Cdon AB

STO:CDON

Earnings Call Transcript 2023-Q1

[Operator]

Welcome to the CDON Q1 2023 Conference Call. [Operator Instructions]

Now I will hand the conference over to the speakers: CEO Fredrik Norberg and CFO Thomas Pehrsson. Please go ahead.

[Fredrik Norberg, executive]

Thank you, operator. Next slide. As the new CEO of CDON, I'm really happy and honored to welcome you to this quarterly presentation hosted by myself, Fredrik Norberg; and Thomas Pehrsson.

Next slide. The agenda for today is to walk you through the Q1 results then introduce some future plans for you. We will update on the integration process and synergies around that. And then Thomas will guide you through the financial performance and directives. And then as usual, we end with some Q&A from all of you listeners.

Next slide, the Q1 results. Next slide. For CDON, it was a weak top line that ended on minus 10% versus last year. This was mainly due to challenging and uncertain economic environment in the Nordic markets for the first quarter that we all are aware of. If we're looking at the gross profit after marketing, however, it was increased with 8% versus last year; and this comes mainly from the commission increase that was implemented on the 23rd of January. And all of this ended with a positive result of plus SEK 0.6 million, and this is an impressive improvement from last year of minus SEK 27 million. And this is due to the stronger gross profit after marketing but also mainly due to the cost reduction from the restructuring that was implemented in December.

If we look over to Fyndiq's results, also had a weak first quarter but even weaker. It was partly due to the weak economic environment as well but mainly due to the COVID-19 lockdown in China. They had a complete lockdown in January and February last year and we had to pause all the Chinese merchants on the Fyndiq site due to this. The Chinese merchants add up to roughly 20% of the total sales, so this had really a huge impact. This, however, turned around in March; and just March by itself generated a positive EBITDA. And for the whole quarter, it was a negative of SEK 0.5 million but an improvement compared to last year.

And all in all, CDON and Fyndiq combined managed to have a positive EBITDA for the first quarter, and this is really something extra because the first quarter is the weakest quarter for the whole year. And given all the circumstances, I'm really impressed of both of the sites and companies who have managed to do this.

Next slide. We have some future plans. Next slide. Our vision is that we want to unleash the power of the marketplace to give the best experience for customers and merchants across the Nordics. Next slide.

In order to reach this vision, we have set up 3 long-term goals. The first one is to become the leading marketplace for the Nordics and fending off Amazon. The second one is a new -- ambitious, new long-term goal for the company. That is that we're going to increase the penetration of marketplaces and reach a double-digit market share in the Nordic e-commerce industry. And the third one is that we're going to leverage the scale benefits of the marketplace model to deliver reliable growth with expanding profitability.

Next slide. We also have some short-term goals and focuses in order to deliver on the long-term goals. The first one is to increase quality supply, to provide more of the products that people want and utilize the low-margin cost of bringing in more supply. We're also going to improve the customer happiness. This is really the base of everything. We need to get CDON on to the high levels that Fyndiq have managed to reach in the last couple of years and continue from there. Today in the Internet economy, you can fool a customer once but never twice. And we must make sure that we have long-term customer happiness in everything that we're doing.

And the third one is to create distinct customer experiences for the 2 sites and leverage 2 brands with different value propositions to serve different types of customers and needs. And these 3 different short-term goals and focus areas are intertwined with each other. In order to really improve the customer happiness, this could be derived from the different customer experiences. There could be a demand or expectation to have different setups or -- of customer service and delivery options and so on in order to fulfill the 2 brands' value propositions. The quality supply that we're talking about to get more of the products that people want will also, of course, affect the customer experience. We will make sure that we have a clear strategy when it comes of what products that we're going to have on CDON and what products that we're going to have on Fyndiq. And by doing that, that's going to be a base of creating a distinct experience from the 2 brands. Next slide.

So why is the marketplace so good? And why do I love the marketplace model? If we start on the customer side: There is a superior shopping experience with the wide variety of products and the convenience of a one-stop shop. You have everything you want and need at one place. In addition to that, we have the merchant competition that are leading to lower prices. When we reach the marketplace mechanics, the competition starts between the merchants, which are pushing down the prices. On the merchant side, there is an opportunity for additional sales and access to new customer groups and markets that the sellers usually don't reach. And this is also at a lower cost and low financial risk due to the fact that we are charging the sellers when they are selling something. And we have a reduced need for marketing or technical know-how. You don't need any marketing skills or developers and so on when selling at the marketplace. You pretty much need to be good at finding good products that people want at good prices and make sure to ship them to the end customer.

