La Francaise des Jeux SA

PAR:FDJ

Earnings Call Transcript 2023-Q1

[Operator]

Hello, and welcome to the FDJ first quarter revenue call. My name is Noni, and I will be your coordinator for today's event. [Operator Instructions] Please note this conference is being recorded. And I will now hand you over to your host, Mr. Pascal Chaffard, Executive Vice President In-Charge of Finance, Performance and Strategy, to begin today's conference. Thank you.

[Pascal Chaffard, executive]

Thank you, and hello, and good evening to all, maybe, good morning according to your time zone. You might have read the press release that we published a few minutes ago after closing of the market. The presentation that I'm going to comment is available online in the Investors section of our corporate website. I will present to you our Q1 2023 revenue and also share some other information regarding the group. Then, we will have a Q&A session. I begin by the first slide of the slide show. Really 2023 has started well with good results in all areas for FDJ. In the first quarter of 2023, our revenue amounted to EUR 662 million. This represents an increase of 8% compared to the figures published in Q1 2022 based on an almost 9% growth in stakes. Stakes amounted to EUR 5.5 billion in Q1. The revenue is an increase of 5.3% on a pro forma basis, i.e., taking into account in 2022 over the full year, the acquisitions of Aleda integrated from mid-November 2022 and also L'Addition integrated from the end of July 2022.This growth calculation with this pro forma basis is the one used to communicate our guidance, which is a 4% to 5% revenue growth over the whole year. We are in line with this guidance and we confirm our objectives. Our point-of-sale activity grew by 7%. Thanks to the good traffic level and also the attractiveness of FDJ game offering, especially in sports betting, but also in lottery. Online stakes remained dynamic, driven by both lottery and sport betting. They are up plus 21.3% to nearly EUR 700 million, a performance that is mainly attributable to the increase in the number of players. It means it's a sustainable growth. The digital penetration is now close to 13% of our total stakes.The lottery revenue rose nicely by 6%, while sports betting revenue remained stable due to high level of player winnings in Q1. This quite usual situation will normalize and have even already normalized by mid-April. We are not worried for the all year revenue. And I will come back in more details to these different elements.But before, I would like to speak a little bit about our extra financial performance. And as you know, FDJ's economic performance goes hand in hand with its extra financial performance that we assessed about various agencies. And Moody's ESG Solutions has rated the group, 72 out of 100, the same grade as last year, but in a more demanding context. It should be noted that Moody's has modified its rating system and no longer issue a letter grade as previously, but only disclosed a ratings out of 100. This is why we don't refer anymore to the A1+ rating obtained the previous years.Before diving a little bit more to the ESG rating and coming back to our revenue performance, I'm happy to share the positive decision of the French highest administrative court, Council of State or [Foreign Language] in French, that validates the privatization procedure and confirms FDJ's monopoly in compliance with European law. Taken to court in December 2019 by an association and several gambling companies, the French Council of State ruled on April 14 that the monopoly of La Francaise des Jeux complies with European Union Law. And the Council of State also wrote that the 25 years duration of these exclusive rights defined in the backlog is not excessive.Finally, with regards to the EUR 380 million equalization payments paid to the state by FDJ for these exclusive rights. The Council of State points out that it will decide after the European Commission's ruling on the appropriateness of this time following its investigation into the state aid initiated in July 2021.We can move to the next slide to give you some more color about ESG. FDJ received a rating of 72 out of 100, I said that 1 minute ago, same as in 2022. FDJ is, thus, ranked 20th worldwide out of more than 4,800 companies and is first in the large sector, including hotel, leisure goods