Eutelsat Communications SA

PAR:ETL

Earnings Call Transcript 2021-Q3

[Operator]

Good day, and welcome to the Eutelsat Communications Third Quarter 2020/2021 Revenues Presentation Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Sandrine Téran. Please go ahead.

[Sandrine Téran, Chief Financial Officer]

Good evening, and thank you for joining us on this call where we will present our third quarter fiscal year '21 revenues. I am Sandrine Téran, CFO. And I'm joined by Michel Azibert, Deputy CEO. Let's start by taking a quick look at recent highlights. First, total third quarter revenues amounted to EUR 301 million, in line with expectations. The backlog reached EUR 4. 5 billion, its highest level in the last couple of years, a remarkable performance in the current context. It was up 6% year-on-year and equivalent to 3.5x fiscal year '20 revenues. The outcome of the spring renewal campaign with the U.S. DoD reached a record high 95% rate in value. We have made considerable progress in our fixed broadband rollout. Our 9-month performance enable us to further raise the bottom end of our revenue objective for the full year. And lastly, as announced a few days ago, we have become one of the main investors in OneWeb, gaining a strong foothold in the LEO space. Total revenues for the third quarter stood at EUR 301 million, down 6.4% on a reported basis. This included a negative currency effect of minus EUR 11 million related to the euro-dollar rate, largely offset by a hedging impact included in other revenues, which saw a positive swing of plus EUR 8 million; the positive perimeter effect of plus EUR 2 million, reflecting the contribution of the third quarter from Bigblu broadband. Revenues of the 5 operating verticals were down by 6.1% on a like-for-like basis. Turning to commercial activity. Several contracts were signed in most of our applications. In Fixed Data, a multiyear contract for capacity on the EUTELSAT 172B satellite with New Zealand's mobile operators to provide 4G mobile backhaul services to Chatham Islands, highlighting the strong underlying demand related to the extension of mobile networks. In Government Services, the spring 2021 renewal campaign with U.S. government resulted in an estimated renewal rate of 95% in value, a record-high level. In Fixed Broadband, multiple agreements strengthening our African distribution capabilities have been secured. I will return to this. And finally, in Mobility, we signed a multiyear, multi-transponder agreement with Global Eagle for capacity in inclined orbits at the 139 West orbital slot, following the relocation of the former EUTELSAT 7A satellite. This contract reflects the flexibility to quickly redeploy assets to grasp market opportunity and is a positive signal for the Aero Mobility market, which has been the most affected by the COVID crisis. We have made further substantial progress in our Fixed Broadband rollout. In Europe, the EUTELSAT KONNECT satellite is now operating at full coverage. Our European footprint has been extended to fully cover Germany, Spain and the U.K. while we also launched a commercial service in Portugal. On the wholesale side, discussions with major operators are progressing well. And we have completed the disposal of our Euro broadband infrastructure subsidiary, carrying the KA-SAT satellite to ViaSat, finalizing the reorganization of our distribution. In Africa, we continue to strengthen our distribution capabilities through multiple distribution channels. In South Africa, following the success of our partnership with Paratus, we signed an additional wholesale agreement with Vox, a market-leading service provider. In DRC, we are testing wholesale distribution with the telecom operator Orange. And we signed a contract with Facebook to accelerate the rollout of Express WiFi hotspots, a proven solution for community WiFi across our African footprint, with the ambition to connect several thousand hotspots by 2025. Two weeks ago, we announced our entry into the LEO space through a $550 million investment in OneWeb for a 24% stake, alongside the U.K. government and Bharti. I won't spend too much time on this as Rodolphe Belmer has made a full presentation when it was announced. But just by way of reminder, this represents a compelling entry point into the substantial LEO opportunity, an amount roughly equivalent to our gross C-Band proceeds, coming just ahead of commercial rollout and with OneWeb now almost fully funded.We believe OneWeb is ideally positioned to be among the winners in the non-geostationary landscape, thanks to its strong spectrum rights, first-mover advantage, diverse shareholder base and scalable technology. As a result, this deal represents a compelling economic potential with revenues expected to reach circa EUR 1 billion per annum in 3 to 5 years following full deployment of a highly profitable wholesale approach. Importantly, it is consistent with our financial objectives, hurdle rates, current dividend policy and solicited investment-grade ratings. It will be fully cash funded and leveraged on the C-band proceeds to be received in fiscal year '22 and on our abundant liquidity for the remainder. And it comes with strong commercial potential for win-win cooperation, thanks to complementarity in resources and assets. Now let's take a look at the Q3 performance by application. As a reminder, all commentary on figures relates to a like-for-like basis, i.e., at constant currency and perimeter. Turning to the revenues of each of the 5 verticals. Broadcast, 62% of group total, recorded revenues of EUR 182 million, down 6.8% versus last year. Data & Professional Video, 13% of group total, saw revenues of EUR 40 million, down 6.7%. Government Services, 13% of group total, saw revenues of EUR 37 million, down 0.3%. Fixed Broadband, 7% of revenues, stood at EUR 21 million, a progression of 1.9%. And Mobility, 5% of revenues, saw revenues of EUR 16 