And last but not least, the whole business model, why is it so superior? It's highly scalable. I cannot see -- there are a few companies that are selling goods that, from 1 day to another, can double the sales and without -- adding pretty much no extra operational expenses. And this is what both CDON and Fyndiq are doing each and every Black Friday. From 1 day to another, we double the sales; and we do not increase the personnel or other costs related to that. If you have a physical shop, you need to have extra staff in the stores. If you have a classic e-commerce site, you need to ramp up the warehouse staffing and everything around that. As a marketplace, we can scale instantly.

We also have low or no capital tied in inventory. We pretty much have a warehouse with plus 10 million products and not a single penny sitting in the warehouse. And we have the ability to capitalize on any product trends and low product risk when the trend disappear. A great example of this is last quarter, when we had this [indiscernible] trend and we were selling a bunch of crank radios.

I would guess that both CDON and Fyndiq together sold most crank radios in the whole Nordics. Crank radios are vev radios in Swedish. I would guess that no one in the organization knew really what a crank radio was and didn't know that, that was part of the supply in both CDON and Fyndiq. And then from pretty much 1 week to another, this totally exploded. And we had such a huge sales impact from this product trend. Then after a couple of weeks, that trend disappeared; and we didn't have any product risk, no penny in the warehouses.

Next slide. We see that there is a significant potential for the marketplace in the Nordics with plus 10x higher penetrations in other markets. If we're looking to the left side, you can see that on average there is a marketplace penetration of 50%. In the Nordics, it's 5%. It's really nothing. If we look to the right, you see the chart which displays roughly a ballpark, the revenue per capita per marketplace in their home market. And you see on the top you have Amazon. And then going down, you have Bol in Holland, OTTO in Germany and so on, down to CDON and Fyndiq. And the average spend per people living in these countries are tremendously higher than they are in the Nordics; and to reach a 10x potential here, we see, is a -- really achievable if we manage to set and reach our long-term and short-term goals as described before. Next slide.

And just to illustrate the scalability of the marketplace, we have here a chart showing this. If we increase the GMV with plus 20%, we have a direct EBITDA effect of SEK 36 million. If we increase it by 40%, it's SEK 72 million. And at plus 100%, it's staggering SEK 180 million. And just to emphasize also that the target CDON organization is designed now to generate and handle substantially higher GMV, so we really see a high potential in this for the future.

Next slide, the integration and synergies around that. Next slide. We will create one team, one merchant interface while maintaining 2 offices and go to market with 2 distinct brands. Next slide.

We have proposed a Board with deep domain knowledge and experience with significant ownership incentives. Christoffer Norman have been nominated to become the Chair of the Board, who has an extensive marketplace experience from Avito and Fyndiq. We have Erik Segerborg, who have been nominated to become the Vice Chair of the Board, who also have an extensive marketplace experience from both Avito and Fyndiq. And in addition to this, we will continue with 3 Board members, which are Brad Hathaway, Josephine Salenstedt and Jonathan Sundqvist. And with this, we really have a perfect mix of a Board of deep domain knowledge and also history from the -- both companies. And combined with the management, the Board and the management represents 25% of the ownership, so this will more and more become a owner-operated business.

Next slide. We have appointed a new management team. And this management team have, combined, plus 40 years of marketplace experience, which is really something extra. From left: We have Kattis Åström, who will be the Chief Experience Officer. We have Niklas Öhman, who will be the Chief Product Officer. We have Atra Azami, who will be the Chief Technology Officer. We have Thomas Pehrsson, who will become the CFO and Deputy CEO. And we have Linda Andersson, who will become the CSO, Chief Supply Officer. And we have Björn Idrén who will become the Chief Commercial Officer.

Next slide. We have a -- merger cost synergies of approximately SEK 40 million, with large additional top line and margin potential. If we start on the left: We have identified operational expense synergies to be realized over the coming 18 months. Such synergies include technology platform costs by migrating to one platform, consultant reduction and overhead overlap. These synergies will gradually grow until its fully potential will be realized in 18 months.

