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Earnings Call Transcript 2021-Q2

[Hakon Rypern Volldal, CEO & President]

Good morning, everyone, and welcome to Q-Free's Second Quarter and First Half 2021 Presentation. Today, we have some strong results to show you, and it pleases me to see that we can take the summer break with a strong second quarter behind us. I always keep the introduction slides. For those of you who are not familiar with Q-Free, you have opportunity to review those slides on your own. But let's jump straight to the highlights. And I think there are quite some highlights this quarter. Revenues ended at NOK 253 million, up from NOK 223 million last year. So that's a growth rate of 13.4% adjusted for currencies. And none -- or discontinued business, the Parking activities, we divested in Q1, the growth was actually 29%. EBITDA improved from a fairly strong quarter last year. We ended at NOK 35 million compared to NOK 26 million last year and EBIT doubled to NOK 20 million. Order intake was NOK 150 million, slightly down in the quarter. That was due to a very strong first quarter. So if you look at the accumulated order intake, over the first 6 months, we are up 50% year-over-year. And as I will show you, the pipeline for the second half looks strong. Order backlog, NOK 1.2 billion compared to slightly more than NOK 1 billion last year. And also cash flow from operations, NOK 29 million, up from NOK 24 million last year. So all in all, strong financial results. If we look at some of the operational highlights, even though we didn't book any significant new contracts in the quarter, we are delivering on all the contracts that we signed in the previous quarters. We are back on the road side in Norway, and we are busy installing new tolling equipment in Norway. We are also busy installing tolling equipment in Portugal and Spain. Big rollout going on in Portugal. We sold the first traffic controllers in Indiana, a new market for us. We also delivered a fairly large software delivery to Snohomish for adaptive traffic signal controlling. And we are continuously rolling out weigh-in motion stations in Ukraine. Also during the quarter, we passed the 1 million tag delivered to Russia milestone, which is quite impressive. If you go into the financial update and look at the numbers in more detail. As I said, revenue is up 13.4%. Organic growth was 29%. Gross margin, fairly stable, slightly down compared to last year due to limited software deliveries in Traffic Management. But if you look at year-to-date, it's still up. So it's fairly stable. It has to do with product mix. In some quarters, it will increase slightly. And in other quarters, it will slightly go down. But it -- overall, I would say the gross margin is quite stable and at an attractive level. OpEx, slightly up due to the fact that in the second quarter last year, we had a 10% salary reduction among our employees. Salaries were normalized in the fourth quarter. Hence, we don't have that saving this quarter. But number of employees is down from 380 something last year to 360. So I think, overall, we're more productive this year than we were last year. And that also proves itself in the EBITDA and the EBIT figures. And also happy to announce a positive earnings per share of NOK 0.13 compared to a loss last year. The year-to-date figures are strong. Revenues up 5% reported figures. But if we adjust for Parking that was divested in the first quarter and also apply the same currency exchange rates, revenues were up 16% in the first half. Gross margin up. OpEx down. And of course, then you get the operational leverage on EBITDA and EBIT. So from NOK 18 million to NOK 48 million in the first 6 months. And also EBIT reversed a loss of NOK 14 million to a profit of NOK 19 million and hence, also a positive EPS for the first 6 months of the year. So we're quite pleased with the first 6 months, I have to say. Revenues, fairly equal distribution as in previous quarters. So we have 2/3 from Tolling and 1/3 from Traffic Management. Both segments experienced growth in this quarter, Tolling up 19%, Traffic Management up 13%, and as I said, 29% organic growth year-over-year. In the first half due to the strong performance in the second quarter, Tolling is up year-on-year for the first 6 months. Traffic Management has rebounded nicely. And of course, we divested assets held for sale, so we end up with a 5% increase. But 16% adjusted for assets held for sale and currency. EBITDA, nice to see a 32% jump. Also, we then bounced back from 7% EBITDA margin in the first quarter to a 14% margin this quarter. EBITDA performance driven by Tolling, but also Traffic Management contributed positively. And as we don't have to take any losses in the assets held for sale segment, we end up with a strong result. For the first 6 months, not the margin change in EBITDA, both for Tolling and Traffic Management, up close to 6% in Tolling -- percentage points in Tolling and 5% -- 5 percentage points in Traffic Management. And overall, the EBITDA margin for the first 6 months is up by 6.5 percentage points. Order intake, NOK 151 million, which is quite strong considering the fact that we didn't sign any big contracts in the quarter. The NOK 151 million is comprised of several small- and medium-sized contracts -- actually, small contracts, not medium sized. Still NOK 151 million. So there's a lot happening even though we don't disclose contracts. But you have to view the NOK 151 million in light of the first quarter, which was exceptional, NOK 434 million. We -- there were a couple of contracts that could have been signed in the quarter that