million, down by 17.2%. Finally, other revenues stood at EUR 7 million. That included a positive EUR 4 million effect from hedging operations compared to a negative impact of minus EUR 3 million last year. Overall, they were EUR 8 million higher than last year. Third quarter Broadcast revenues amounted to EUR 182 million, down 6.8% year-on-year. Whereas this reflects the slowdown versus the previous quarters, this figure is in line with our expectation and is not reflective of underlying medium-term trends in this application. This evolution reflected the impact of the renegotiation of contract terms with Greece's Forthnet, which will wash out in June; the anticipated broad slowdown in the pace of new business against the current operating backdrop affecting notably distributors, resulting in lower revenues in Europe; and the nonrecurrence of a positive one-off of circa EUR 1 million last year. The fourth quarter is expected to be broadly stable compared to the third. Let's have a look at channels KPIs, which are encouraging. Channel count was stable year-on-year at almost 6,900 channels, reflecting, on one hand, the lowest lineup at 5 degrees West following the end of life in stable orbit of EUTELSAT 5 West A and the anticipated decrease in the Sky Italia lineup; on the other hand, the lineup progression in emerging markets, in particular in Latin America, with BluTV and in Africa with MultiChoice. Quarter-on-quarter, channel returned to growth, up 4%. The number of HD channels continued to progress with a double-digit growth year-on-year, reaching a penetration rate of 27%, 3 points higher than a year ago. The vast majority of key orbital positions contributed to this progression. At the same time, MPEG-4 penetration continues to be more advanced than HD, with a 73% penetration rate, up 4 points year-on-year. It is worth mentioning that the transition is now almost completed at HOTBIRD with a rate close to 90%. Third quarter Data & Professional Video revenues stood at EUR 40 million, down by 6.7% year-on-year. Fixed Data continued to face price pressure, but this is now partly offset by growth in volumes, in particular in MENA and Asia Pacific. Professional Video was once again in decline year-on-year, reflecting structural headwinds in this application as well as the phasing of a specific contract, which is detrimental to the second half but neutral over the full year. Third quarter Government Services revenues stood at EUR 37 million, virtually stable year-on-year. They reflected, on one hand, the contribution of the EGNOS payload, which entered into service on February 15 last year on EUTELSAT 5 West B as well as new business with U.S. customers; on the other, the negative carryforward effect of U.S. government renewals in 2020, which stood at 85% in spring and 80% in fall. The latest renewal campaign with the U.S. government, spring 2021, resulted in an estimated renewal rate of circa 95%. As a reminder, fourth quarter revenues will reflect a tougher comparison basis as the same period last year included a positive one-off related to the temporary relocation of EUTELSAT 7A, representing a couple of million euros. Third quarter Fixed Broadband revenues stood at EUR 21 million, up 1.9% year-on-year. This reflected, on one hand, the initial revenues generated by KONNECT Europe, including the start of the wholesale contract with Orange from 1st January as well as growth in our African operations; on the other, the decline in the contribution of EBI carrying the mature KA-SAT satellite, which was sold to ViaSat in April. Quarter-on-quarter, revenues were down by 12.9%. As a reminder, the second quarter included a high level of terminal sales, and this trend should not be extrapolated going forward. Third quarter Mobile Connectivity revenues stood at EUR 16 million, down 17.2% year-on-year. This reflected the impact of the COVID-19 crisis on Aero Mobility, leading to lower airtime-related revenues on KA-SAT and to the renegotiation of contracts with certain service providers. Conversely, Maritime revenues remained on an upward trend on the back of the ramp-up of the contracts secured in the past couple of years. On a more positive note, revenues are stable quarter-on-quarter. The recent agreement with Global Eagle highlights the underlying demand in the aero market and will bring incremental revenues in the fourth quarter, and the comparison base will considerably ease from the fourth quarter. Turning back to backlog and fill rates. The backlog stood at EUR 4. 5 billion at 31 March 2021 versus EUR 4.2 billion a year earlier and EUR 4.4 billion at end December 2020. It includes the long-term renewal contract with Sky Italia, the wholesale agreement with Telecom Italia and the additional EGNOS payload on the future EUTELSAT HOTBIRD 13G Satellite. The backlog was equivalent to 3.5x 2019/'20 revenues, with Broadcast representing 64%. The number of operational transponders at 31 March 2021 stood at 1,366, down by 11 units on end June. This reflected principally the end-of-life in stable orbit of the EUTELSAT 48D satellite. The number of utilized transponder's stood at 950, down 9 units year-on-year basis and by 17 units quarter-on-quarter, reflecting principally the same effect. As a result, the fill rate remained at around 70%.Let's now turn to the outlook. On the back of our revenue performance of the first 9 months, we are once again in a position to raise the bottom end of our full year objective of revenues of the 5 operating verticals by EUR 10 million to between EUR 1,200 million and EUR 1, 220 million. This includes the impact of changes in perimeter, notably the effect of the deconsolidation of EBI from end April. All other elements of the financial outlook, including cash CapEx, adjusted discretionary free cash flow, leverage targets, dividend policy, are confirmed. I thank you for your attention. Michel and I are now ready for your questions.