and services, and gambling is part of this larger sector and this large sector includes 44 companies.If we now look at our peers from the gambling subsector, FDJ is far ahead since the second place goes with a score of 53 out of 100, remember that we have 72, and the third place with a score of 46 out of 100. In detail, the digit grades are 67 for Environment, 74 for Social and 71 for Governance. And we are very proud of our ESG positioning and we will continue to work hard to stay at this level and improve it further.So let's move to the detail of our performance on the next slide. Regarding lottery first, revenue amounts to EUR 497 million, an increase of 6.4% driven by a similar overall increase in stakes. The performance of Loto and EuroMillions is notable. The lack of natural high jackpots had been offset by events driven by FDJ like Millionaire [indiscernible]. As a reminder, Q1 2022 was a quarter with a low number of high jackpots and Q1 2023 has the same profile.The performance of instant games reflects the success of the animation of the portfolio with the very successful launch of the -- game named Carre Or in January despite a high comparison basis. In Q1 2022, we have benefited from the record relaunch of the bestseller cash at the beginning of 2022. So it was other comparison basis. And on this basis, we had a nice growth.Regarding sport betting, the revenue was stable at EUR 129 million, while stakes recorded double-digit growth, mid-teens overall, with online growing at twice the point of sales pace. This growth is driven by the momentum we gained since the summer of 2022 and accentuated during the Football World Cup and has been boosted in Q1 with a high level of player winnings. In Q1 2023, those player winnings are up sharply compared to Q1 2022. That explains the performance gap between revenue and stakes.For example, in Q1 2023, price payout was at 78.5% versus 74.7% in Q1 2022. As we have already seen on the numerous occasions, higher price payout impact revenue in the short term, but it's favorable to the business on the medium term. The PPO will normalize on an annual basis. And as I said before, since the end of the quarter, the level of PPO has already returned to normal, I can say, as the level of revenue growth; so no worries for the whole year. We really prefer to face a high level of activity and a high level of PPO than the opposite.And finally to end with our revenue, adjacent activities are benefiting from the integration of Aleda and L'Addition represent globally, growing EUR 37 million revenue doubled versus reported 2022 figures.If we now move to the next slide to talk a little bit about our online activity. We can see on the slide the quarterly track record since 2021. Over the quarter, online stakes grew by 21%, match the record level of stakes reached in Q4 2022. On the lottery alone, online stakes reached the record level of Q3 2022.If you remember this quarter benefited from a significant number of high jackpots, which was not the case in this quarter, as I said. And in sport betting, online momentum remains very strong, even higher than the 20% growth of 2022. Online stakes growth continued to be driven by the number of players, both in lottery where we now have over 5 million online players and sport betting. All these elements illustrates the strength of the digital state base, what I said in previous quarters, that was a peak becomes now the base, and it's exactly that. The digital penetration rate continued to grow and is now, as I said before, close to 13% for this quarter.And now if we move to the last slide, maybe a word about our financial calendar. Our Annual General Meeting will be held in a week time on April 27. Shareholders will be asked to approve a dividend of EUR 1.37 per share for the 2022 financial year with a payment on the 9th of May. Our H1 results will be published on Thursday, July 27, after trading hours. And to conclude, I would like to express our confidence in achieving our 2025 objectives, which are revenue growth of between 4% and 5% based on the 2022 financial year, including Aleda and L'Addition on a full year basis, i.e. EUR 2.5 billion, a growth of around 20% in total digital stakes in France and a stable recurring EBITDA margin of around 24%.So thank you very much for your attention and I am now ready to answer your questions.