would have made the number even stronger in the second quarter, and we hope that will happen in the third quarter. So we had some nice contracts that we are working on, and we hope to bring them and be able to announce them in the coming months. But there's nothing wrong with the order pipeline or opportunity pipeline, on the contrary. Order intake reflects actually revenue distribution also, 2/3 in Tolling and 1/3 in Traffic Management. NOK is up 17% year-on-year. It's actually up a bit more because we have to adjust the backlog based on spot rates. And the currency spot rates were higher versus the NOK in 2020 than in 2021. But nominally, up 17% without any frame contracts included. Expected delivery schedule, NOK 174 million for the third quarter and NOK 153 million in the fourth quarter and NOK 900 million for 2022 and beyond. So looks okay for the coming quarters. We expect product deliveries and some upsides on existing contracts, of course, to add to what we had in the backlog. But it's -- as we are now 6 months into the year, to have more than NOK 300 million booked for the second half is good. Cash flow, NOK 29 million from operations compared to NOK 24 million last year, only NOK 5 million spent on investments compared to NOK 38 million last year. That was, of course, driven by acquisition of remaining shares in Intelight. Cash flow from financing, minus NOK 16 million because we paid down, so we repaid -- we reduced some borrowings. We repaid borrowings. Whereas last year, we raised money through additional loan facilities. Overall, available credit and cash at hand increased from NOK 144 million to NOK 162 million, driven by a high EBITDA. So that's good to see that we have strong cash position, and we are able to fund our activities going forward. The balance sheet, not that much to comment on, except the fact that the equity ratio is now at 44%, so a slight increase over last year, and the working capital ratio is significantly down. It's at 14% compared to 22% last year. Other than that, not much to comment on. The important thing in respect to the balance sheet is that we have a net interest-bearing debt of NOK 163 million, down from NOK 181 million, and it's down by 33% year-over-year. We have a leverage ratio of 1.6%, which is quite low, and we also have reduced interest expenses. So if you look at the net financial items, it was minus NOK 4 million in the quarter compared to minus NOK 9 million in 2020. And that, of course, helps EPS. What's important when it comes to debt and also the balance sheet is that we renegotiated our agreement with our main bank, Nordea. And I will not go through all the details in that agreement. You can find the most important things commented in a note to our quarterly report. But I will highlight 4 important things. First of all, the agreement is more favorable when it comes to debt repayment schedule. So we have secured a 3-year agreement with a 1 plus 1 year option for extension. And it means that we can keep more of the cash in the company rather than take all the cash we generate and spend it on paying down our loans. The terms are more favorable as we have performed better in the past quarters than we feared back in 2020. We have improved commercial terms, lower interest margin and also a more reasonable covenant structure, which means that we will spend less money on interests going forward, or financial items. We have increased flexibility. So some of the Norwegian kroner loans can be converted to euro and U.S. dollar loans, which gives us more flexibility to also hedge some of the balance sheet items and also some of the contracts and expected cash flows on larger contracts. We have also extended our guarantee limits, which are important in terms of new contracts. So the guarantee frame has been extended by NOK 20 million from NOK 130 million to NOK 150 million, and that gives us headroom for project-related performance guarantees. So all in all, there was only upsides related to the new loan agreements compared to the old one. If we look at the outlook, this is a slide we always start with. It's our 2020 to 2023 plan. We are done with the first part, the so-called restructuring or focusing. We have reduced the business complexity. And I think you can see in the numbers that we are developing in a positive direction. And the second phase of our plan is, I would say, even more important. It's to build a strong presence in existing core markets and also make investments in our technology and our portfolio to, sort of, regain a reputation as the prime mover in traffic technology. After all, the way to win contracts and grow the business is by having the best solution for your customers. So a small update on this. This slide, I've shown in past presentations. I think it's quite detailed, and it's probably going to be the last time I show it. But people have asked, "Can you really justify the fact that you have NOK 160 million, NOK 170 million in annual recurring revenues in Tolling?" And I would say, yes, this slide shows you how we generate that. So we now have 8 core markets in Tolling. They are -- we have a solid presence there. We have recurring revenues. We have, in some of these markets, large project deployments going on. In Traffic Management, we have 5 important customers that generate steady cash flows and revenues, which means that we now generate increasing recurring revenues. In the previous quarter, first quarter, if you annualize the recurring revenues, we were at NOK 215 million. To annualize the recurring revenues at the end of the second quarter, we are at NOK 230 million. So a NOK 10 million increase in Tolling