Concentric AB

STO:COIC

Earnings Call Transcript 2021-Q1

[Operator]

Hello, and welcome to the Concentric Interim Report January to March 2021. [Operator Instructions] Today, I am pleased to present David Woolley, CEO; and Marcus Whitehouse, CFO. Please go ahead with your meeting.

[David Woolley, CEO & President]

Hi. Good morning, and let me add my welcome with David Woolley and Marcus. Yes, very busy and interesting quarter. If we would move then to the next slide, we'll find the agenda. And the agenda carries no surprises. What we're going to talk about is the normal format of information. And I will talk about the summary for the quarter 1 2021. And then I'll hand over to Marc Whitehouse, who will talk about the financial results for the quarter. Then I'll come back to myself to give a brief outlook on how Concentric sees Q2 2021. After that, then we'll open up for the Q&A and look forward to some interesting questions. So if we go to the next slide, we'll see an introduction to the summary to Q1 2021. And if we then go to the next slide, again, we will see the highlights for Q1 2021. First of all, looking at the net sales. Okay. So the first quarter 2021 was extremely interesting, extremely exciting and overall, quite successful. If we start off by looking into the demand from that end markets, then basically, if we look quarter-on-quarter, then we see good increase in sales. Europe and rest of the world up 15%, and the Americas up 3%. We have spoken many times, clearly, we have a denomination or a concentration on the truck industry, but we have a very good presence in construction and ag. And if we look at Q1, we will see that the truck has led the strengthening demand. But of course, now the construction and ag is trying to and is starting to catch up a little bit. Of course, all of this very good demand and very good sales also wants to take us to talk about the supply chain. I don't think we're talking -- we aren't giving any surprises. Globally, the supply chain is very much struggled to keep up with the increase in demand. And I think a number of our OE customers have gone out before us to explain how the quarter 1 sales have been somewhat limited by the supply demand dynamic. What can I say but Concentric, of course, we feel those same pressures. But critically, and people who follow Concentric may anticipate my next comment, our team have done a fantastic job to actually keep our suppliers -- our customers -- sorry, with parts to keep their factories moving during this very challenging quarter. Again, people who follow our progress, know that we acquired Allied Enterprises at the end of Q4 2020. And so this is the first quarter where we include the results of Allied. And we're pleased so far with the integration of this business, which fits very nicely in our business between high and low-pressure pumps. So if we look at the Q1 sales, year-on-year, then we can see that they're actually 5% down. So we started to compare our results now with pre-COVID and pre-COVID 2020 sales came in at SEK 432 million against the prior year of SEK 456 million. But if we start making the adjustments for the strong SEK, the currency impact had a negative of 10%. Allied offers us an increase of 5%. So if we look at sales on a constant basis, then the sales are actually flat. So good news is we're back to pre-COVID levels. The book-to-bill, if we look at the table at the bottom, we can see that the book-to-bill is looking yet more positive. At the end of Q4 2021, orders are 112% of sales. If we look at Q1, orders are now at 127% of sales. So it bodes well as we'll talk towards the outlook likely it bodes well that this strong demand is set to continue for a while, we think. So if we go to the next slide, we'll look at the highlights for the quarter in terms of earnings. And so perhaps not surprisingly, we were fairly pleased in terms of operating income. For the quarter, we arrived at a final result of SEK 95 million against the prior year of SEK 87 million. So operating margin moved up to 21.9% against the prior year of 19%. Again, a strong result, clearly benefiting from the extra sales, clearly benefiting that we did quite a lot of restructuring during the COVID period in 2020. And again, we don't often talk about it, but the Concentric business excellence tool was used in an extreme sense to make sure that whilst we were restructuring the business, we didn't cause harm, and we've prepared ourselves for the recovery. The cash flow, again, from the operating activities, we're strong, SEK 73 million against the prior of SEK 81 million, and Marcus will talk later. But clearly, as we're going into a stronger growth phase, then even with our very tight management of tight working capital, then we're absorbing some cash into the growth curve. Net debt reduced to a negative SEK 90 million. Again, it gives us a gearing ratio of minus 7% and that includes the pension liabilities that sit on the balance sheet. If we take away those pension liabilities, then our gearing is now down to minus 34%. When we look at some of the changes, note and again, Marcus will talk about it later. But the changes in discount rates that apply to pension liabilities went in a positive direction, giving the company a notional gain of SEK 115 million. Again, if we look at the table at the bottom of this curve, then we can see how Q1, we expect to be not bad quarters, and this then, there's been no particular surprise for us, and it follows the trend that we might have predicted. If we go to the next slide, then I'd like to spend a few moments talking about the strategically important subject of electrication of our world. We know that there is a huge amount of pressure from governments and legislation to reduce CO2. The ambition to get the CO2 neutrality into 0 emissions. We've