similar plans for Germany. And Volkswagen is launching mono fuel models for -- at the end of this year, so that they have a wide range of models available for the customers.Part of what is driving this, this is a consequence, if you like, of the diesel gates. Another consequence of that is very strict rules, so there is something called the Worldwide Harmonized Light-Duty Vehicle Test Protocol (sic) [Worldwide harmonized Light vehicles Test Procedure], and that has been reported in the press that it's causing supply chain challenges for many OEMs. And also, Volkswagen informed recently that their deliveries will be affected.And we see an impact on our business as well. We saw it now in Q2. We will see strong effect in Q3. Without being able to go into details, it has to do with the logistics and the operations of our customers. So we will see a temporary disruption to that extreme strong growth curve on the right-hand side, but we are very confident that we will get back on the growth trajectory from late Q3, early Q4.So our concerns at this stage is more on how we prepare for the strong growth and how we utilize our capacities in order to be able to satisfy demand. And it's quite interesting also the left-hand curve recently announced -- so you see the reduction in petrol and especially in diesel car sales. This is again Germany, while the CNG alternative has what I think is fair to call an extreme growth. So unfortunately, we will have a hiccup in Q3, but then the underlying growth is very, very strong in this segment.Mobile Pipelines. So this is the TITAN 53, recently launched, approved by the U.S. Department of Transportation, the largest tanks on the planet. So this is a product especially designed for states in the U.S. where there are limitations on weight, 80,000 pounds weight restrictions, and as such, makes our portfolio more complete.So we were able to announce yesterday a large order with one of our main customers, XNG, who are expanding their TITAN fleet. We frankly had expected this order a bit earlier, so we will see that volume in Q4 and in Q1 2019. Total value, USD 10 million. Strong activity in the North American market, driven by the high oil price, David referred to the oil majors. We may not be quite back where we left that shale gas market in late 2014, 2015, but we are quickly moving in that direction in North America. A lot of projects ongoing, driven by the attractive spread between natural gas and oil.Also, we are enjoying success with our Modal Acoustic Emissions technology, MAE, for recertification. It is an interesting business in its own right, and it's also a very good value proposition for our customer. They have more predictability in how they can recertify their products every 5 years, which is a regulatory requirement, in an efficient nondisruptive way.We expect strong year-over-year growth, but also here, we see temporary softness in Q3. So compared to what we guided in the last quarter, we see projects moving from Q3 to Q4 because of delays in getting the final agreements with the customers.LPG. So we expect to reach similar capacity utilization as last year, which is near full utilization. Continued very stable European market. We see now Bangladesh emerging as one of the fastest-growing LPG markets in the world. That is a political decision to move away from natural gas to LPG for domestic use in order to free up the natural gas for industrial applications. We also are continuing our renewed drive to penetrate the U.S. markets. We have enjoyed some success in Florida, still coming from lower numbers relative to the extensive potential in that market. But we are encouraged and we are now entering California and Nebraska in a similar way.Agility. So we see now that the over-the-road, Heavy-Duty truck market, which has been low for several quarters, will rebound now in the second half of 2018, partly because of the favorable spread between natural gas and diesel, but also due to the availability now in the marketplace of the Cummins Westport's near-zero emissions natural gas engine. And when we talk about 0 emissions in the U.S., it's NOx particulates, they're not so concerned about the CO2 part of the emissions.There is pent-up demand for new engines, and therefore, we expect a strong quarter. However, we also see that the U.S. overall truck market is at an all-time high, and we have some concern that there may be constraints on deliveries of chassis, which then represents a risk that some of the projects may be pushed into 2019.Both the North American and the European transit bus segment is strong this year. In Europe, we think it's driven by the same rationale as on the light-duty side. So also on the bus side, we see that after a few years with high focus on electric buses, decision-makers are again looking at natural gas and biogas as part of the mix in order to meet their emissions targets.And the last but not least, refuse truck market is enjoying a very good year.So this is the familiar curve. In April '17, the spread between natural gas and diesel was at a mere $0.40 per diesel gallon equivalent. In August -- mid-August now, it was at $1.15 the spread at the pump. And then we know that the large customers, they enjoy significantly better prices than what you can get at the pump. So there, you have now in August almost $1.60, and that makes the value proposition of converting to natural gas for large users very, very significant.So summing up. We see strong underlying market development in all segments. We see a weak Q3 due to this WLTP effect on the Light-Duty side and orders shifting on the mobile side from Q3 to Q4, but we then see a strong Q4, altogether.We see a continued dilutive -- significant dilutive EBITDA effect from the Hydrogen business. So we are now in that phase where we spend a lot of resources preparing for the programs, while income remains modest until things start. We will see strong growth in 2019, but in particular, from 2020.That marks the end of my presentation. If you will join me, David. We are happy to take questions.

[Hans-Erik Jacobsen]

Hans-Erik Jacobsen, Nordea. The demand for fuel tanks for CNG for passenger cars are, as you show on your graph, very strong. Could you give us some guidance on how the growth is for composite tanks compared to steel tanks?