and a NOK 5 million increase in Traffic Management. And maybe more importantly, what are we going to do in order to increase the sale of recurring revenues or grow this revenue base going forward. And there are several drivers. If you look at Tolling, tolling service and maintenance, whenever we win a new contract, we typically also win -- or a roadside contract, we typically also win long-term service and maintenance contract. And that delivers recurring revenues over a period of 8 to 10, maybe 15, 20 years. In addition, we could explore enhanced reporting services on top of the existing agreements, so to use our know-how and insights to generate data and decision-making material for our customers and make it available in a smart format. That's something that we could potentially add on top as a recurring revenue. Back office, we have developed a SaaS solution for tolling service providers in Norway. And we could also look at it for rental car companies. So it's possible to take our, sort of, big software package and make a light version of that and sell it to European tolling service providers and rental car companies on a SaaS model. SaaS could become HESaaS, or Hardware-enabled Software-as-a-Service, where you don't sell the tag as a product, but you sell it as a service. So there's a subscription related to the tag rather than the customer having to buy it upfront. Tolling projects could, instead of being structured as a delivery plus service and maintenance, become revenue sharing or transaction-based agreements. So that's something we are looking into. And I think that's more realistic for new markets than for existing markets. ALPR is by itself almost recurring. We continue to expand in the U.S., and we will try to expand in Europe with our recurring revenue model. So that's a service we deliver, and it generates today roughly NOK 30 million in recurring revenue. So that's something we would like to grow. It's a high-margin, fairly attractive service that we offer. In inter-urban, we already have a number of operation and maintenance contracts, and we are pursuing more of those contracts. We are also pursuing smaller local SaaS contracts, so get scaled down, light versions of a statewide system applied on a local level for a single city or a county. So we have the first examples of customers signing up for these type of contracts on the SaaS model, actually with no end date. So as long as we deliver, they will continue to run. And for urban, the same opportunity to convert existing software contracts, typically structured as traditional sales contracts where the customer pay upfront -- pays of front for the license and instead put them on a subscription model. But I have to say, we have the ideas in some areas. We have the products and offerings, but it takes 2 to tango. We also need the customers to see the benefits of moving in this direction. Some do. Some don't yet. So we have to be a bit patient on the conversion. But we are seeing progress. And I think also customers over time see the benefits of having a service model rather than the traditional sales model in terms of getting continued support and continued upgrades and access to the latest and greatest. So this is something that we put very high on our priority list, and we'll continue to pursue. Of course, enabling a strong presence in existing markets and also new products and services is the new technology. And we continue to invest in our offering and our technology base, both in Tolling and in Traffic Management. And what pleases me is that all these investments, which are, of course, risky, they have translated into a high win rate and a solid order backlog. If we look at the value of all the contracts, larger contracts that we have targeted in the past 12 months, our win rate in terms of value has been 67%. I find that quite astonishing. It could -- I don't expect it to continue like that, but it proves that we have a very competitive offering. When we eye opportunity and we go for it, we win 2 out of 3 tenders or contracts. And that, I think, is a remarkable achievement over the past 12 months. Order backlog has then increased because we have the high win rate. And we -- I'm not afraid of lack of opportunities in the coming 6 months. Again, this is a bit difficult for us to assess. We are not the ones calling off the tenders. We are not the one that, sort of, decide when contracts will be signed. But if we look at the time lines indicated for new business, we are talking about more than NOK 1.3 billion in opportunities in the second half that will be awarded. There might be some delays due to COVID-19 or customers decide to postpone certain projects. But what is good now is that there's a nice distribution between different types of opportunities. So we have the tag sales or product sales opportunities. We had the system sales. We had the automated license plate recognition software opportunities. We had the Traffic Management opportunities and a host of miscellaneous smaller orders. So there's enough to target in the second half, and I expect that some of these opportunities will come our way and boost order intake. So we're not worried about order intake, even though some might think that the order intake in the second half was a bit soft. If we look further into the future, the second -- the third step of our strategy is, of course, to scale standardized solutions to new selected markets. We need to grow geographically also in order to generate growth. And we will enter new tolling markets over time to leverage our portfolio innovations and also our increased scalability. There are quite a number of