Boozt AB

STO:BOOZT

Earnings Call Transcript 2018-Q3

[Operator]

Ladies and gentlemen, welcome to the Boozt Q3 2018 Report Call. Today, I'm pleased to present CEO, Hermann Haraldsson; and CFO, Allan Junge-Jensen. [Operator Instructions]Hermann, please begin.

[Hermann Haraldsson, Chief Executive Officer]

Okay, thank you. Good morning all, and welcome to our Q3 '18 call. Let's just dive into it and go to the first slide, key highlights for the quarter. As we said on our last call, Q3 started quite challenging with the warm weather, consumers holding back. So having that in mind, we are quite pleased that we have this very strong winter still, growing 37%, and also with our key performance indicators being quite good, in line with expectations. The growth was supported by Boozt with the growth of 32% and especially by Booztlet, which grew 197%. So they really, really took off in this quarter. Our adjusted EBIT margin was negative 4%, down versus last year. It was partly driven by the pressure on gross margin, as expected, and this pressure was partly offset by the improvement in our operational cost ratios. But it was especially dragged down by the physical stores where we had our store in Copenhagen, which performed very poorly in the quarter and had an impact of minus 1 percentage point in the quarter.So if you disregard that, then our EBIT was close to last year's EBIT. We are, of course, working on the shop in Copenhagen and doing what it takes to get that in line, but it's kind of a contained problem, and it will definitely not go larger. If we look at the outlook for the year, we maintained the growth of more than 36% due to the larger losses than expected in the offline Beauty store. And also, we see that there is a pressure in gross margin also going into Q4. We adjust our EBIT margin to a range of 1.5% to 2%.So that was the first slide. If we go to the next slide, the most important KPI is customer satisfaction. We can see that the customers are quite happy. We maintained a high Trustpilot score of 9.2, up versus last year, and especially the Net Promoter Score at 73, which is world-class. This tells us that our customers still are very happy. They come back. And as you know, we are very much focused on attracting new customers, and we can see that they behave like the old customers. And if they have a good customer experience at the first purchase, they will come back, and they do. So that's very good.If we go to the next slide on the order development. In the quarter, we increased the number of orders by 29%, with the average order value more or less on par versus last year. If you take the currency into consideration, then there would be a slight drop in average order value, which is actually quite good because the product mix was influenced by the high amount of spring/summer items that was sold quite long into the quarter. And full year, we are up 30% on number of orders and 4% on market size. So that is looking quite good still. If you go to the next slide, which is the cohort development. We can see that over the last 12 months, we've increased the number of active customers by 29%. The number of orders per active customers is up. And also, one of our most important KPIs, the true frequency, is up. So this is still telling us that customers, they are coming back, and we are still getting a higher share of their wallets. Going to the next slide, I just wanted to highlight that we launched adidas. It was quite late into the quarter, but still we had a quite successful launch. And a good indicator of kind of the potential in this corporation is that when we launched in week 38, they were ranked as the 22nd biggest brand on Boozt. Within 4 weeks, they went into a spot of #9. So even though we don't have the full adidas collection yet, it won't be live until Q1, they are becoming one of our best brands. And of course, we celebrated with the adidas team, and the launch actually went exactly as we had hoped. Going to the next slide. Automation, we completed the Phase 2, the last part of Phase 2 earlier this month. This means that we now have 250 robots driving on top of grids with 250,000 bins. It was very important for us to be ready before this Black Friday weekend so that we can make sure that it becomes as successful as last year where we were able to get all our goods out with the customers by Tuesday, at the latest. That was quite good. With the growth that we're having, we are going according to the plan and also with our expansion, so we expect to initiate Phase 3 of the AutoStore in the first half of next year. And then going to my final slide, the next slide, I think this is a quite important slide, is that even though the physical store is annoying, we still have to focus on the fundamentals, and they are still very, very good. We can see that we have an increase in site visits, although consumer demand has been soft in the quarter, for many reasons. We still can see that we have an increase -- a very solid increase in number of visits. We can also see that the conversion rate is up, and the average order value is also at a sound level. So the key fundamentals are in place. And we think it's too important for us not to get distracted by short-term, yes, distraction from our physical store. That is contained. So by saying that, I will hand over to Allan who will go through the financials.