[Operator]

[Operator Instructions] We'll take our first question from Michael Bishop with Goldman Sachs.

[Michael Bishop, Equity Analyst]

Just the first question is really what's driving the slightly higher confidence in the revenue guidance? It sounds like, running through the presentation, obviously, you're still flagging quite a few of the well-known headwinds in Q4. And really, the 2 things I was picking up on was the better government renewals. And then, secondly, you mentioned the GE contract actually driving some incremental revenues in Q4, which I guess is new. But any more color on that upgrade and the composition would be great. And then secondly, just turning to video and I guess your reiteration of the medium-term outlook. I was just wondering if you had any more thoughts or updates on sort of navigating Nilesat's contract renewal because, obviously, that's one of the key renewals that I think you need to sort of execute on to keep the video trends in line with the long-term guidance.

[Sandrine Téran, Chief Financial Officer]

Thank you, Michael. So the first question on our confidence in the Q4 figures, so as you mentioned, we will be helped in Q4 with spring high level of renewal from the government vertical as well with the Global Eagle contract in Mobility. On top of this, it's important to highlight that the comparison basis will become easier in Q4. Q4 last year was the first quarter affected by COVID, in particular in mobile connectivity and Professional Video. Also, we have some phasing impact in Q3 that will not be there in Q4. I mentioned a few of them during the presentation. I can maybe reiterate the main ones. The Professional Video, for instance, we have a contract which has a detrimental phasing in Q4 and -- in Q2, so sorry. This one will have the same impact in Q4. We had a high level of terminal sale in broadband in Q2. It will not happen in Q3. And I will also mention that we will have, of course, the progressive ramp-up of KONNECT capacity with the team contract that will start bringing effect in Q4 and also potentially some other new wholesale contract to come, the growth in our European retail, also in broadband and some progress in Africa. So for all these reasons, we are in a comfortable position to raise, as I mentioned, the low end of our guidance. And I could also maybe add that for the Broadcast segment, we expect the Q4 to be in the same line as the Q3. As regard with the Nilesat contract, so I will not tell more today than what we have already expressed, which is that we have 2 options, 2 alternatives that we are still looking at. We may renew the contract with Nilesat, but we may also decide to take back some capacity to sell direct. We have strong commercial capabilities in MENA notably since we purchased Noorsat. So we are still working on this, and we will not further comment until there is an outcome on this renewal of the contract with Nilesat. Thank you, Michael.

[Operator]

We're taking our next question from Aleksander Peterc from Societe Generale.