In addition to this, we have several high-potential synergy areas to be explored. We have the merchant offering and acquisition with one team and one stronger offering to the merchant industry. We have take rates optimization, including advertising products and other value-added services. And last but not least, we have the traffic acquisition optimization by aligning, getting learnings between the organizations and by that increasing the efficiency of the marketing for both sites.

Next slide. I hand over this part to Thomas.

[Thomas Pehrsson, executive]

Thank you, Fredrik.

And now on to the financial performance and directives.

Next slide, please, group income statement. First off, total GMV for the group amounted to SEK 408.5 million compared to the same period last year of SEK 455.7 million, which is a decrease of 10%. For the 3P business, the decline in GMV was 8%. Net sales for CDON Marketplace amounted to SEK 49 million, in comparison to SEK 44.7 million for the same period last year.

The gross margin continues to increase and amounted to 56.8% compared to 47.7% last year. The increase is due to the combination of marketplace being a higher share of total GMV and a higher take rate for CDON Marketplace. This resulted in a gross profit, after marketing, which was 8% higher than last year.

Total expenses for the quarter amounted to SEK 57 million compared to SEK 84.2 million last year. The drastic difference is due to our previous restructuring and the efforts in reducing overall costs. In line with our previous financial directives of achieving at least EBITDA breakeven for full year of 2023, we are pleased to say that we generated a positive EBITDA of SEK 0.6 million for the quarter.

Next slide, please, group balance sheet statement. In comparison to last year, the fixed assets have decreased due to the write-downs of our subsidiaries and minority stake during the fourth quarter of 2022. Our inventory increased due to lucrative market opportunities and assures us that we have the supply to meet the market demand. We ended the quarter with a cash balance of SEK 55.9 million.

Next slide, please, group cash flow statement. Cash flow for the period amounted to a negative SEK 67.2 million, which is mainly due to the seasonal variations in working capital. As said, we ended the quarter with a cash balance of SEK 55.9 million. The now implemented restructuring and cost-saving program provided the confidence in our cash level going into the second quarter of 2023.

Next slide, please, financial directives and targets. The financial directives announced in the press release before the Q3 report last year are our 3P business shall continuously gain market share in the Nordic e-commerce market. Our 3P take rate shall increase over time. We shall enjoy strong incremental margin as a result of its (sic) [ CDON's ] high-gross-margin 3P business and the relatively fixed nature of administrative and general costs.

After the first quarter of 2023, we have the following comments. During the quarter, our 3P business has performed slightly worse than the market with a decline of 8%, in comparison to the market decline of 6%. This is mainly due to the weak performance in our key electronics vertical. Our take rate increased with 1.9 percentage points, which is a result of -- from the commission increase implemented in January and our continued efforts to diversify into higher-take-rate categories.

Our total gross margin increased by 9.1 percentage points due to the already mentioned 3P take rate increase, but also gross margin increased due to a higher share of our sales from our 3P business. We have had a substantial focus on optimizing our marketing spend through more efficient spend in the paid channels. As a result, we decreased our marketing costs of GMV in percentage by 0.1 percentage points, in comparison to the last quarter. SG&A excluding marketing costs have further been reduced as a result of the previous restructuring and efforts in reducing overall costs.

We are confident in our ability to reach our short-term targets of being at least EBITDA breakeven for the full year 2023.

Thank you. And over to you again, Fredrik.

[Fredrik Norberg, executive]

Thank you. This ends the presentation part and now we open up for the Q&A part.

[Operator]

[Operator Instructions] The next question comes from Nicklas Fhärm from SEB.

[Nicklas Fhärm, analyst]

So I'd like to start this Q&A session by asking you a little bit more about the potential synergies and the SEK 40 million savings program as you combine Fyndiq with CDON going forward. Could you give us some sense of sort of the time line towards achieving the full SEK 40 million at year-end next year in terms of the coming quarters? i.e., will it be back-end loaded or not, et cetera, et cetera? And also I was wondering: You have not charged any acquisition-related costs in your operating profit before D&A, you write. And my question is where can we find these costs. And what do you expect them to end up at?