[Operator]

[Operator Instructions] We have a first question from Jaafar Mestari from BNP Paribas.

[Jaafar Mestari, analyst]

I've just 2 on regulation for me. So trying to understand exactly the role of the Conseil d'Etat with regards to what the European Commission is doing. Do you think they're going to be running two completely separate conclusions? It just happens that Conseil d'Etat one to get the EC, I don't know these inputs or at least a starting point? Or is your expectation that the Conseil d'Etat will be a bit of a gatekeeper and actually either if they agree, enforce whatever the easy decides or if they disagree effectively challenge on behalf of the French state and an appeal? Just trying to understand if it's separate or really they're getting involved in the same investigation? And then, separately from the ANJ, every year, we get a few pushbacks on different things. Sometimes they push back on some of your product launches that you were planning and this time pushed back on your promotional strategy. You're reiterating the guidance stays, so clearly, you think you can absolutely meet budgets despite that.So I guess my question is more what would they need to say for you to have to change guidance? Are there things that the ANJ can push back on that would really derail the budgets, big game launches or big changes requires to the promotional strategy? Because every time there's a bit of a pushback, it seems to be very manageable so far for you.

[Pascal Chaffard, executive]

Okay, 2 quite important and not so easy questions. So the first question regarding the Conseil d'Etat. This is clearly 2 different challenges that have been raised in 2019 and beginning of 2020. The first one is the Conseil d'Etat. It was a challenge by various people of all the texts that have been put in place for the privatization of FDJ. We were not very worried about that because all those texts have been previously been submit, attempt by the Conseil d'Etat. It's not the same people inside the Conseil d'Etat, but still it's the Conseil d'Etat. And really, it's this decision that we have is a very good decision, because it is a good sign that all the framework that has been built for the privatization. As we explained to you, is really solid, is really well constructed. And it is not the same challenge that the one of the EU. The challenge of the EU was not on the monopoly itself, but more on the way of the calculation mode of the equalization payment.But at the end of the day, this is not linked. But this is a good sign and a good way to reinforce the fact that the monopoly is reconfirmed. The duration of the monopoly is reconfirmed and all that is compliant with EU rule. So it goes in the good direction, even if we cannot say that the 2 decisions would be linked. This is the second decision of the European Commission and that's exactly what the [Foreign Language] said, they said that they will let the European Commission have the decision on the level of the equalization payment.On your second question about the ANJ, yes, we had some pushbacks. But let's remind you that 85% of all our demand last year has been approved without any remarks. And the rest, in the 14% has been approved with some remarks that we took into account. And we had pushbacks which were on less than 1% of the old demand that the older proposition that we made to ANJ.So it's important to add this into in mind because if we don't have this in mind, we cannot understand. We are the only actor, the only operator that has to go to the ANJ to ask some approvals every month because each new games of FDJ have to be approved. So we go in front of the ANJ very often, more often than all our competitors. And yes, last year, end of 2021 more than last year; we had a pushback on one game. This year, it's a question on the public promotional on the advertising strategy. We have given to them a new version of this strategy. And we are waiting the ANJ to look at it and to have some results, some response, some answers to us.It's very difficult to say what would be -- I don't think that it's very hard to say what will be a very the 3 months detrimental to FDJ because we don't think about it like that. What we try to do is to propose to ANJ things that are compliant with the spirit of the regulation, which is to launch the games and to do things on the advertising, on advertisement, on the retail network, on digital that are totally compliant with the spirit of the law dispute. The law is to develop games but not develop addiction related to those games.So we are working on that in that -- in this direction. And we don't think that we are pushing things in front of ANJ that are going into the wrong direction. And we are totally committed to exploit games that are completely respectful for -- of the responsible gaming, et cetera, et cetera. So it's very hard to say what would be really detrimental if they -- because we don't think that we propose a thing that they would have to refuse and again 1% of all of what we proposed has been refused since now by the ANJ.

[Jaafar Mestari, analyst]

That's very clear. And just to wrap up completely that the cost of EBITDA, if I read it correctly is saying that they will have an opinion and they will issue an opinion on the EUR 380 million after the commission has they bear?

[Pascal Chaffard, executive]

Because it's a European matter.

[Jaafar Mestari, analyst]

Okay. So you can go too much to say find whatever the EC says.

[Pascal Chaffard, executive]

Yes. But if you read correctly what they have said before, they said a lot of things regarding the fact that we are compliant with the EU rules. So they cannot technically say that it would be foolish for them to speak before the EU Commission on this matter.

[Operator]

We have our next question from Kiranjot Grewal from Bank of America.

[Kiranjot Grewal, analyst]

Just a few questions from me. Could you offer some more clarity on timing, if you have got any update from the European Commission? Secondly, I think you've given -- unless I missed it, unless color on stakes within lotteries. Are you able to share more color of where draw games versus instant games? And lastly, what's driving that increase in number of players that you flagged as one of the key drivers for Q1.

[Pascal Chaffard, executive]