[Jon Erik Engeset, Group President & CEO]

Yes. So you're quite right, there are 2 effects driving our market. It is the overall growth, which is particularly strong in Germany, but we see growth picking up strongly also in Italy. You know that Spanish have strong ambitions to make CNG a significant part of their vehicle park. And in addition, we see several OEMs moving away, replacing type 1 steel cylinders with type 4, lighter, more sustainable alternatives, for several of their models. So that is also an effect. We have not seen that yet, but I mentioned the Volkswagen mono fuel program. And in that process, several models are changed from type 1 to type 4.

[Hans-Erik Jacobsen]

Also, on the Hydrogen, you have previously guided on future investments, at least up to 2020. Given all the opportunities that continue to arise, do you still think that guidance holds? Or will investments be bigger before you can start to reap the benefits after 2020?

[Jon Erik Engeset, Group President & CEO]

No, I think -- maybe you would want to supplement there, David. But I think, for the next 3 years, the guidance is sufficient. So we don't see any significant risk of large additional investment requirements. But hopefully, we will take more major orders that will allow us to kick off additional programs and then could justify more capacity.

[David Bandele, Chief Financial Officer]

Correct, I don't think there's more to add to that.

[Unknown Analyst]

[indiscernible] from SEB. Continuing on the CNG LDV side. Is that due to the WLTP effect you saw some negative effects in Q2 and expecting some stronger effects in Q3? Is it possible to quantify the effect in Q2 and what you're expecting in Q3 as well before it comes back in Q4?

[Jon Erik Engeset, Group President & CEO]

I would not like to speculate too much on that because we don't have clear -- I don't think even the OEMs have full visibility, and we get new messages almost day by day. So I have to admit, it's a bit unclear to us. But I think it's fair to assume that we will see a negative impact in Q3, a lower volume than what we've seen in the preceding quarters. But we have absolutely no concern about the further pickup and strong growth in that segment.

[Unknown Analyst]

And on the Hydrogen side, we saw the first OEM moving from test to serial production with quite a large order. Is it fair to expect that the second OEM contract will also move to serial production? And can you say something about timing in such an order as well?

[Jon Erik Engeset, Group President & CEO]

I'm afraid we will not communicate around that until we really have the final confirmations. But we are optimistic, we are very optimistic.

[Unknown Analyst]

Can you say something about the milestones that needs to be met? Or...

[Jon Erik Engeset, Group President & CEO]

On those additional potential, I'm afraid that's to go too much into detail at this stage. So it's -- we would like to be as transparent as possible, but I think it's market practice among the large OEMs to be extremely restrictive on whatever type of information, detailed information, we can share. So that's why we have to be so limited on sharing those details.

[Unknown Attendee]

My name is [ Lou ]. I just have a follow-up to that one, maybe a more broader question that is easier to answer than the more specific one. You're seeing the European integrateds or majors moving into the cleaner markets in different ways, with Eni into filling stations, and Total with investments in the U.S. on Clean Energy. How would you see their American peers' attitude and interest in such a move? Are they closing up or just still negligent?

[Jon Erik Engeset, Group President & CEO]

No, certainly not negligent. When you said peers, I assume you mean Hexagon's peers.

[Unknown Attendee]

Chevron. Yes.

[David Bandele, Chief Financial Officer]

Exxon or the other major peers in the U.S.

[Jon Erik Engeset, Group President & CEO]

Okay, yes. Okay, do you like to comment on that? Yes. So we are not closing off on those players to really predict what will happen in the short term, but what we noticed is that all the majors are in the space. A lot of them are invested in the shale field, more and more looking at the downstream integration. And we see that, for example, what we call virtual interconnect, so moving gas from one pipeline system to another to take advantage of the price spread is also an area which is attracting the majors in the field. So our impression is that there is -- this is very high on their strategic agenda. But that said, we are not that close to those players, so we take most of our information from the media.

[David Bandele, Chief Financial Officer]

I could supplement one bit. We were at the World Gas Conference in D.C. in June. There was obviously a heavy presence there, particularly Chevron and Exxon. I must admit, still very LNG-focused, but we showed the TITAN 53, and that was clearly something that got a lot of interest there. So hopefully, we will see a little bit more. But you're correct, it seems to be more the Europeans even operating in America who are a little bit more on the alternative fuels, like Shell, and Hydrogen.

[Jon Erik Engeset, Group President & CEO]

Exxon, BP.

[Mikkel Nyholt]

Mikkel Nyholt, Carnegie. I was just wondering regarding the NOK 20 million cost in the Hydrogen division. It wasn't really clear to me whether that was a one-off in this quarter alone or whether we should assume this sort of run rate going forward and how long will this ramp-up run for?