[Fredrik Norberg, executive]

All right. And thank you for your questions. Starting with the synergies, I just also want to kind of point out that I am and we are 9 days in from closing with this integration, so it's really, really early days. And I'm really impressed with us even being able to present these type of numbers. As you say, we will continuously be able to get the upside on these cost synergies, where the end result is going to be when the platform is totally migrated, which will happen by the end of next year. If it's front loaded or back loaded, it's a little bit too early to say, to be honest. And what we, though, can say is that, after 18 months, we're going to have the run rate of minus SEK 40 million from that point on. When it comes to the transaction costs and -- that's something that we're going to add for the next quarter.

[Thomas Pehrsson, executive]

Yes. Nicklas, the acquisition costs are not realized yet but will come in now in April and May, so they will have an effect in Q2. And we will get back to those, but they have really a negative impact on our EBITDA in Q2. But it's too early to say the magnitude of it.

[Nicklas Fhärm, analyst]

I understand. And may I just say before I forget it: A big kudos to you for disclosing the full pro forma P&Ls at this early stage. And can I also ask, do you expect any specific costs relating to generate these SEK 40 million in savings?

[Fredrik Norberg, executive]

You mean additional costs in order to reach those cost synergies.

[Nicklas Fhärm, analyst]

Yes, yes.

[Fredrik Norberg, executive]

It's hard to say. And roughly, that's pretty much included in the total cost synergies as we have calculated it.

[Nicklas Fhärm, analyst]

Okay. So it's a net number as an ambition at least. Is that correct?

[Fredrik Norberg, executive]

Correct, correct.

[Nicklas Fhärm, analyst]

Wonderful, all right. And final question at this stage, and then maybe I can come back later into the call. How -- could you just give us the backdrop to the fact that you have removed your recently set target, which would have implied a doubling of GMV by the end of 2025?

[Fredrik Norberg, executive]

Yes. And to start off, it's really hard for me to inherit a target so close. We have a year of integration and realizing synergies from the 2 organizations. Next year, we will really try to level up from that stage. And hitting a mid-term target already '25 is too early, from my point of view, but I also want to say that we are increasing and really putting a really ambitious goal here. And so I think this new long-term goal with a double-digit market share is even more ambitions -- ambitious than the last mid-term goal, and that's something that we strongly believe in. The Board and me and myself and the management and the whole team behind us all believe that we have high potential in this, but for this year, it's going to be a lot of restructuring and focus on that, of course.

[Nicklas Fhärm, analyst]

Yes, yes. No, that makes sense, Fredrik. Can I just ask you, is this -- I mean long term is everything from now to eternity, right, so is this kind of 5 years out or 10 years out or 20 years out? And I guess what I'm trying to get a feel for here is kind of your similar expectation for the overall marketplace market growth over the coming years, if that makes sense.

[Fredrik Norberg, executive]

Yes, exactly. We can just see that, if we look into Europe and rest of the world, as I said in the presentation, we have such a much higher penetration than in the Nordics. And it's easily plus 10x. How fast we can come up to those levels, it's too early to say, yes. That's the only thing I can say about that, but I strongly believe that in the future we have the potential to reach these numbers.

[Nicklas Fhärm, analyst]

Very well.

[Operator]

The next question comes from Adam Wyden from ADW Capital.

[Adam Wyden, analyst]

Guys, Can you hear me?

[Fredrik Norberg, executive]

Yes.

[Thomas Pehrsson, executive]

Yes.

[Adam Wyden, analyst]

Good. Well, welcome, Fredrik. And congratulations, Thomas. Really, really exceptional results to be EBITDA breakeven in a tough economy. And obviously the cost cuts have taken hold, and the commission rates, but I wanted to ask you sort of a housekeeping issue just sort of bridging some numbers for me and then more of a qualitative question that maybe Fredrik can lead with. But CDON had target EBITDA breakeven in 2023, pre the Fyndiq merger, based on sort of the cost restructuring. You guys have taken commission rates up in January. And I think, based on our previous conversations, you guys have anticipated a material decline in GMV or at least compared forward in '23. It doesn't seem that material yet, so like when I sort of unpack the numbers, CDON was profitable in the first quarter of SEK 600,000. You only got 2 months of the 3 months of the increased commission rates, so like if I just sort of run the numbers out and assume a similar sort of GMV trend or even though PostNord says that it will be positive in the back half, you can see kind of core CDON doing anywhere from 20 million to high -- almost nearly 100 million of EBIT based on sort of the commission rates and the cost structure. [ You called 20, 30, 50, 70 ]. Fyndiq did [ 7 ] last year. They obviously improved. Before that, they were doing about [ 30, 40 ], then [ back out the H&M ] sale but -- some number. Call it somewhere between [ 20 and 30 ]. And they did [ 7 ] last year; and this year, improvement on the EBITDA.