[Allan Junge-Jensen]

Thank you, Hermann. And if we move to the next slide, group results. Hermann mentioned it, but in the quarter, we had 37% revenue growth; and for the first 9 months, a little more, 38%. The gross profit increased in the quarter, but the margin went down 2.1 percentage points. And for the first 9 months, the gross profit also increased in absolute terms, but the margin was deteriorated by approximately 3 percentage points.In the quarter, the adjusted EBIT margin was down not only in absolute terms but also margin-wise where we had a deterioration of approximately 1.2 percentage points versus same quarter last year. For the first 9 months, the adjusted EBIT margin is positive this year, whereas last year, it was negative with a 0.3 percentage point. If we move to the next slide and take a closer look at our biggest segment, Boozt.com, we can see that the net revenue growth was 32%. We reported an adjusted EBIT of negative SEK 22.1 million and an adjusted EBIT margin of negative 3.8%. This is slightly worse than same quarter last year where we had an adjusted EBIT margin of negative 3.2%. However, for the first 9 months of this year, we had a positive adjusted EBIT of SEK 9 million and an EBIT margin of 0.5%, whereas last year, we had a negative adjusted EBIT and a negative margin of 0.6%. In the quarter, we, as Hermann mentioned, we launched the adidas, which was quite successful. We could also see that the Beauty care continue to grow according to schedule. All in all, all the customer KPIs in the quarter have been positive. And if you take a closer look into our categories, we can also see that the growth comes from all of them. As Hermann mentioned, the quarter has been characterized by aggressive pricing, which has affected our gross margin, which is, I think, is the worst thing you can say about the performance in this quarter. If you turn to the next slide, our second largest segment, Booztlet.com. You can see that the revenue was up to approximately SEK 36 million, which is a record for this segment, a net revenue growth of almost 200% versus last year and an adjusted EBIT of positive SEK 3.2 million. The EBIT margin is down versus last year, but that is on account of that we have increased the marketing expenditures in the segment in the quarter to reach the higher revenue levels. For the first 9 months, the revenue is up more than 130% versus last year. And the adjusted EBIT is positive, and the EBIT margin is also actually a tad higher than for the first 9 months of 2017. In the quarter, we have continued to have dedicated focus from the team on Booztlet activities. We've had a tad higher direct purchases of goods inventory specifically addressed to Booztlet.com. And we have in the quarter seen opportunities, which we have tried to capture by having a larger marketing spend. What we're doing at the moment is that we are moving into the customer characteristics of the group, who are using Booztlet.com, to determine the right customer acquisition costs because that is so important to determine how the growth can be profitable in the future. If we turn to the next page and look at the Other segment, which contains our 3 physical stores. We can see that the net revenue came about almost SEK 6 million, but the adjusted EBIT was a negative loss of SEK 6.1 million, which is a considerable deterioration versus last year where it was only negative SEK 0.6 million. For the first 9 months, we can also see that the total loss is close to SEK 13 million, whereas last year, for the first 9 months, it was more or less at breakeven. As Hermann mentioned, it is primarily the Boozt flagship store in Copenhagen that drive the negative development in the EBIT. And we are currently and have, for the past quarter, looked at initiatives to mitigate the losses, and we will pursue retail actions in the not-so-far future. The 2 other physical stores, the Beauty store in Roskilde and the outlet store south of Copenhagen, are performing according to schedule. And Booztlet store in the south of Copenhagen is actually reporting a small profit. If you turn to the next page, cost ratios. For the quarter, we can see the gross margin down 2.1 percentage points and, to a large extent, offset by improvements in all other cost ratios, leaving the EBIT margin only down by 1.2 percentage points versus last year. Gladly, also, we see that the staff cost ratio is down 0.2 percentage points versus last year.For the first 9 months, we can see that the gross margin is down approximately 3 percentage points. But here, it is more than offset by improvements in all cost ratios, except for depreciation cost ratio, which leaves the EBIT margin at a better state of 0.6 percentage points versus the first 9 months of 2017. As with -- as in the quarter, in the third quarter, we also see an improvement, the first 9 months in the staff cost ratio of 0.6 percentage points. If we move to the next page, key financials, we take a look at working capital. And here, we can see in absolute terms, it has increased. However, if we take a look at it as a percent of last 12-months revenue, we can see that it has decreased versus same quarter last year. This is in line with expectation, as we had communicated that the working capital exposure to net revenue will slowly and only slowly decrease over time. If we take a look at the capital expenditures in the quarter, it is up versus last year, mainly driven by development of our own platform, but also a bit into the Beauty store in Copenhagen in the third quarter. For the first 9 months last year, 2017, it was characterized by a heavy build-out of the AutoStore, whereas this year, it has mainly been focused on the development of our own platform as well as the build-out of the flagship store in Copenhagen. If you take a look at the operational cash flow, it is in line with expectations, negative for the quarter. It is highly influenced by seasonality. So this is in line with expectations. And if you take a look at the first 9 months, it is highly distorted in 2017 from the fact that the group listed the company, so it's a little bit unfair compared to the store. If we turn to the next page, outlook for the remainder of 2018. We still expect the net revenue to be above 36%. However, as Hermann mentioned, we now expect the adjusted EBIT margin to be in the range of 1.5% to 2%, where we previously have communicated to be slightly improved from 2.4%. It is mainly driven by the poor performance of the Beauty store in Copenhagen, which we foresee will continue into Q4 2018, but also the fact that the gross margin pressure has continued into the first half of the fourth quarter of 2018.The medium-term guidance, the outlook is unchanged as we still believe that we can grow the business by 25% to 30%, 3 to 5 years post the IPO, and we can deliver an adjusted EBIT margin which exceeds 6% in the medium term. So that concludes my presentation, and I will now hand it over to the operator.

