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Welcome to the AAK Q1 2023 Report Presentation. [Operator Instructions]Now I will hand the conference over to the speakers: CEO, Johan Westman; and CFO, Tomas Bergendahl. Please go ahead.
Good morning, everyone, and welcome to the AAK Quarter 1 Earnings Call. In today's presentation, as you heard, it will be myself and our CFO, Tomas. And the agenda for today, you have on Page 2. We'll start with a few highlights on the quarter, some key events and update on the business and financials as well as our concluding remarks. And as always, we are happy to take any questions that you have after this presentation.So with no further ado, we're moving into Page 3, some overall comments on the quarter. As communicated earlier, in our early profit release, we had a strong start to the year. A strong quarter with regards to our operating profit, up 43% at fixed FX -- sorry, 34% at fixed FX, reported 43%, as well as a very strong development on our margins. Our operating profit per kilo is up significantly in the quarter, up 43% year-on-year at fixed FX.While profits were strong, our volumes were down by 6%, but this was mainly due to our controlled exit out of Russia. And in addition, our continued focus on optimizing different segments where we operate and particularly in the bakery industry, we continue with our optimization program, and we have closed the plants in Europe, consolidated volumes into 2 other factories, but also left low-margin business behind. So when looking at that, there is no real drama on the volume decline year-on-year.And we can also, when we compare the results, see that in this and in a year-on-year perspective, our strong improvement of earnings is really due to a continued focus on our specialty solutions. It is also a, call it, favorable market condition versus last year, where inflation started to come, obviously, starting to compensate for that, but not fully. So in a year-on-year perspective, there's also an element of more favorable market conditions or us being able to compensate fully for that. So all in all, a good development in a combination of focus on specialty solutions, improvements internally, productivity optimization as well as favorable market conditions.On top of that, which we now released in our report this morning, we have had a strong operating cash flow which is now north of SEK1 billion positive in the quarter, and this is really linked to better earnings, better EBITDA as well as good development on our net working capital. So all in all, a positive also impact on return on capital employed as well as our net debt to EBITDA being decreased back to 1.36.So with those overall comments, let's move into Page #4. We're also proud to announce and certainly linked to our strategy going forward, we need to be focusing as well as releasing new products into the market, more value-added solutions. And a good example of that is our new product, CEBES Choco 15, with an attempt to improve product for the consumer, for our customers, while at the same time, offering a, call it, value-added solution, which is affordable. So value for money creation for the end consumer.We've also made strong improvements on our sustainability journey from plant to brand. We have released our sustainability report. I strongly recommend you to read that, and we make progress in many areas and remain focused on delivering on our targets linked to science based target initiatives as well as our deforestation-free targets in our supply chain.We've also opened up our plant-based innovation center of excellence in the Netherlands. This innovation center marks a new step for AAK. We will be able to really take our customers in and, together with them, develop new solutions in a lab setting, an application setting, a tasting setting as well as a culinary kitchen to really showcase the possibilities of future food solutions that are more sustainable, more functional, tasty and with a good performance. So that's a good step forward that we will now start to capitalize on.With those comments, we move into Page 5 and some deep dives into the respective business areas, starting with Food Ingredients. Pretty much the same momentum as in AAK as a whole for the quarter. So a strong momentum continuing from last year, margin expansion and that leading into an absolute increase of operating profits. Operating profit is up 48% versus last year at fixed FX, and operating profit per kilo is up 59% versus last year despite volumes being down. But again, part of volumes being down linked to exiting out of Russia, part of volumes being down due to the optimization of Bakery. But in the rest of the segments, we see this positive mix of internal productivity improvements as well as being more capable of compensating for inflationary effects. So all in all, a strong development for Food Ingredients.If we then move into Chocolate & Confectionery Fats on Page 6. Here, we see a somewhat larger volume drop, but that is also linked to Russia because Russia is and was, for us, a large chocolate and confectionery fats market. So volumes down 9% year-on-year, but again, mostly driven by the exit out of Russia. On the other hand, we continue to see strong momentum in our business with strong improvement of margins, operating profit per kilo, up 29% at fixed FX, and that leads us to a total operating profit being up by 16% year-on-year despite the exit out of Russia.With that, we're moving into the third business area for AAK, Technical Products & Feed. And here, we can see that we have had a strong momentum for many quarters in a row and this continued into the first quarter of 2023. So operating profit up, operating profit per kilo up, and this is mostly driven by a good development within our Feed business as well as a continued good demand for natural ingredients to replace mineral oils, fossil-based ingredients in other non-food segments where we deliver. So operating profit up 33% and operating profit per kilo up 26% versus last year.With those comments by business area, I am happy to hand it over to Tomas, our CFO, for some further comments on raw materials and the financials of AAK.