Okay. On the European Commission, I'm sorry, I will repeat the same thing that I said last time. They are not committed by a timing, specific timing. What we know is that for now a month, we don't have any new questions from the EU. It means that they should have all the elements to make their decision. Those types of decisions, we will see it coming. And as we have seen nothing coming, it means that it is and probable that we will have a decision by this summer. But we still hope that we will have a decision by the end of the year. And we will also try to read as we have no legal procedure to read them, but to come back to them to say where you are standing and when we will have a decision because it's -- we know that it is something detrimental for us to wait for this decision. But still, we don't have a precise timing of when they will take a decision on our case.Your second question was regarding the stakes on lottery. To give you some more color about that, as I said, stakes globally and lottery have grown by 6.4% this quarter. The growth is -- there is a growth on the 2 segments. I mean the draw games and the instant games, maybe a little bit more growth on the draw games and the instant games, because instant games, as I explained, we had a very strong comparison basis in 2022. Still, we have a mid-teen mid-single-digit growth on instant games, which is quite nice. So growth on both instant and draw games.And I'm sorry, but I think I've not taken your third question. If you can -- okay. The driver -- yes, the drivers are clearly advertisement and trying to turn players to digital. And we also use a lot the different events that we have organized to have a big -- to have events, high investment or events that we have organized.As I explained, we had a few natural high jackpots in the Q1 that we organized a big event around the Friday 13 and it is -- it has a lot of success with our customers. And also we organized for the second year in a row, what we call a million-fold, million in French, a million up hold. And it also drives a lot of customers to our offer.So it's both a question of right advertisement and also organizing events that will gather a lot of new customers to our offer. And when they have come to our offer, we try to keep them and to make them cross-sell on the draw games and instant games. What we have done quite well in the first quarter and we see that with the growth of instant games online that is in line with the growth of draw games online.And for example, for this millionaire of event, it's linked to EuroMillions, and there was something like out of 100, there was something like 24, 25 winnings, so millionaire in France. We try different things. EuroMillions is a huge number of, huge amounts of jackpots. And once a year, we organized this million rain or million and what is the correct translation. And it is plenty of people that will win EUR 1 million, which is a nice amount.

[Kiranjot Grewal, analyst]

Was the World Cup a big driver as well of the sports side of thing?

[Pascal Chaffard, executive]

Yes. Yes, sorry. For sport betting, nothing about the millionaire rain of all. For the sport betting, the major support of our new players' research was really the World Cup last year. And what we have done quite nicely in the Q1 is to keep the players that we have recruited during the World Cup in our offer on the fourth quarter. Yes. And also the World Cup is not the only very attractive event. We also have the European Championship, Football European Championship, which is also very attractive, League of Champions, Champions League, et cetera and the different championship, which are also very interesting events that that are good support to recruit new players.

[Operator]

We have our next question from Sabrina Blanc from Societe General.

[Sabrina Blanc, analyst]

Yes. I have 3 questions, if I may. The first one is somewhat linked and it's concerning again regulation. And when you said that you have to come every month to present your games to ANJ, it's perhaps a stupid question. But are you the only one to have to present games, if I understand correctly, because your competitors and the competitive part have mainly sports giving, so they don't have to present anything. The second question is regarding your strategy in terms of marketing. When are you expecting the answer of your new strategy? And are you still very confident on the impact? And the third one is coming back on the sports performance in Q1, just to understand what had explained being higher payout.

[Pascal Chaffard, executive]

Okay. On your first question, Sabrina, yes, what happens is when it comes to sport betting, really, you don't have new games, you have a new event on which you bet. But it's not new games. So the operators on sport betting or on poker have really the case to propose to ANJ a new game. In lottery, it works differently, because we launch every month new scratch card games, game. We launched 2 or 3x amount a new instant game online. And we launched once a year in average, a new draw game or a new version of a draw game. And this means that we have -- every new game has to be approved by the ANJ for us and for our competitors. But our competitors' does not have any new games to propose or maybe 1 per year and not one per month or more. This is the reason why it is different. It's not a different regulation. It's just a different business model of lottery compared to sport-betting, and betting or poker.On your second question, our marketing strategy, advertising strategy, there is a meeting on the ANJ monthly meeting, a [Foreign Language] it's called the college in French; I don't know the English word. And we know that there will be a -- in May, second part of May. And our case, our strategy should be looked at by ANJ at this college of May. So we should have by end of May, beginning of June, the answer of ANJ.On your third question, to talk to you a little bit more about the sport betting performance in Q1. We had quite important winnings on Q4 2022 during the World Cup, we explained that. And it happened that we also have an important winning in Q1 2023. Really, it's -- there is no clear explanation, the explanation. The best explanation is that the best teams have won more than we expected or the favorites -- the favorite team have won. And then if the favorite teams are winning quite often, it comes with important winning for the players.If we look at the last 4 years, it was the case in 2019. We have the same profile in Q1. It was the case also in 2021 and it was not the case in 2020 and in 2022. So when we compare our activity to 2022, there is a quite high difference. But as I explained, by mid-April, we are back to a normal level of player winning on sports betting.So it can change quite rapidly. So it's not a good thing to look at the sport betting just on one quarter. We should look at it on several quarters. And what is the good thing about that is that all the players that we have recruited during the World Cup have continued to play in Q1. They have won quite a lot. So they are motivated to continue to play. This has driven a very good level of activity of sport betting.And we think that it is a good thing for the level of activity that we will have in Q2, Q3 because it will drive the growth for the next -- for the next quarters. Last year, we have faced a very different situation where the players have lost a lot. And they were quite no more motivated to continue to play as they have lost too much. We are facing a different situation. That is why I said on my speech that we prefer really to be in the situation of this year. And again, by mid-April, the level of player payouts will again at an average level.