[Aleksander Peterc, Equity Analyst]

Just a quick follow-up on Nilesat. In the event you do take back some of that capacity, should we expect a temporary headwind as you then try to sell directly that capacity? Is that a possibility, if that indeed is the option you go for? That would be my first question. The second one, really on -- just on the [ CDOs ]. So you said in the fourth quarter, we're going to see some stability, which is good. But given that you have some headwind that you peg to pandemic effects in terms of new business wins, do you expect any of that to come back once we start easing restrictions? Or should we just kind of assume in the model small declines going forward? And then the third one is a client of yours in Holland [ declaring bankruptcy ]. That's Joyne, which has been a client, I think, since 2017. Is there an impact for you guys from that bankruptcy? Do you have any receivables that you have to write down there?

[Sandrine Téran, Chief Financial Officer]

Aleksander, thank you for your questions. So coming back to Nilesat, if we were to take back some capacity from Nilesat, we might be able to actually internalize or make -- gain the margin that was made previously by Nilesat. And I would also remind you that in MENA, we have been doing well over the last months and years, and we are even able to increase prices when we renew contracts with our own customers. So we expect actually that both strategies could bring a good outcome in -- at the moment of the renewal of Nilesat's capacity. On the video headwind that we have this year, which, I'll remind, is linked to a slowdown in the pace of new business, especially in Europe and in relation mostly to the free-to-air channels, which are facing a significant reduction in their advertisement resources, and we can also see this at the level of distributors. We may have or might have some carryforward effect of this in the next coming quarters. But we hope that when we exit this crisis, we will gradually go back to trend which are more in line with what we knew before the COVID crisis. On Joyne, we are following very carefully the financial situations of our clients, especially when they are in financial difficulties. This was the case for Joyne. So we were watching the situation of Joyne for many months now. And I would even add that in the light of the situation, actually, we did not recognize any revenues in our accounts for the Joyne contract in fiscal year '21.

[Operator]

We're taking our next question from Ben Lyons from Crédit Suisse.

[Benjamin Lyons, Research Analyst]

I was just wondering -- I have a quick one on EBI. Whether you'd be able to quantify the contribution in Q3, that would be quite helpful. And if you're seeing any positive signs in Mobility. I know you've signed the Global Eagle contract. Are you seeing any sort of signs of life in the IFC market? And lastly, it's maybe a bit more longer term, on OneWeb. Have you given any thought to long-term CapEx given you are likely to take OneWeb capacity? Will that affect any of your plans?

[Sandrine Téran, Chief Financial Officer]

Sorry, may we ask you to repeat the second question? We did not catch it.

[Benjamin Lyons, Research Analyst]

Yes, sorry. I hope line's okay. Just in terms of the Global Eagle contract, are you seeing any positive signs from any other distributors or anyone taking on extra capacity in the IFC market?

[Sandrine Téran, Chief Financial Officer]

Okay. So maybe starting with this one on the IFC. So we have the good news of Global Eagle, but we have, at this stage, low visibility on the short term. So there is no new contract that we can announce. But the Global Eagle agreement shows that there are some opportunities that will come back and that we are in a good place to seize those opportunities, including through the relocation of satellites and extra -- sorry, the using of the inclined orbit resources. But nothing -- no other contract to announce at this stage. On the OneWeb question, I will ask Michel to bring you an answer.

[Michel Azibert, Deputy Chief Executive Officer]

Yes. The CapEx of the first generation will be fully funded as a result of us joining OneWeb and the existing commitments. So there is no issue for funding generation 1. For funding generation 2, the CapEx will probably come in, in calendar year '25 and more importantly, in the following years, '26, '27. At this point in time, of course, the company will generate some positive operating cash flow, and the rest of the funding, the group of shareholders will take care quite easily. So we do not anticipate any lack of funding there. And on top of that, there are obviously synergies between generation 1 and generation 2 in terms of CapEx avoidance. So you should expect, of course, a funding need for generation 2 which will be lower than for generation 1 for the same amount of capacity provided. Of course, generation 2 could be bigger in this case. Of course, it will come with more CapEx.

[Benjamin Lyons, Research Analyst]

Sorry, if I may follow up. Just given different situation with OneWeb, would you take any capacity from OneWeb and perhaps not launch as many satellites yourself? Or is that not really in the question?

[Michel Azibert, Deputy Chief Executive Officer]

Sorry, I didn't get the question, sorry.

[Benjamin Lyons, Research Analyst]

Sorry. I'm just wondering whether you would take capacity from OneWeb and perhaps have less satellites yourself, i.e., spend less CapEx within the company and maybe wholesale -- or use wholesale access of OneWeb satellite.