Thank you, Johan, and good morning, everyone. Continuing on Slide 8. Raw material prices, as we've mentioned before and as you've seen, has, since the decline began by mid last year, leveled out at roughly half of the peak that we saw in Q2 in '22. The current price level is still significantly above pre-pandemic levels, as you can also see. And a quick reminder that changes in the raw material prices have a large impact on working capital and our capital employed. And as you can see on the slide, the 10% change at current price levels is estimated, all else equal, to have a plus/minus SEK500 million impact on working capital and an estimated time lag of roughly 6 to 9 months. There is some uncertainty of the time lag, given the mix of raw materials and the 10% impact value change has been adjusted as the new raw material prices have -- or as raw material prices have declined lately.Turning to Slide 9. And as you might recall from the last quarter, Q4, we had a solid cash flow driven by a strong finish to the year. And when we look at Q1, we can see that the underlying positive trend continued. The quarter generated a positive operating cash flow, as Johan mentioned, of SEK1.1 billion at par with the Q4 cash flow, driven by strong EBITDA as well as a reduction in working capital of roughly SEK400 million. And as expected, lower raw material prices as well as improved inventory management had a positive effect on inventories and the cash flow for the quarter. The positive effect from inventories was somewhat subdued by lower accounts payables, as you can see, which declined faster than inventories due to existing shorter account payable terms relative to account receivables terms, mainly related to procurement of raw materials, meaning that there is a timing effect in Q1 in how raw material price impacts payables versus inventories and then subsequently receivables. The cash effect from accounts receivables was slightly positive, as you can see, but just slightly.Interest costs increased quarter-over-quarter compared to last year, mainly driven by higher interest rates as well as a slightly higher net debt and additional committed facilities compared to a year ago. And the average tax rate remained unchanged at 24%. CapEx totaled SEK362 million and was related to production improvements, such as debottlenecking, capacity optimization and the continued construction of the biomass boilers we are putting in place in Aarhus, Denmark, as well as our recent acquisition in India.Other noncash items had a negative cash flow effect of SEK246 million, and this was mainly driven by unrealized hedging contracts on raw materials. And during the quarter, the valuation of unrealized hedging contracts had a positive impact on EBITDA, but this was offset by a negative effect from realized hedging contracts and inventory revaluation as a result of our back-to-back hedging model. This resulted in a net P&L impact that was roughly neutral between these items, and that's the intent of our hedging model as well. The realized hedging contracts are cash and included in the free cash flow. The unrealized hedging contracts, on the other hand, does not have a cash flow effect and is therefore adjusted for in the item, other noncash items.Next slide, please, Slide 10. Return on capital employed reached 15.2% in the quarter, driven by improved profitability and up from 14.5% at the end of last year and close to the last peak, we've had 15.6% at the end of 2021.Slide 11, please. And then finally, net debt EBITDA ratio was reduced further in the quarter, ending at 1.36, down from the peak of 2.03 in mid-2022, and in all respects, substantially back at the level we saw before the impact of increased raw material prices.
Johan, back to you. Thank you, Tomas. So when summarizing that quarter and to wrap up this presentation, I think there's no doubt that this is a positive quarter. Strong improvement of absolute earnings, strong improvements of margins as well as a strong cash flow. So really good to see that. But more importantly, I see this quarter, together with the development we've seen over the last 1.5 year, it's a good milestone in a way or a confirmation of our journey towards our 2030 aspiration. We have set out to double our margin in terms of EBIT per kilo, while at the same time growing, growing faster than the market and making increasingly positive impact. And while volumes were slightly reduced, but for reasons that we well know, some positive tailwinds, there is also very, very strong development internally, both in terms of optimization as well as a continued focus on really delivering high value-added specialty ingredients.So when looking ahead, we feel very confident with our strategy, with our 2030 aspiration and that's the key going forward. So all in all, we remain prudently optimistic also about the short to midterm, but fully geared towards the 2030 aspiration and making sure that we, in everything that we do in our organization, keep that in mind as we execute on our strategy.With that, we are happy to take any questions on the quarter or our view on the long-term [ race ].