ongoing initiatives when it comes to new tolling schemes in Europe. Predominantly for trucks or heavy goods vehicle tolling, examples include Ukraine, Croatia, Serbia, Latvia, Lithuania, Estonia. So Eastern Europe and Baltics, lots of opportunities related to truck tolling. And in the major cities or capital, also opportunities related to congestion charging, which we have in Gothenburg, in Stockholm and partly also Oslo. Switzerland is looking into road user charging. So that could be an opportunity to pilot and later commercialize our new road user charging technology concept. Italy is opening up. It has been almost a monopoly for many years. It's now being deregulated, opportunities both for tags and system sales. And of course, we also have some quite important markets, existing markets that will continue to upgrade their old tolling infrastructure, and that gives us opportunities to win new contracts in those markets. We're talking about Spain and Portugal and France and Norway and Sweden. So lots of opportunities in terms of Tolling. And as I said, to really get the growth. We, at one point, we need to add new markets. And it is good to see that there are plenty of opportunities out there. There are even more opportunities, but these are sort of the more specific ones. In Traffic Management, the market has been fairly slow in the U.S., both in 2019 and 2020. And it has been a bit slow also in 2021. It has to do with the COVID-19 pandemic, but also due to the fact that the state's Department of Transportation have been underfunded. They derive most of their income from gas taxes. And as people have worked from home, traveled less, that state DoTs also generate less revenues. And as a long-term trend, vehicles become more fuel efficient. So it means that they generate less revenues. And consequently, they have had to put investments and planned projects on hold because they haven't really had the financing nor the people available to do all these projects. With the proposed infrastructure built, and we're talking about USD 1,200 billion, USD 1.2 trillion, to be spent on infrastructure in the U.S. $300 billion have been earmarked for transportation to improve roads, bridges, tunnels, safety. Some of that money will come our way. And we will benefit, one, from the fact that the DoTs now get federal grants, so they can continue with already made investment decisions; and two, hopefully, they will also channel some of the new funds towards intelligent traffic management opportunities. So we hope that by passing the Infrastructure Bill, we will have a market rebound in the U.S. Things are looking brighter in the U.S. You can see it in the numbers also that Traffic Management delivered positive results, but we expect more from that division going forward. We have communicated a set of financial targets, both for 2021 and more long term for 2025. I'd like to offer an update on that outlook. For 2021, we have set 10% organic revenue growth, which means currency adjusted and adjusted for Parking assets we divested. So if you take out the assets held for sale from the equation and you apply same -- the same exchange rates in both 2020 and 2021, the growth in the first 6 months was 16%. So we're actually ahead our target. For the second half, we don't know yet. There are lots of exciting opportunities and good things happening. There's also a few challenges. One is global supply constraints on chips and microcontrollers. I think that's something which is not specific to Q-Free. It's definitely hitting all providers of tags or onboard units, and it's hitting automotive companies and electronic companies. And it's basically a supply constraint on these chips and silicon wafers. Which means that some of the orders that we had in our plans might be postponed to 2022. We do not lose the orders, that's important, but they will potentially be postponed in terms of revenue recognition. So depending on how much of the tight volumes that will be shifted to 2022, it's hard to sort of give a very hard target for revenue growth. But with the start we have, and also some of the good things we have in our pipeline, we are positive when it comes to revenue growth for the year. We'll probably come back in the third quarter, then we know more about specifically what is happening to the tags. But we're not dependent on tags alone. And even regardless of what happens with tags and product space, we are quite optimistic that we will deliver more than 10% EBITDA margin. It's 11% year-to-date for continued business. We have a [ favorable ] product mix. We have a solid gross margin structure. And we have a solid cost control. So tags and products are not accretive when it comes to margins. So we have some leeway on the margin side. And I feel very comfortable with the more than 10% EBITDA margin target. For 2025, it's unchanged. We still believe in NOK 1.3 billion to NOK 1.5 billion. As we showed on the previous slide, several large tolling projects expected in new markets, plus replacement contracts in existing markets. We hope the planned Infrastructure Bill will lead to a market recovery for Traffic Management in the U.S. And as you can also see in our numbers, we do have operational leverage. When we increase revenues, we translate that into higher margins. We have increasing share of software revenues, and there's an ongoing conversion to SaaS and recurring revenues, which we will continue to work hard on in the coming quarters and years. So for 2025, we are very optimistic, and we also believe that 2021 will be a good year. Then we have the questions and hopefully some answers also to those questions.