[Michel Azibert, Deputy Chief Executive Officer]

Yes, sorry. You mean that Eutelsat -- savings on Eutelsat side. Yes.

[Benjamin Lyons, Research Analyst]

Exactly, exactly.

[Michel Azibert, Deputy Chief Executive Officer]

Yes, of course, because, in general, as you understand, the focus of OneWeb will be on the connectivity, meaning Fixed Data, government, Mobility. And the satellites that we have in our fleet which are focused on connectivity, with maybe the exception of EUTELSAT 10B with mobility over Europe, but in general, we have already started, let's say, saving on this. Now of course, that -- our connectivity play, our B2B connectivity play will be mostly through OneWeb. Obviously, that would result in savings on our CapEx for the renewal of the connectivity satellites in the future.

[Operator]

We'll take our next question from Roshan Ranjit from Deutsche Bank.

[Roshan Vijay Ranjit, Research Analyst]

Two for me, please. And first one, just to maybe circle back to some of the previous questions around the Broadcast. If I think back to some of the comments made specifically around free-to-air channel count last quarter, you had flagged the slowdown in the second half and again, echoing what you've said now, a return to that channel count -- or rather, channel growth. If I look at the KPIs, you are saying that the channel count was broadly stable year-on-year. So should we be thinking about the free-to-air channels coming at some of the more premium locations, maybe supporting better pricing? Again, how do we just get a bit more confidence in that this isn't the kind of new normal for free-to-air channels? And secondly, Michel, I think when we spoke around maybe 2 quarters ago, we were talking about discussions ongoing with other European telcos on wholesale contracts. Have these discussions moved further down the road? And are you soon able to announce any more wholesale contracts? That will be useful to know how those discussions are going now on the KONNECT satellites.

[Michel Azibert, Deputy Chief Executive Officer]

On the -- on your first question, which is basically on the channel KPIs, yes, as you have noticed, the quarter has been quite good because we have a significant increase of the channel count during the quarter, which means that in the end, on a year-on-year basis, we are now stable. The main reason for this is related to pay TV in fact, not to free to air, which still needs to be -- to come back, let's say, in the following quarters. We have had very good results in pay TV in Africa, in particular with MultiChoice. You'll remember that we have announced a couple of months ago that MultiChoice has reserved more capacity from us, which corresponds to a business they have in pay TV, DTT, terrestrial DTT. So that's a significant number of new channels that we are embarking from MultiChoice. At the same time, we have also good news coming from Latin America with the pay TV platform called Blu. So that -- the additional, let's say, count for most of it comes from that, although we have a couple of good news also coming from the Middle East. In the future, for the free to air, I would say, in the next quarters, probably some of the free-to-air new business that has been delayed because of COVID will progressively come back, I would say, hopefully, in Europe, which is where we have most of the free-to-air business and of course, in the Middle East and North Africa, where most of the business is free to air. But that will be more for the following quarters, I think.

[Roshan Vijay Ranjit, Research Analyst]

So just to follow up, so would you say that maybe some of the support going forward is more related to the kind of pay TV upside that you maybe booked this quarter rather than a kind of return to the free-to-air channels? Is that fair or...

[Michel Azibert, Deputy Chief Executive Officer]

Yes, I think, in general, probably. Yes, first of all, when you split our revenue altogether, I mean, combining emerging markets and Europe, of course, the majority of our revenue and by the way, the majority of the channels are, in fact, pay TV channels. So if you take the big figures, the return to better numbers in Broadcast would probably, in my view, come a little bit more from the pay TV than the free to air, including in Europe, where we have a couple of prospects. But the free to air will contribute. For instance, in Africa, at 16 degrees East, we currently have a good flow of new channels joining, but it's maybe a little bit less important in terms of figures. There was another question on the broadband -- on the telcos.

[Roshan Vijay Ranjit, Research Analyst]

Yes, yes. That's right, exactly. Just any more discussions with telcos? Because I think you did mention...

[Michel Azibert, Deputy Chief Executive Officer]

So of course, the negotiations with the telcos is similar to the one we had with Orange or the one we have last autumn with TIM, it takes some time. But yes, we are quite positive and optimistic that we will end up adding some other in that, especially, of course, in Europe with a combination of KONNECT and KONNECT VHTS, which gives a very good medium- to long-term perspective for these telcos. So yes, we hope that we will be able to announce something in the quarters to come.