[Operator]

[Operator Instructions] And the first question comes from the line of Daniel Schmidt from Danske Bank.

[Daniel Schmidt, Research Analyst]

Hermann and Allan, just wanted to ask you then to start with on the guidance that you gave for 2018. And you mentioned that you are -- yes, I think, Hermann, you said that you're containing the losses when it comes to the offline Beauty store in Copenhagen, and you're looking into actions to, of course, improve. But given the guidance that you gave for the full year, what are you implicitly expecting when it comes to the Beauty store to start in Q4 as it was around minus 6% for Q3?

[Hermann Haraldsson, Chief Executive Officer]

This is Hermann. We expect a worst-case to kind of be the same as in Q3. We are -- yes, we are not offline operators, and we are doing a lot of stuff. But instead of hoping, we are doing and I say, okay, this is -- it can't be worse, so it's contained. We assumed that it's not going to get better, but of course, we hope that it will get better. But the main important thing for us is it should not affect the rest of the business, and we need to keep the eye on focusing on the online business. So it's contained. This is what I mean by contained. We are doing a lot of stuff. We've changed management. We have been overstaffed. We've reduced to the level of activities, so we're doing all that stuff. But we expect the performance not to improve in Q4, then hopefully, we are positively surprised.

[Daniel Schmidt, Research Analyst]

And now you're sort of gradually expecting it at least to get down to breakeven as we go into '19 then, or is this a longer set of problem or a more long-lasting problem?

[Hermann Haraldsson, Chief Executive Officer]

No, we -- it's not going to be a long-lasting problem. We are not expecting it to go breakeven in '19. And at the moment, we're assuming something like maybe a SEK 4 million loss per quarter in '19, meaning that then we know what it is worst-case, it can't get worse, so that we can, again, we can focus on the online Beauty business. That's the key. And of course, this is not something that we're continuing to anticipate. So this will go on into '19, and then we expect it to be fixed.

[Daniel Schmidt, Research Analyst]

Okay. If you then sort of try to adjust for these unexpected losses in Beauty and then just look at the trend in the rest of the business, and I guess you're surprised by the promotional activity that you've experienced in the markets, but at the same time, you continued to push for customer acquisitions. And even if you make the adjustments for the offline Beauty store, it looks like you're guiding -- your guidance implies still a decline in EBIT margin year-on-year, if I'm not mistaken. Despite the fact that you've had this ambition to improve margins continuously, why are you sort of willing to jeopardize the profitability trend in order to build a customer base at this stage? And so what's your thinking there?