So when I sort of unpack all of that, I sort of say, okay, CDON is doing somewhere between [ 30, 40, 50 ]. Fyndiq is doing [ 20 ]. And then when I add the 40 million, I get to sort of a [ $100 million ] number before GMV growth and before SEO and SEM and before take rate. And I guess my question back to you, and maybe this is more Fredrik, is there was a recent article in Ehandel that basically said that Amazon is almost entirely marketplace in the Nordics. They're not really touching the goods if they can avoid it, but to the extent that they are, they're capturing almost 50% of GMV, 25% on take rate and 25% in supply chain and logistics.

So when I just sort of run the numbers on core CDON of 2 billion of GMV, if we get our take rate from 12.5% to 20%, that's 7.5% on 2 billion of GMV. That's 150 million of EBIT right there even before you sort of start working on the SEO and SEM. I mean I'm just sort of curious, Fredrik, how you approach this because I think previous management had sort of said, "Hey. Let's grow at all costs." And that resulted in mobile shop and a lot of low-GMV merchants and a lot of losses. And it seems to me that, even if this business didn't get 10% market share, there's really a clear defined path to hundreds of millions of dollars of EBIT, so I'm sort of curious sort of how you look at all of this and if you could unpack some of this for us. I think that, that would probably be most helpful for most people.

[Fredrik Norberg, executive]

All right. And thanks for your questions. Yes, in general, it's really hard for me to go on to detail level and comment on your figures. What I can say, though, is that we see that the direct synergies which we have defined as the cost synergies is SEK 40 million that we are really sure about. And then on top of that, which is now in our coming weeks and months to really understand better, is the top 3 synergies as we see it, which concerns the merchants offering and acquisition. The second one is the take rate optimization as you're talking about and also adding value-added services to that which is very interesting to get the learnings between the 2 sites. And the third one, as you're also addressing, is the traffic acquisition optimization. It's really too early to say any numbers. And even if we have them, maybe I wouldn't address them, anyways, but of course, there are really, as we are writing in the report, some large additional top line and margin potential in there. We are 9 days in. And after closing, we can disclose the data between the companies and so on. And we are 9 days in, but it's, I mean, you're addressing the right areas, Adam.

[Adam Wyden, analyst]

Yes. I mean look. I think I will -- I just would point out that it -- Fyndiq's DNA has largely been around maximizing margin and gross profit after marketing. And I think most people, again legacy CDON shareholders, are sort of more worried or perhaps concerned about this idea of growth at all costs. And what I would say is that CDON obviously, in the last -- call it, since December, if you want to call it 5 or 6 months, has taken a very, very hard look at doing commission rates and doing cost structure. And obviously it's manifested itself in a much more positive result. And I will just point out that growth is something that happens over time as people enjoy the offering. And I think that, if we can drive [ $200 million, $300 million ] of EBIT out of this with the synergies and the take rate, that would -- that provides an enormous amount of value that you can build upon to grow. So that's the math that we're doing. I hope that you guys take the efforts and initiatives when you're ready to sort of be able to communicate this because to me that's -- sort of that's the value in the merger.

[Fredrik Norberg, executive]

Got it.

[Adam Wyden, analyst]

Okay, that's it for me for this minute.

[Fredrik Norberg, executive]

Thank you, Adam.

[Operator]

[Operator Instructions] The next question comes from Nicklas Fhärm from SEB.

[Nicklas Fhärm, analyst]

So it would -- I think it will be very interesting to hear you comment and elaborate a little bit on sort of current trading and the quarter. Obviously you missed a few percentage points versus the market. And to be honest: The market estimate is where it is, right? It's an estimate. It's not a factual and -- conclusion, I guess, but nevertheless, you mentioned a little bit of mix effects, et cetera. Could you give us an idea of how the quarter developed and perhaps touch a little bit on maybe April, if you like to at this stage, from this perspective, please?

[Thomas Pehrsson, executive]

Shall we start with the quarter, Nicklas?

[Nicklas Fhärm, analyst]

Excellent.