[Operator Instructions] The next question comes from Alexander Jones from Bank of America.
Just on really the profitability this quarter. Johan, you talked about some of the profit growth being driven by your ability to catch up on cost inflation, that you were able to price through quickly enough in Q1 last year. Are you able to put any numbers to how much of the profit growth this quarter was driven by that effect rather than by the focus on specialty solutions or productivity improvements? And then second question, was there any element on the level of profits this quarter that's driven by a temporary benefit from raw materials decreasing that may then fade in the coming quarters and lead the absolute level of profitability to dip slightly as raw materials stabilize?
Thank you. Thank you so much for your questions. And first, it's difficult to make a sharp line what is really catch-up versus what is strong execution in our pricing in the market and so forth, but they are certainly linked. So I'll try to give you as [ simple ] of an answer as possible. When we compare year-on-year as we do in these quarterly results, there is an obvious -- there's been quite some dynamics in our industry like many others, rapid inflation, raw materials as well as energy as well as other input costs as well as the disturbances in supply chain and later the invasion of Russia into Ukraine, et cetera. So many elements impacting, of course, business dynamics. You've seen AAK being strong in executing, strong in managing, call it, uncertainty and dynamics. What we refer to, as you call it, catch-up or ability to compensate is that it's -- even though we try to be ahead of the game always, I think it's fair to say that while a lot of things, if not everything, was kind of moving, there is, in some contracts, a bit of a lag effect. In some areas we had to really do our own homework and analysis and make sure we push things through. And we have done that in a good way. So just looking at quarter-to-quarter, I think it's fair to say that part of this is, call it, catching up or now making sure that every contract does include the fair cost valuation before pricing.And then linked to -- so how much is then potentially a positive link to raw material prices falling down and we sitting on contracts, just like we explained I think some time ago, when we sat with longer contracts in China, for example, which we couldn't fully compensate for when raw materials came up. I mean same thing here, we sit with contracts and then raw material prices fall down. In most part of the business, we are back-to-back hedged. There's not a big impact, but of course, there is a slight impact of that. But I think it's more important to say that we are now more, across the board, covered as we should be, and we've priced it according to market conditions as well as our own ability to operate.So difficult to say how much is risk of fading down, but I think it's fair to say that also a fair chunk is structural improvement by us, one, on pricing or compensating and two, on a continued focus on the specialties as well as our internal productivity. We have spoken about our efforts on debottlenecking, about the optimization in Bakery. Everything plays in here, but we do not give specific numbers on every line item, but that's the mix as we see.
Great. Maybe if I can just follow up to bring that together then, would it be fair to say you would expect that this can be a new level of profitability then that you can grow beyond sort of 10% algorithm off going forward?
I fully understand your question. And I think -- but let's be also humble to say, I mean, in any journey towards, in our case, our aspiration, which is clearly targeting higher margins, it's always going to be a bit of a curve around a direction of travel. So I would be careful saying, yes, this is now the next level, it will only go up from this. There will be better quarters, there will be worst quarters, but we are very confident in the direction of travel, which is towards our aspiration of doubling our margin. And that's where we will continue to focus, and we will come back to that in many calls ahead. So careful to kind of draw a firm line, this is the new floor when we just delivered a very, very strong result. But it's certainly a confirmation of the direction of travel.
The next question comes from Oskar Lindstrom from Danske Bank.
Two questions from me. The first one is on the negative volume growth. I mean, as you pointed out, the majority of it is driven by the choice to exit from Russia and a fair chunk also from your own measures to optimize the portfolio. Is any of it, and if so, how much driven by weaker underlying demand? And do you see any such weaker underlying demand sort of having a larger effect now later this year? So that's my first question. Should I go ahead and ask the second question as well?