[Hermann Haraldsson, Chief Executive Officer]

Look, Daniel, we can see that there's still quite a healthy pressure in the gross margin. And this is, of course, has something to do with that the season started late. You have a lot of the goods unsold inventory in the market, and that needs to be cleared. We are price takers and, of course, we have to follow the market. So we are assuming that this gross margin pressure will continue. And just, if you're in the market, you can see that Black Friday started already last Sunday with most of the players. So we're adjusting, prudently assume that this gross margin will continue. It will probably also will continue somewhat into Q1. But we don't expect it to be worse. I think the good thing is that, for us, as long as our customer economics are good and the customers behave as the old ones, we should continue to push for growth because we can see that these customers will be profitable. So -- and we are quite, as an organization, quite fit. Our cost ratios are extremely well-controlled, going down. So I think that this kind of a short-term weakness in the market should not affect our long-term view. And this also, of course -- we're still spending 13% of our revenues in marketing. And it would have been quite easy for us just to lower that to 10%, 11%, but that would, again, be a stupid decision because our new customer economics are still very good. So this is our focus.

[Daniel Schmidt, Research Analyst]

Okay. But do you feel like you've been too focused on driving customer base growth as opposed to sort of overlooking your physical stores and what's happening in the market overall? Or what sort of -- what focus are you going to have going forward? And what do you see in terms of the promotional activity trend? It seems like you're saying it was high in, of course, Q3, and it looks to be high also in Q4, and you are prudent and all that in your guidance. But do you see any change at all in terms of -- is it getting worse, the same or anything, any improvement at all in terms of promotional activity?

[Hermann Haraldsson, Chief Executive Officer]

This is exactly pretty much in line with what we expected all the time, even though at the IPO we said we expect gross margins to go down towards 40%, and it will go up in seasons and down in seasons. In general, '18 has been quite a challenging year for the industry because you had a summer that -- or a winter that was long. And so the transition phase from spring to summer, there were basically were none. And then we have a summer, what was extended. And I think, like asset administration, we have to be resilient in almost kind of every weather. So no matter what happens, you can take it. I think that's why, for us, it's important to be this focused in the business, in the segment, in the region. And you're asking now, have we not been focusing enough on the physical store. It's important for us that this physical store is not a distraction. We are doing what it takes to kind of mitigate that, and we have people working on that. But my focus is still on growing the business profitable. And I think it's very important for us not to lose sight of the opportunities going forward because we see that the offline-online migration continues. And if anything, what we have now in this environment, it will only accelerate.

[Daniel Schmidt, Research Analyst]

Yes. But in -- and in terms of the promotional activity as of now compared to a couple of weeks ago, is there anything to say there? Are you sort of -- are you very prudent in your new guidance? Or how should we look at that guidance?

[Hermann Haraldsson, Chief Executive Officer]

The promotional activity started basically in October. October was all kind of sales by all kind of parties, and this is how you navigate. So you just have to make sure that you're in the markets. We are monitoring the markets. Customers, they are extremely observant on what are the market prices. I believe I've told you that I tend to sit down with customer service to listen in calls, and the customers know exactly what the market price is. So we've thought of that. The good thing is that being in this mid to premium per segment gives you kind of protection because there's kind of a flaw of how deep you can discount, and you will discount. So you just have to -- again, you have to be resilient. And you have to have a flexible setup so that you can take the dips that will be -- and this will probably not be the last dip, but we will see.

[Operator]

And the next question comes from Niklas Ekman from Carnegie.

[Niklas Ekman]

First, a follow-up here, just to clear out this lower margin guidance here for Q4. Just to be clear, because you're talking about in 9 months, your EBIT margin is up 60 basis points, yet you're talking about a margin contraction for the full year of at least 40 basis points. And I guess that indicates that your Q4 margin would be down by at least 2.5 percentage points. And of that, the Beauty store would be only 60, 70 basis points, tops. So it looks like the margin contraction here is mainly driven by increased campaign activity rather than the Beauty store. Is that -- or am I getting something wrong here in my calculation?

[Allan Junge-Jensen]

Allan here. No, you're absolutely right. And I think this is the prudent guidance we have given because we have seen that for the first half of Q4, this gross margin deterioration has more or less continued. So we are awaiting, as we did last year, for the 2 major events in Q4 to determine the outcome of the full year and that will be Black Friday, which is in 2 days, and the start of the Christmas sale. But all in all, up until now, we can see that the gross margin has deteriorated, so that you are right.

[Niklas Ekman]

Okay. And just who exactly is driving this increased campaign activity, as you're seeing? Is it the big players? Is it more new international players? The small players? Is it the traditional retailers that are becoming more aggressive online? Or what is the general shift in the market in terms of campaign activity?