[Thomas Pehrsson, executive]

Yes, we can do that. We have to remember that we are comparing us with a quarter in 2022 where electronics was the category with the highest growth [ over all ] categories. And now we're up against that, which is a -- rather tough for us, of course. And for instance, the Q1 is also we were up against the other segments that have been growing a lot, like pharmacy products. And those together actually makes up for us not being able to increase versus last year's quarter. When it comes to April, we don't -- as you know, we don't predict on any future numbers, so I can't really go into exactly what April looks like right now.

[Nicklas Fhärm, analyst]

Yes. Fair enough. And can I just also ask you sort of the same question on Fyndiq? And you -- and may I add: You're right that typically a Chinese vendor contributes about 20% to total GMV. Is that for the period that -- in discussion, i.e., January and February every year? Or is that on a full year basis for that matter?

[Fredrik Norberg, executive]

That is on a full year basis, and yes, it was no difference in the first quarter. We have the seasonal effects from the Chinese New Year's, which happens every year, but this part with the Chinese lockdown pretty much came as a surprise for, I think, the whole world and for us also, of course. And it had a big hit for us, but for us, we turned it around -- or for us. I'm going to stop saying "for us." For Fyndiq, we saw a turnaround coming back where we're supposed to be in March and looking good forward looking also.

[Nicklas Fhärm, analyst]

Can I also follow up? I mean obviously the platform integration or migration or the term we should use is going to be very important, so what's on the very top of the agenda for your new CTO of the CDON group right now and going into the coming summer period? What's the first thing that needs to be addressed or will be addressed?

[Fredrik Norberg, executive]

Yes, exactly. So first off, we call it migration, so we're going to migrate. We have 2 platforms and we're going to migrate into 1 platform. We have a migration team in place, and that's the first thing to get in place during these 9 days that have passed now. And the -- next up is to set the plan for the whole migration. Which parts, and in what order? And so on. And what needs to be rebuilt and whatnot? Much details that -- I'm not into the details enough to speak about here, but I would say that is going to get, of course, a lot of attention from us. And we must make sure that the sites are up and running and that they're running business, are continuing as it should during these 18 months but at the same time as -- that we can do this migration as fast as possible in the most controlled way.

[Nicklas Fhärm, analyst]

And just for me because I'm rather a financial analyst than a technically experienced platform builder, would it be fair to say that you're going to try to combine the best of sort of the 2 separate platforms into 1 new? Or is it so that 1 or the other is actually sort of the base case from which you will build and add going forward, if you see what I'm trying [ to get at ].

[Fredrik Norberg, executive]

Yes, I understand. And it's a little bit too early to answer on that, to be honest. There's a lot of discussions around that and we're going to do it in the best possible way for the -- both companies. Either way, it's going to be a lot of cost reductions. And we're going to increase the efficiency on our developing output when we have everything more centralized.

[Nicklas Fhärm, analyst]

Yes, yes. All right, that's it for me.

[Operator]

There are no more phone questions at this time, so I hand the conference back to the speakers for any written questions and closing comments.

[Thomas Pehrsson, executive]

Thank you. And first question, from [indiscernible]. It's about cash. "You only have 5 million in cash, excluding [ merchant cash ]. Do you believe this is sufficient level? Or do you need any external financing in the near future?" And the answer to that: Yes, we have implemented the restructuring and cost savings program; and that provide us with confidence that our cash level going into the second quarter of 2023 is enough. And also I would like to say that you have to bear in mind that the marketplace model creates variations in [ merchant debt ] period between period, and needless to say it will fluctuate between periods. However, we are confident in the cash position and the dynamics of our working capital. Thank you.

And then we have a second question, also from [indiscernible]. "Why did you increase inventory and spend time on 1P business when you are going to focus on 3P business?" Yes, you're right. We are phasing out the 1P business. [ There is a part left of ] that, that is lucrative. And we are not going to comment on our marketing opportunities more in detail due to competition. Over time, we will phase out the 1P business.

[Fredrik Norberg, executive]

And the last question is how much of the SEK 40 million in synergies are related to the overhead and overlap. Yes, we're not going to disclose those numbers. And we're going to keep it on the high level of direct cost synergies of a total of SEK 40 million.

All right, I think that was the last question.

[Thomas Pehrsson, executive]

So no more questions, so thanks a lot for calling in and for asking all the good questions. Thank you.

[Fredrik Norberg, executive]

Thank you, everybody.