That's okay, we can take this one, if you like. So you certainly listened in, which is great. So I don't need to repeat but I'll do it anyway, like, first, yes, exiting Russia, second, our own measures. But then there is a market impact. So when we look at data on the different industries that we serve, we see that there is a low single-digit or 1% to 3% decline in volumes in general. And that, I think, one could defer to as a general pressure in the total market, higher interest rates, inflation, consumers are a bit more careful. So the underlying market has also reduced a bit. If you look at that, there is no drama in the AAK numbers more or less following market.On the other hand, I think it's worth reminding us about AAKs position. We deliver specialty ingredients. We deliver plant-based ingredients that in such, we often replace animal-based ingredients. And at the moment, I'm not talking just about the plant-based alternatives to meat and dairy, but the use of plant-based ingredients instead of, call it, animal-derived ingredients. And that is often due to functionality and price. Same thing in Chocolate & Confectionery Fats, where we have our offerings of ingredients that could replace cocoa butter for cost saving and functionality improvement for our customers. So that's why while we are confident when looking ahead as well as we can look in the mirror, we have often delivered in both upturn and downturn.And I think that has a strong link to our broad portfolio, which often offers a cost performance opportunity for our customers. So even in a setting like this, when there is cost pressure from consumers and society, we have solutions that can help our customers also reformulate towards a more affordable product. So -- while at the same time, in our other segments where we have a high value-added solution with a high price, there is a risk that, that becomes a bit pressured, but a good balance in our portfolio.
If I may, just a follow-up on that, are you seeing any destocking impacts on your volumes in the quarters ahead?
I thought you were going to ask do we see any destocking in the quarter and the recent quarters, but you asked ahead. So let me answer it this way. We have certainly seen, and we know from dialogues with customers that there has been elements of destocking while the destocking in our industry and where we supply hasn't been big like in other industries, where it's been very visible. But there has been some destocking linked to what I believe is a general uncertainty, our customers having a bit more on stock and buying in advance. Like candles is an example of that as well. So -- and then as we're now hopefully entering into a slightly more stable business environment, you see elements of destocking. But we -- I would say we've already seen that, and it's already part in these market numbers that we just talked about. So I couldn't say that we see a major risk of destocking ahead, but I also don't have the exact stock values of every item that we sell to our customers. So there could be something, but I don't think there's any drama compared to some other industries.
And I think, as Johan said, our view on the transparency into our customers' stock levels are not -- it's not fully transparent. But I would say it's been in certain segments. We've seen some of it, but as Johan mentioned, in candles, but it's not an overall driver over the last couple of quarters, I would say, a feeling of destocking. That's not what we've seen, no.
Right. And then my second question is probably to you then, Tomas. When you talked about the working capital, you said that your payables were impacted before your receivables by lower raw material costs, if I understood you correctly. Is that effect then going to get -- to reverse in Q2? Or is it going to get more negative first?
I think the timing of this, and as I've said before, the model we have is not a perfect one, right? But I think what we've seen now is, given the disparity between our existing terms in accounts payable, primarily driven by raw material procurement contracts and then what we have in our accounts receivable within the [ story ] in between, I think the effect on accounts receivable, and we saw that too, it took place much faster and earlier, and then you see the effect on inventory, which you do, but we expect that to continue to some extent and receivables are fairly flat in the quarter. So the effect takes a little bit longer to get to that section of net working capital. So I would say that, as we've stated before, we expect to see continued positive cash flows in the year, but the timing of it is a bit uncertain. That's where I would leave it going forward, I would say.
The next question comes from Joan Lim from BNP Paribas Exane.
I have 2 questions, so I'll start with the first question first. In terms of the strong operating profit and then the optimization that you have been referencing, how much further is there to go because, for example, the optimization has been ongoing for the past 2 years, right? So it would be interesting to know how much more you think there is to go on this. That's my first question.
Yes. Thank you. Yes, we are certainly not done with optimizing. We have ongoing activities and efforts, the most significant we have chosen to highlight, which is in Bakery where it includes a factory closedown as well. But the -- but there are optimization activities ongoing in our other parts of the business as well as we have commented before, and that is everything from operational improvement, operational excellence activities across the globe, debottlenecking versus investing in capacity for higher volumes or rather work with the assets we have to free up capacity and grow with that. And that has had a positive impact across the board, not only in Bakery, and we think there is more to give. I think in Bakery, we're probably closer to having done a fair chunk of that.But on the other hand, we see opportunities in the other industries where we're -- or rather factory by factory in AAK, and that's part of our strategic plan going forward. It's actually part of the journey towards our 2030 aspiration. So to deliver on our doubling of margin, it is, one, selling higher-margin type of products, but also making sure that we are improving our cost base and productivity, so in essence, lowering the cost per kilo as well. And there, we see a continued opportunity. So yes, we have more to give, but one should be humble to look at this sequentially quarter-by-quarter. This was a strong move forward and a very good step forward, but we should see this in the long run, but we're very confident on that journey.