[Allan Junge-Jensen]

Well, it's difficult to make a generalization completely which will be accurate, but from our chair, we see that the big players jointly are sort of putting the pressure downward on the gross margin.

[Niklas Ekman]

Okay. And can you say anything about what efforts are being made to reduce the cost, the losses in the Beauty store? Are you talking about the staff reductions? Or what kind of efforts here are being made to make that -- those losses more controlled?

[Hermann Haraldsson, Chief Executive Officer]

Niklas, this is Hermann. When we opened the store, it was a very -- it was kind of overstaffed. So we've, of course, reduced staffing. We are -- we have been building the assortment also in the store and waiting for some concepts to be ready. So this is kind of being aligned at being more kind of a physical retailer than an online retailer going offline and then, of course, aligning the staff. And again, we changed management. It's mainly kind of a conversion problem in the store. So we believe that time will -- with the actions we make, time will solve it.

[Niklas Ekman]

Okay, okay. And if you look at this jointly, the physical store and the Beauty concept in total, is it worth the investment so far, the way you see it? Does the sales -- the online sales, is that progressing strong enough to justify these costs that you see? Or is this something that has turned out a disappointment?

[Hermann Haraldsson, Chief Executive Officer]

Online Beauty is actually growing quite well at the moment; it should, of course, because it's Q4. But the key numbers -- their numbers are quite good. And I think the most important thing is that it resonates quite well with our customers. More than 60% is kind of joint Beauty and cash in basket. The Beauty segment online is quite profitable. So it looks as if it's going to be -- it's a good business, of course. We had hoped that the offline would not drag us as much nowadays. But based on the online experience, it's a good decision.

[Niklas Ekman]

Okay. And also, I was curious about adidas, if you could say anything more about the reception here. You talked about the initial development here in the first couple of weeks. Have you seen any more traction here in terms of ability to get new brands that adidas has proved to be very much a door-opener? I know you talked about this in the past. Have you actually seen that play out now during the autumn as well?

[Hermann Haraldsson, Chief Executive Officer]

Yes and no, actually. If you look at our Sports & Athleisure category, you can see that we have a quite strong brand buildup, and it will be only improved during the spring/summer next year and also winter. We have a lot of interesting brands lined up, plus now we're getting the interesting part of some of the other brands. There's one big player that we still don't have, and we're working on that. But I think the Sports -- the adidas launch in the Sports category has proven to be extremely promising. And with the improvements we are making on the site with security, et cetera, it's going to be quite a big growth driver going forward.

[Niklas Ekman]

Okay. And then just one final question, coming back to the margins here. After Q2, I felt you were fairly optimistic about your ability to drive margins higher in 2019, and you talked about marketing costs, for instance, being more contained, not in absolute terms but in relative terms, and how that could be a material driver of profitability in 2019. Do you think that outlook has changed now considering the weaker outlook for Q4 that basically, what you gain on lower marketing spend, you can lose in terms of further gross margin pressure due to campaigns? Or is this very much an isolated issue here in Q4 because of weather? Or how can you elaborate around that, please?

[Allan Junge-Jensen]

Yes, Niklas, Allan here. If you look at the competitive pressure as we see it right now, we, in our estimates, we actually see that it could continue into the first quarter of '19, maybe even the second quarter of '19, so cover the entire spring/summer '19. But also from where we stand, we don't see this as a sustainable level of gross margin at the current level. So it's probably also due to the fact that there's an overweight of supply in the market. So it will probably normalize in the second half of 2019. On the other hand, I mean, if you're a little bit more opportunistic, we can also see there's an opportunity to actually gain access to good campaign buyers in the period. And this, of course, is an opportunity that we will pursue and have already pursued.

[Operator]

And the next question comes from the line of Laurits Kjaergaard from ABG.

[Laurits Louis Kjaergaard, Research Analyst]

Just in regards to your KPIs, looking extremely strong this quarter. Zalando, they have flagged that in regards to the returns, they have gone up quite significantly. A lot of people are buying a lot of clothes, trying them at home and then basically returning them again. Are you seeing the same tendency in Boozt.com? And also, is there a way to mitigate that? The example is through sportswear and children's clothing, where I suspect the return policy is a little -- well, less people return their stuff, basically.