[Hakon Rypern Volldal, CEO & President]

If I look at the live event chat, there's a question related to -- is there still some interest from other companies to buy the entire Q-Free? And I think when it comes to structural processes, I will not comment on that. We did receive an indicative offer, which we turned down. And I think that was commented on in the announcement that we -- when it comes to structural processes, they tend to be kept secret for a reason. So whether we are in discussions or not in discussions, I don't think I will comment on that. If we have something specific and concrete, we will announce it through a stock exchange announcement to the market. It will not be something I say during quarterly presentations. One question. Growth, given the comment on tags for second half, how should we view second half revenues versus first half '21? Good question. We don't know that yet. But I think typically, in the second half, we have a high project deliveries. We tend to get up-sell orders on existing contracts. A lot of customers are very traditional. They start the year slowly. They are afraid to spend money in the first quarter, and then they want to use their budgets before year-end so that they receive the same money or more money next year. So first quarter, from a seasonality point of view, is weak. And the fourth quarter is traditionally stronger. There might be some variations. But I would say even if we don't get the tag sales in the second half, tag sales in the first half haven't been fantastic either. So I don't see that the second half nominally should drop off versus the first half. Margins. Is the OpEx base in the second quarter or first half a fair run rate level? Yes, I mean there were some things happening in every quarter. This quarter, we have had to book a couple of million NOKs in OpEx because of options. All of a sudden, some of the options, granted options are in the money. Next quarter, it might be something else. But I would say we are on a fairly stable level. The number of employees, which is -- you can correlate number of employees to our OpEx development. It explains probably 90% of our OpEx base. We are now at 360 employees. So of course, we try to provide salary increases, and there's inflation, et cetera. And we try to recruit the best people. That means we also need to, sometimes, pay more when we replace somebody. But we have compensated for that by reducing the number of employees overall. So I think the OpEx base is going to be fairly stable going forward. The lower depreciation and amortization to sales, is that sustainable? And can you explain why it has declined? Well, I think it's going to be fairly stable. It's around NOK [ 15 ] million per quarter. That's the level that we are talking about. And the reason it has come down is, of course, that we don't depreciate the Parking assets anymore. We have fully depreciated some of the old investments we made in Traffic Management. Certain technology projects have been fully depreciated. But then you have new projects materializing. But overall, I would say we have activated less R&D than we did historically. And when you do that over many years, of course, then DNA also comes down. But I expect it to be fairly stable in the coming quarters, around NOK 15 million per quarter. And this one question is NOK 5 million in CapEx a fair run rate level? That could also vary. But again, it has to do with how much we activate investments in property and plant and equipment and how much we activate in terms of R&D. It will vary a little bit. But I would say NOK 7 million, NOK 8 million per quarter is probably, on average, not a bad assumption. There's one question. Q-Free focuses a lot on EBITDA, but the company capitalized a lot of R&D cost level. Well, I wouldn't say it's a lot. It's normally around NOK 20 million to NOK 25 million, which we have to because of IFRS. That's not a big chunk of our investments. We actually take most of the expenses on the P&L. And we have reduced how much we capitalized or activate by almost 50% from some years ago. So I agree it's better to look at EBIT than EBITDA. And especially when we have positive EBIT, we will do that. So in this quarter, you got both. You got both EBITDA and EBIT, and they were both good, so let's hope that will continue. It seems that the most opportunities in Tolling are in truck tolling. Is the more traditional tolling market particularly quiet? No. But from a political point of view, tolling is not an initiative that will make you extremely popular among voters because you basically force people to pay for using the roads, which, in a way, makes sense. But it's easier to target the heavy goods vehicles. And there were a couple of reasons for that. First of all, it's fair that heavy goods or trucks pay more than the light vehicles because they account for maybe 70% to 80% of the road wear and tear. So if you look at the money you have to spend on maintaining the roads, it's basically related to heavy trucks. So to charge them for using the roads is a good place to start.If you introduce a heavy goods vehicle tolling scheme, then that scheme can also, at a later