And my second question is on your guidance. So you say you remain prudently optimistic. But given the strong start of the year, why do you still remain prudently optimistic? Do you not expect the growth drivers to continue?
That's a fair challenge or question, I guess. We -- I think it's fair to say -- I think it's always, in business and certainly in times of uncertainty, choose the word prudently or very optimistic, but I think it's fair to say we had a very strong quarter in a year-on-year perspective. We have delivered sequentially improvements quarter-by-quarter, and we remain committed to our strategy, committed to the aspiration, as I mentioned a couple of times, but I think we have all seen dynamics in businesses. There will -- there's never a straight line forward. There's always going to be a curve, a bit up, a bit down, a bit worse, a bit better. So I think the best word we have for it is being prudently optimistic and focusing on the value drivers, which is linked to our product development, our focus on specialty solutions, working with our product portfolio.And we have a financial target of 10% EBIT growth year-on-year. And this quarter is much higher. We have had quarters in the past which were lower. There will certainly be quarters in the future that will be lower in a year-on-year perspective. So I don't think it makes sense to kind of dissect it more than that. We are confident on the journey. It's a very strong quarter, and there will be -- maybe not a bumpy road, but there will be ups and downs on our journey going forward. So I don't think we need to kind of change the wording there. We're prudently optimistic. We have good opportunities, and we're well positioned to take advantage of growth opportunities going forward.
Okay. If I can squeeze in one more question, and just quickly on the EU Deforestation. As you had a line saying that you have raised concerns on the new regulation, are you able to quantify the impact of any additional administrative burdens required to comply with this new regulation?
The short answer is no because this is -- it's not given exactly how it will be implemented, it's not given exactly where we will land, and it becomes a bit -- it will only give a wrong interpretation of the future because any up-cost will then lead to either increased, call it, raw material prices that will be forwarded into the formulations for our customers at the end of the day, to be paid by consumers, if that would be an up-cost. But at the same time, we also work with supply development in enabling us to prove what is needed for the EU to allow the volumes to flow in. So there's a lot of work that is going to be between now and the implementation. And even if early days, there will be some up-cost in the longer run, we will continue to develop the supply chain so the demand and the ask from an EU perspective is not an unreasonable demand and ask. And we are very positive because we also fight deforestation. We have asked for more policymaking coming into play. So in that part, we're very positive to that.The concern we're raising is what we think will be the case now, and that is that the EU is demanding proof points that are, call it, negative from an efficiency point of view. And I think it's a long answer, but I'll try to make it short. So if we, by a satellite photo, can prove that there's no deforestation, that makes us still efficient to collect crops for our suppliers and to process this with us having to separate certain flows. But if then the EU is demanding geolocations on certain very small plot of land, then all of a sudden, you trigger the industry to have segregated flow, storing fruit bunches, raw materials in segregated silos, containers and then have batch runs that you segregate and store in different tanks and the same thing on the transportation of ships and then on and on and on, right? So it becomes an inefficient way just because EU decides that, that's the proof level they would demand, but it's not necessarily leading to any less deforestation.I think it's [ risk leading ] to EU or countries in EU, customers in EU reformulating to other products, which we can help with and/or buying at an up-cost versus the rest of the world. So that's where we have raised our concerns and we will continue to work with EU to find, hopefully, a better balance for how to prove it. But at the same time, it's certainly possible. And we are very positive to policymakers helping us and the industry to move towards zero deforestation.
The next question comes from Alex Sloane from Barclays.
I've got a couple, please. Just on the first one, going back to the comments around back-to-back hedging. Johan, I think you said the majority was back-to-back hedged, but there were some longer-term contracts where obviously, you have more variability on the input cost trends. I wondered if you could quantify where we are on that now, maybe both in the quarter, one that's just gone and for the rest of the year in terms of what is back-to-back hedged versus what's longer term, where there's more variability. And then just secondly, thanks for the color just there on the EU Deforestation Regulation. I wondered if you could quantify within the TP&F division, how much of that division relates to palm oil derivatives that are sold in the EU and if there's any risk to that business based on the proposed legislation.