[Hermann Haraldsson, Chief Executive Officer]

Yes, this is Hermann. We actually see that returns are more or less the same level as last year, around 40%. So we haven't seen an increase in returns. And you're totally right that going through Sports and Kids, that is putting kind of -- keeping the trends down. And also, another interesting thing is that we see quite a large increase in the men's category, which also has a lower return rate. So we don't see an upward pressure on the returns. Of course, we are trying to do everything we can by reducing on our kind of -- avoiding that our customers make sizing mistakes, using machine learning and advice to do that. But returns are at the same level, and I wouldn't say they're healthy, but this is what it is. So it's not a problem for us.

[Laurits Louis Kjaergaard, Research Analyst]

That is very interesting.

[Operator]

[Operator Instructions] And the next question comes from the line of Michael Benedict from Berenberg.

[Michael Benedict, Analyst]

Correct me if I'm wrong, but I believe last time we spoke, you said that adidas and Reebok would launch at the end of September. Was there a reason for the delay in that? And has the full Reebok range launched on your site?

[Hermann Haraldsson, Chief Executive Officer]

The reason was late in deliveries. Of course, we expect always like we have a delivery plan, and it has delays for -- in delivering to the warehouse. We can't go live, so that was the main reason. When we launched, we launched approximately half, maybe 60% of the full range that we expect that we will have. So -- because there is kind of a time delay from you place the order until they can deliver, that means that we won't have the full assortment until Q1 next year.

[Michael Benedict, Analyst]

Great. And on Reebok, is that full range launched? Or is that...

[Hermann Haraldsson, Chief Executive Officer]

It's more or less the same situation as with adidas.

[Operator]

And we have a follow-up question from Daniel Schmidt from Danske Bank.

[Daniel Schmidt, Research Analyst]

Two questions. One of your competitors were out fairly recently and actually reversing their strategy in one of the bigger markets when it comes to charging for deliveries that are below a certain order value. Do you see any more signs that this could be sort of a change in the market, that the tide would be turning in any way away from giving everything for free?

[Hermann Haraldsson, Chief Executive Officer]

Yes, it's interesting. As you know, we have always had the specials that you had to buy a certain amount before you get free shipping. Actually, this comes back to what Allan was talking about before about -- but this market, actually, we see from now on and also into '19, there will be a lot of opportunities because in a turmoil like that we have now, the players that are strong, their costs in order, they come out strong. So this is why I'm saying that when you have these kind of noisy orders, what you could say, with this opportunity, of course, if some of the competitors are changing their key proposition, that opens up for us.

[Daniel Schmidt, Research Analyst]

All right. Maybe it's a start of something. Second question, on the distribution cost, POS node was out a couple of months ago with price hike going into Q4. And what have you seen regarding that so far? And what are you doing to mitigate that sort of extra cost?

[Hermann Haraldsson, Chief Executive Officer]

Yes, we -- you're absolutely right that POS node has come out with extra cost in Q4 and obviously has an effect on the cost ratios. We see overall that there is kind of a shipping of distribution inflation, and this will also go into '19. And the best way to mitigate that is to be a strong player, to be a big player and to have a lot of options. This also why we don't only work with one single player, but we have different players in the different markets. And we can quite easily shift volumes around 2 different players. So you might say that we try to keep all our options open because we know that there will be this upward pressure or inflation in distribution cost.

[Daniel Schmidt, Research Analyst]

Would you say that -- or would you be able to quantify in any way how many suppliers you have on distribution now compared to a year ago or 2 years ago? Has that sort of doubled the number of suppliers? Or any guidance or any -- could you shed any light on this?

[Hermann Haraldsson, Chief Executive Officer]

We have -- on the kind of next-day delivery, we have more or less the same suppliers, 4 different suppliers, one main supplier per country. But then we have the new evening deliveries, same-day deliveries options and, of course, we have the different suppliers wanting to expand into territories outside their home territories. So we have some good options also going forward. But of course, we are expecting a slight distribution inflation going forward.

[Daniel Schmidt, Research Analyst]

Yes. Okay. Maybe that could be sort of counteractive medium term by the sort of -- by the introduction of delivery charges on some of your competitors, then maybe easing the pressure overall.

[Operator]

As there are no further questions, I'll hand back to the speakers.

[Hermann Haraldsson, Chief Executive Officer]

Okay, thank you for taking the time, spending these 40 minutes with us, and we will definitely talk later. Thank you. Bye.

[Operator]

This now concludes our conference call. Thank you all for attending. You may now disconnect your lines.