[Operator]

We have Matt Spiegelman from Locust Wood.

[Matthew Spiegelman, analyst]

I was just wondering if you could share any of your observations on the cost side in terms of inflation in the various categories that you see and what you've seen so far year-to-date?

[Pascal Chaffard, executive]

Okay. Yes, we said on the cost side that we have faced inflation this year. We explained that we have something like a 5% inflation on our cost base. But hopefully, our cost base is not submitted to inflation at 100%. It's around half of our cost base that is subject to inflation. The rest of our cost base is a commission that we paid to the retailers. It is calculated on the basis of a percentage of the stakes. So it is not touched by inflation. On this -- on the part that is touched by inflation, the major point that we have to face is the instant tickets, because we have to face the cost of paper that have -- that has risen very hard, because of transport and the cost of the salaries of the people that are printing those tickets in North America.But all that is under control, because we have signed a contract for the whole year 2023. So no surprise between the moment when we disclosed our guidance and now it's just like we thought it would be. Another topic is transport. But also, we have some contracts that we have hedged over year 2023, so no surprise, energy, no surprise.We know what we are facing because we have also hedged all that or what is done into our point of sales people that are doing the maintenance of point of sales. In the same way, we have renegotiated those contracts. And we know exactly what will be the price for the whole year 2023, so no bad surprises.And the other point that we have faced is salary cost. And salary cost, we have find the level of winnings -- the increase of salary cost. And it is exactly in the range that we have forecasted within our guidance. And the last but not least, element, maybe the more important is the cost of the contractors, IT costs. And this is quite challenging. It is quite heavy. The growth is quite heavy, but still, it is manageable within our guidance. But it's maybe a little more important that we have -- that we have initially estimated but still, again, it is manageable within our guidance.

[Operator]

We have [indiscernible].

[Unknown Analyst]

So the ANJ objected the promotional plan back in February, and now we're tracing mid-April. So maybe could you tell us maybe in terms of your advertising and your marketing, what can you and cannot do? And can that eventually result into cost savings that you had probably not anticipated given Q1 performance and normalization in Q2? And how important is that promotional plan for the new games, most would be the ones coming towards the end of the year.

[Pascal Chaffard, executive]

Okay. On the -- if I go back to the time frame of this promotional strategy, we presented this strategy in January to the ANJ. They said in February that it was not okay. We had seen that 1 month to represent a new version of this strategy that we did, I think, by the 22nd of March. And then we are in the process of when the ANJ analyzing this new strategy to answer to FDJ. And this answer should be given by, like I said before, by the end of May, something like that. So it's quite a long process.But what is interesting is that for the all timing when we don't have any promotional strategy validated, we are still under the rule of the strategy of last year 2022. That was in volume higher than the one that we issued in 2023. So it is -- we don't have any constraints in our day-to-day business by the fact that our strategy is not yet validated.It is a little bit curious, but it's like that. What we have done, we have proposed to ANJ to reduce a certain number of operations and the volume of certain operations. And what we have done is to figure out what was the less detrimental for us in terms of value to have the less impact on business.And we think that the impact on business will be negligible because it forced us to rethink about what are the best levels of promotion and advertisement. Also, what ANJ wanted from us is to change some -- the way we do this business. It's not only a question of numbers. But also a question of media used way to express our promotion. And we have -- we will and we have already adopted that with also no detriment, no detrimental impact on our business.And the promotion and advertisement is important for -- in our business. It is very important for draw games. And what we explained to ANJ, but they don't say that it's not okay is that we have to mediatize to make the people know the level of the jackpots. This is the main thing. When it comes to draw games -- sorry, to scratch cards, the advertisement is really less important as it is more like a suite.You buy those scratch cards because you see them in a point of sale because you see them when you are connected to the FDJ website or FDJ App, but it's less important to advertise it on large mid-year. Sports betting advertisement is important for sports betting also because it's a more competitive business. And we have to make all the people know what are our hubs and what we propose on this or that event.But at the end of the day, our advertisement is when we compare it to the state; it's something like on average, something like 0.5% of stake. If you look at the figures in 1 year figures, it's something like EUR 200 million. And our level of tax is more than EUR 20 billion.What is also maybe the last thing very important that is not in the promotional strategy is the visibility that we have with our 30,000 point of sales, very important because 10 million French people are seeing our products are facing our shops every week. And this is very powerful. And this is not linked to the strategy to the promotional strategy. We are -- even if we would have 0 advertisement; we still will have the visibility of this 3000 point of sales. And as we have understood, this has been a very important thing in Italy, when advertisement has been banned.Again, it's not the case in France. And it's -- even the ANJ is not willing to bad advertisement. But just to take an example, in Italy, the incumbent, the people with a larger number of point-of-sale did not see any impact on the sales by the advertising ban because they have a large visibility for a lot of people, thanks to the point of sales.