[David Bandele, Chief Financial Officer]

I think I'll just refer to prior guidance on an annual level because, as Jon Erik mentioned, it's going to be very lumpy going forward. Annually, we mentioned the figure around about minus [ 39 ] EBITDA dilution in '18, similar levels in '19 and potentially similar levels in '20. Saying that, it really depends on those milestones on the cost side and it really depends on -- also on the revenue side. But I think that's a good basis. We should have the expectation that this is a dilutive division for some time. But of course, the upside in 2021 and '22, also cemented by some of that big -- large contract order you saw kicking in.

[Unknown Executive]

Are there any more questions from the audience in this room? If not, we will look at the questions from the webcast audience.So we have received some questions from the webcast audience. [indiscernible] has several questions. I'll start with the first. Could you please explain what the provision reversal relates to?

[David Bandele, Chief Financial Officer]

Yes, sure. So it goes back to our acquisition of xperion in October 2016, in that booking, and you can also refer to detailed notes in our annual accounts. It also included a very high-side case, high-side aggressive case or earnout provision as we call it, whereby if we achieve this high-side case to be beneficial both to Hexagon and also a payment to the sellers of xperion. This period runs out at the end of 2018, so it's getting more certain. And part of -- we can't really go into details, it's a confidential agreement, but part of that is related to a new emerging market that was new, both for Hexagon at the time and for the seller at the time. Unfortunately, political climate has changed somewhat in 2018 on that specific geography, which makes it less reasonable that, that will happen. And so that prompts a reversal of the provision. But again, the provision is time-allocated to the end of 2018, whereas obviously, the xperion business per se will hopefully go until infinity. So it's really a reversal of an earnout provision in the xperion acquisition.

[Unknown Executive]

Thank you. Next question. Could you please explain the types of ramp-up costs in Hydrogen and how you expect that to develop going forward?

[Jon Erik Engeset, Group President & CEO]

So I think we're talking 2 types of costs, one being investment CapEx-related. So we will ramp up, in all likelihood, our facility in Heath, back to the xperion acquisition. When we acquired xperion, we also acquired a newly established site in the U.S., in Ohio. We -- that was -- the business there was moved to Agility, and we temporarily wound up the activity there. But the site is excellently suited for our needs on the Hydrogen side, so the plan is to equip that site, and that is the main part of the investment program that we discussed in the 2 previous quarterly presentations. Then we have the more operating cost-related items, which are related to the development projects and programs. So 2 things. First, those programs, they are costly in their own right, while the income side depends on certain milestones. So there is not a good correlation between the cost and the income generation. Secondly, we are building up the know-how, engineering capability and capacity in general, mainly to support further opportunities on the Hydrogen side, but also related to other areas. So we have been a bit thin on resources in order to take on this type of major programs. So demanding customers, we have to make sure that we meet their expectations, and we then choose now to build up that organizational capability and get ready for what we see coming. And we think this is very specialized know-how. Very few engineers available with the know-how, so we have to take them in, we have to train them. We assume 18 to 24 months from they start until they can really be put to full utilization. So that is the type of costs that we are incurring these days and will continue to carry in the next couple of years, but will then be paid back when the serial programs kick in.

[Unknown Executive]

Thank you. Next question. Revenues in Hydrogen Light-Duty vehicles were down significantly compared to last year. Could you please explain why and how you expect revenues here to develop over the next quarters?

[Jon Erik Engeset, Group President & CEO]

So I think I touched on that. It's not in the Hydrogen Light-Duty sector that the revenues go down on the Hydrogen side. As discussed, we have had on the CNG Light-Duty side because of these new regulations, testing regulations, we have that temporary supply chain challenge in the car manufacturing industry. So on the CNG and Hydrogen in total, you see some of that effect. On the Hydrogen side, more specifically, it's on the distribution side, so Mobile Pipelines for Hydrogen where we have had a couple of slow quarters. But that market, in its nature, is project-based and we don't see anything concerning in having that fluctuation. So we expect we see orders coming in Q4, and we see a healthy market going into 2019 on the Hydrogen distribution side.

[Unknown Executive]

Thank you. And then we have a couple of questions from [ Anders Bokka ]. Have you increased capacity at Ragasco since last year? If not, your guidance of similar utilization in second half 2018 as in second half 2017 implies flat revenues. How will margins develop?

[Jon Erik Engeset, Group President & CEO]

So we are in the process of completing an investment program at Ragasco. The program is primarily aimed at improving customer values. We will be more detailed around that when we're ready to launch those product improvements to the market. That program will also add some capacity, 200,000 to 300,000 cylinders per year, depending on the mix in any given year. But that will only be available from Q1 2019. So the capacity in 2018 is the same as we had in 2017, and we are close to full capacity utilization. The margin picture so far is very, very similar. So of course, there's always some dependency on the mix and the length of the series, et cetera. But as you will see from the numbers, a very, very healthy performance of the LPG business.

[Unknown Executive]

Thank you, Jon Erik. That was all from the webcast audience.

[Jon Erik Engeset, Group President & CEO]

Any more questions from this room before we end the meeting? Then I thank you very much for sharing this morning with you -- with us, and have a pleasant rest of day.