point in time, be extended to cover light vehicles. So I think it's a good and, let's call it, more feasible and easier starting point for most countries to look at truck tolling first and then expand it to light vehicles. But I would say truck tolling on the one hand, and then congesting charging on the other hand. To limit traffic into city centers, to avoid congestion, to finance mass transit solutions, congestion charging is also popping up as an interesting opportunity. And basically, what congestion charging is, kind of, like a fence or a ring around a major city. So regardless of which road you take when you enter a city, you have to pay something to do that. It puts a cost, extra cost ongoing by car, which means it might be cheaper to go by some other transport mode. It raises money to improve other types of transportation infrastructure. And in reality, it also reduces traffic and pollution. So it's seen as a smart solution to tackle both mobility and environmental concerns in major cities. And we see opportunities related to both. From a political point of view, making a decision to introduce truck tolling is easier than congestion charging. There's one question related to borrowings, but did not find. I looked at Note 4, but did not find the installment schedule. You paid NOK 9 million this quarter. Actually, we didn't pay -- there was no down payment in the second quarter. But we had, at the end of the first quarter, spent NOK 9 million of our credit facility, so we repaid that credit facility. So as you can see from the net interest-bearing -- the available cash, it was NOK 91 million from credit facilities at the end of the first quarter and is now back to NOK 100 million in credit facility at the second quarter. So the NOK 9 million is related to that. The installment schedule. I don't have that at the top of my head, unless it's in that note. But it's Petter Kongslie asking, so you can probably give us a call, and we can talk about it. There's one question. How about our markets in Asia, like Australia?Australia is very interesting market. They have lots of roads that are being tolled, and that infrastructure is due for replacement or upgrades. So we are -- we have concluded 2 projects in Australia. One was to upgrade the Cross City Tunnel, which we delivered back in early 2000s. We also upgraded Queensland with new technology. And there were a number of new projects being announced, and they're basically about upgrading both infrastructure. So Australia is an interesting market, and we are positioned there. We have a local team on the ground. We have recent tolling experience from those 2 projects. So it's an interesting market for us. And we definitely hope that some of the orders that we will announce in the coming months will be from Australia. The other important market for us in Asia is Thailand. Again, lots of opportunities in Thailand, slightly difficult times because of the COVID-19 pandemic and also the political system they have there. But we are working on one big project these days, the Don Muang Tollway from city of -- or the city center of Bangkok to the Don Muang airport. And there are new projects coming up. But the really tough part about Thailand is the sliding time line. Lots of opportunities, but they tend to take a bit of time to materialize. So in the short run, I'm expecting more from Australia, and in the medium term, also additional opportunities in Thailand. And those 2 are the key target market for us in Asia. There might be new markets opening up, but I think if we have to prioritize Asian markets or European markets, we would prioritize European markets because of geographic proximity and how we can leverage existing technology. And then our CFO, Trond says that the short-term portion of debt shows the 12-month installment rate, as an answer to the question about borrowings. Then I have any -- I don't see any more questions. I hope I -- there's one more follow-up on working capital, what level of working capital to sales are you happy with? Would be nice with 0 or a negative number. But we are in a business where we do need to make some investments before we get paid. The contract structure has improved dramatically over the past years. So it's, I would say, more sustainable the way it's done now where you do get some money upfront usually. And also the payment for the project doesn't happen on the day the system goes live, it happens in installments related to progress in on the delivery. So I don't have a specific number that I would like to say or it has to be 10% or 8% or 15%, but I think a realistic number is around what we have now 14%, 15%. If we can reduce that, we will, of course, do what we can to do it. But I think that's a fairly realistic target. Okay. That's all we have prepared. As I said, happy with the performance in the second quarter. I hope you're also pleased with the results, and then we will continue to work hard to win new contracts and also deliver strong results in the coming quarters. And if you're going on vacation now or are on vacation, then wish you a nice summer break and see you back in October for the third quarter results. Thank you.