[Unknown Analyst]

As a follow-up, maybe, is it fair to assume that you might be able to have some savings on that -- on the advertising line?

[Pascal Chaffard, executive]

Yes. It's fair to think about that. And it's fair also to say that it will help us to offset the inflation cost that we took on some minutes ago.

[Operator]

We have our last question from Alexandre Gerard from CIC.

[Alexandre Gérard, analyst]

Yes. Pascal, I have a very general question regarding your current corporate development opportunities. Firstly, can you update us on the acquisition of Lottomatica and maybe remind us what would be the maximum earnout that you might have to pay on that acquisition that depends on the performance of the company in 2023. Secondly, I mean opportunities of this kind for growth? Or I mean are you studying currently any investment opportunities of this kind. And for example, Lottomatica is coming back on the market, the Apollo; the PE firm is selling out. Have you listed that company and purely, organically, the Dutch National entry was a program, if I remember well, where are we on that side? And are there any other opportunities on this kind for you in Europe at the moment?

[Pascal Chaffard, executive]

So to begin with the turf, I think we did not disclose precisely the level of earnout, but it is not a very important amount. It's some percentage. It's a small percentage of the total price that we disclosed. We disclosed the EUR 175 million. And you can figure out a small percentage of this amount. It will not change a lot the case about that. About your other question, yes, we have seen that Lottomatica has been is in the process of being sold by its shareholder. We understood that it will -- they will try to make an IPO. But we know that if somebody is asking for them to bid something, it would be possible.Lottomatica, maybe to remind what it is, it is quite different from FDJ. As -- a few years ago, Lottomatica was also the Italian lottery, but now it's the IGT lottery. And what remains under the name of Lottomatica is the result of the merger between Lottomatica and GameNet. And it is mostly an activity; I would call it point of sale casinos.It's like a very small casinos' with VLTs AWPs and sport betting on point of sale. It's quite different from the FDJ model. So I don't directly answer your question. But I give you a clue saying that it's quite different from the FDJ model.About the Dutch National Lottery, we have seen as everyone that there is a project within Netherlands to privatize the Dutch National Lottery. And we understood that the time frame of this privatization is not completely set, because I don't think that there is a decision of the government of the parliament to go to this process, but the proposition from the government to think about it.So maybe I don't think this would be a project that would occur in 2023, but maybe in 2024, depending on the political decisions in Netherlands. Is there other case like that in Europe? Yes, there are other cases like that and there will be in the future.And we said that we could be interested by those types of development of other B2C lotteries in Europe. And if there are some cases, we will have a look at them very precisely, but I cannot say more today. But yes, it is matching what we said during our Investor Day when we talked about our potential international growth opportunities.

[Operator]

There is no further questions in the queue. I hand over to Mr. Pascal Chaffard to conclude this conference. Thank you.

[Pascal Chaffard, executive]

So thank you very much for all your questions and your attention. And now you are all invited if you are shareholders to attend our general assembly. And if it's not the case, I will be pleased to welcome you for our H1 results end of July. Since then, I hope you will keep well and also that the business will be also good as it is in this first quarter. So thank you very much, and have a good evening.

[Operator]

Thank you.