[Operator]

[Operator Instructions] We'll take our next question from Patrick Wellington from Morgan Stanley.

[Patrick Thomas Wellington]

Just going back on Broadcast. You often put in your slide pack that chart of quarterly revenues to show the stability of the Broadcast revenues over a period of time, which, if you remember, in '18 and '19, was about EUR 197 million a quarter. In 2020, it was between EUR 193 million and EUR 196 million. But so far in '21, it's between EUR 182 million and EUR 189 million. So I suppose my question is what is the new normal in terms of stability? When you say things are going back to normal, are we going back to the EUR 197 million of '18/'19, the EUR 193 million of '20 or the sort of EUR 180-ish million of 2021?

[Sandrine Téran, Chief Financial Officer]

Thank you, Patrick. So as I mentioned before, I think we have some specifics this year in Broadcast which are very well identified, the first one being the impact of the renegotiation with Forthnet, EUR 10 million impact in fiscal year '21; and the main other one being the slowdown in the new business and the delay of new entrants on the DTH environment. Those 2 specifics are hitting H2 significantly more than H1 due to the phasing of contracts, and we knew it. And I think we mentioned it as soon as in Q1, that we were expecting H2 weaker than the H1. Overall, when you look at the last 3 years or 3.5 years, our Broadcast declined by something like 1.5 CAGR, if you look at the slide you are referring to, with all the quarters for the last 3 or 4 years, so minus 1.5 CAGR. If you add the impact of Forthnet and the impact of the slowdown on business in fiscal year '21, you can have for fiscal year 2021, especially -- and I mentioned it, especially 1 or 2 more points in terms of decline. Again, those 2 items will wash out in the future, and the Forthnet one will wash out completely in July, from July 2021. And I mentioned also that Q4 revenues for broadband would be at the same level, more or less, than the Q3 revenues. On the good news, we have those encouraging KPIs coming from the channels. We hope that we will come back to a more normal level of new business. And I think this is all we can say on this at this stage. So the specific negative that we can see now in H2 fiscal year '21 should not be extrapolated to the next year. They are very specific to fiscal year '21 and to H2, especially.

[Patrick Thomas Wellington]

Well, that's true and sort of not true at the same time. I mean the EUR 10 million of revenue from FRANSAT (sic) [ Forthnet ] has gone forever. So are we -- when we -- when you produce that chart in the future, are we going to be running at a sort of trend line of EUR 185 million a quarter as opposed to the starting point of EUR 197 million? It's very rarely that we actually get any growth in that chart. And I can remember back in FY -- I think it was FY '18/'19, Rodolphe was very optimistic that there were going to be some Broadcast contracts that were going to help at the back end of the year, and they never seem to arrive. And the sort of overall trend goes from top left to bottom right, if you like, on that chart. So the new level is presumably somewhere in the 180s.

[Sandrine Téran, Chief Financial Officer]

Yes. The minus EUR 10 million of Forthnet will not be back. We saw this, definitely. So you can consider that there is a step down by this EUR 10 million between '20 and '21. That's true, Patrick. It doesn't mean that -- there will be other contracts to partially maybe compensate, but it's not something -- I mean we are not at the moment to give a guidance for '22. And as you know, we don't guide especially vertical by vertical. But to take this example, yes, the EUR 10 million less from Forthnet will not come back with Forthnet. So you can consider that there is a new base reduced by EUR 10 million.

[Operator]

We're taking our next question from Giles Thorne from Jefferies.

[Giles Thorne]

It was one question on the impact of Orby TV shutting down in the U.S. Could you quantify the timing and the impact on Eutelsat? Maybe there is no impact because you have Globecast sitting between you and Orby, but any color there would be useful.

[Sandrine Téran, Chief Financial Officer]

Thank you, Giles. Actually, the impact is very minimal to, say, no impact because the activity did not really start. So there is no impact in terms of Broadcast revenues deriving from the Orby termination.

[Operator]

There are no further questions at this time. [Operator Instructions]

[Sandrine Téran, Chief Financial Officer]

If there are no further questions, we thank you very much for your attendance and your questions. And Michel and I are wishing you a nice evening. Thank you very much.

[Michel Azibert, Deputy Chief Executive Officer]

Thank you. Bye.

[Operator]

This concludes today's call. Thank you for your participation. You may now disconnect.