Thank you. First one being, I think it's -- I think we have seen most of, call it, the variability in this quarter. So -- but again -- so from a step function point of view, I think we're seeing a lot of that, given [Technical Difficulty]. So I don't expect it to be another bump-up, if you will, but there's still going to be variability, so both up and down going forward. With regards to the EU Deforestation, I think it's -- I think we want to be very clear to say that this is a change in legislation, this is a change in policymaking. We have to deal with that like we have done with others. So this means that there is going to be opportunity, opportunity for reformulations where AAK is very strong. There's going to be risks, as you've alluded to, on certain raw material supply that will be at risk, call it, but where we would then put actions into sourcing it in a way that is fully compliant and/or reformulating ourselves to offer the same product with a new solution and/or doing that together with our customers. So therefore, it's key at the moment to not see it as a negative. We are quite positive on the change, but we are concerned with the way they are embarking on, call it, proving this or asking the industry to prove it in a very inefficient manner.And then to TPF, yes, TPF does source secondary fractions or waste streams, which is in itself a very positive sustainability play. But if the EU legislation is then putting a damper on how you can source this or -- there's a lot of background, so can you maybe mute? There's a possibility to mute maybe or. So -- thank you. So while the whole business around Technical Products & Feed has a very strong sustainability play, there is a risk that some of the sourcing will be more difficult to get if it's difficult to prove according to the EU regulation. But on the other hand, we will then find other alternatives and make reformulations and new offerings. And we're already working on that as a continuous plan. So yes, is there a risk of some of the material source being more difficult? Yes, it is. But on the other hand, is there an opportunity to find alternatives? Yes. And will it lead to potentially other business opportunities when formulators and customers linked to other raw materials also being impacted by this legislation coming to AAK for help, and that's where we are very strong. So again, it's a mixed bag. It's very early days, but we are on top of it.
[Operator Instructions] The next question comes from Simen Aas from DNB Markets.
So I have 2 questions. The first one is on working capital. So is it -- it was still high in the quarter at SEK10.5 billion. And I also noticed that this impacted your interest cost in the quarter. So should we expect this effect to become smaller through the year as your working capital normalize? Or how should we think about this? So that's my first question. And then my second question is, could you give us an update on India? How it's been progressing here?
Tomas, will you go first?
Thank you. As regards to working capital, as you can see also in the underlying development of working capital in the quarter, the inventory came down quite substantially and then is offset by the quick reduction in payables as well. And as I mentioned before, I think the payables will, due to the existing terms that we have, the impact there is faster than what you see in inventories and then subsequently in receivables. So that development will continue. As it then relates to interest payments, of course, we will always try to optimize our net working capital. And then, of course, that's also very much dependent upon where the interest rates continue to go, of course.
But everything else equal, obviously, with a lower net debt, interest rates will go down over time. But depending on how it moves and if it stays as it is now, then we expect it to go down over time.
And as we've said then, we expect the cash flow to continue to be positive throughout the year. We're not done net working capital-wise, that's not what we see yet. So, yes, and you will see a positive impact.
And then with regards to new efforts in India in Kakinada, we have taken over that now. No news in terms of any negative or kind of [ less expected ] takeover. We are ramping up the plant, good trials. I just had actually a status report yesterday from the team. So very good development so far, but it's still very early days. But our testing of equipment and so forth has turned out positive. So we are kind of turning up the plant. And then we -- as you know, from the press release, we're also going to invest, make the plant even better and enable us to serve customers with our full portfolio, but we're already now up and running with the assets that stand there when we took over.
There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.
Thank you. Thank you all for listening in. Again, a very strong quarter year-on-year, also sequentially. We are focused on the items that we see and the good underlying trend, which is really a confirmation of our journey -- on our journey towards our 2030 aspiration. So while we are somewhat helped by positive tailwind and now compensating fully for inflationary items, it's also a strong contribution from internal improvements, optimization, a continued focus on our specialty journey. We are a multi-oil ingredient house focused on plant-based oils and fats, and we see opportunities within food as well as within nonfood solutions replacing mineral oils and fossil-based ingredients. So when we sum all of that up, this was a good milestone. There will be a journey ahead and there will be better quarters, worst quarters, but certainly a good step ahead towards our 2030 aspiration.So I think with that, we will leave it. Thank you.