spoken about it now for really 3, 4 years. As a company, concentric has invested heavily in this sector. We don't see diesel engines for trucks and tractors and construction going away for the next 10 or 15 years, but we do absolutely see that rapid growth in terms of the electric vehicles, be they battery-electric vehicles or hydrogen fuel cell vehicles, clearly, driven by legislation, then the on-highway is the Vanguard. It's making the most progress. But talking to the people that follow Concentric, we need to talk about the off-highway business, we need to talk about static applications. So this slide is telling us that we've now made 15 strategically important press releases about electrification. As we'll talk about later, individual numbers of sales are not dramatic, but the compass is clearly pointing in a very strong direction towards electrification. As I said earlier, in a city, truck and bus opportunities lead our way in terms of EHS, electrohydraulic steering, e-oil pumps for the traction motors, e-water pumps for the batteries, typically. The inner city utility vehicles, the trash collectors, the fire engines and off-highway machines are starting to follow. And again, the new opportunities, brand-new sector for us, energy storage and distribution. The graphic is quite busy, but let me try to take you through the key. Going down the page, we're talking about time, moving to the future going down the page. The color-coding, those pink bubbles, very much looking at the e-oil pumps. And again, those are typically the e-products that go into those large electric motors that push vehicles along, again, whether it's battery-electric vehicle or fuel cell vehicle, the oil pumps are those pink bubbles. If you look at the green bubbles, then we're looking at the electrohydraulic steering, again, taking the engine away from the vehicle requires power on demand for steering. We've made numerous press releases. We're making great progress in this area. The blue bubbles, the electrically-driven water pumps, these are typically, but not exclusively, the pumps that look after the batteries to keep the batteries at stable temperature. So they warm up the batteries when they're cold. They call them when they're trying to overheat and charge and discharge. So again, a good coverage. Left-hand column is truck and bus, as I said, that's leading the charge because there is most stringent legislation in this area and on -- in the cities. The orange bubble at the bottom is quite interesting for us, too. Not a new customer, not a new application. And this is basically diesel engines need to get cleaner too. And this stop-start system that's going on to a diesel engine connect easily is significant. Second column, you see the utility vehicles, trash collectors, fire engines coming through, off-highway, it's significant in terms of we're getting off-highway now and energy storage on the right. If we go to the next slide, it's more words rather than graphics but important. As we said earlier, the trend is set and the trend is set CO2 neutrality and zero emissions. If I could talk about the 5 most recent press releases, then the first one there is the electrohydraulic steering into the U.S. OEM on the battery-electric bus. So we're providing the steering system. By the end of March, again, it was a refuse truck traction motor, the main electric motor leading an oil pump. Coming to April. Again, electrohydraulic steering, again, emergency utility type vehicles, fire engine-type of vehicles. As we came into April, again, there's an electric water pump, again, significant because it was our first off-highway vehicle. And as half of our business is looking at construction and ag, then this is also strategically significant, lower values, but strategically significant. Even yet this week, we had that diesel stop-start pump, basically an oil pump to try to make a diesel engine cleaner, another first application, first customer. If we go to the next slide, the graphics would work. There is an important point that this slide is trying to make, and that is that the contracts that we've announced have now -- even though each one of them on its own had quite small value. We've now announced orders worth SEK 500 million over a 5-year period or based on e-pump technology. And if we then take one more time on the -- to the next slide. The second takeaway point is we're trying to guide our investors. We're trying to guide our -- the people would follow us to say that it's -- this fairly crude yellow splash was important. And what it says is that by 2025, 20% of Concentric's Group turnover will be coming from electrified products. Our base pumps are pretty much the same. Our oil, water pumps, hydraulic pumps, the same, but the electrification, the software, the controllers, the IP that we're building in, the diagnostics that we're providing to our customers and giving our customers a huge access to digital information from their systems is significant. Now if I go to the next slide, then what I'd like to do now is hand over to Marcus.

[Marcus Whitehouse, Chief Financial Officer]

Super. Thank you, David. If we go to the next slide, it could be the quarter 1 2021 market data, a slide that most will be familiar with in terms of its graphic, and pleasing to see what story it portrays. It shows that all of our end regions and pretty much all of our end applications within those regions are showing growth year-on-year. We've seen that recovery continue, as we've touched on during quarters 3 and quarters 4. And that recovery from the global pandemic continues on in the first quarter of this year. As we've already touched on, it's been led by trucks. We first saw that market start turning in quarter 3, and it continued to recover, particularly in Europe during the first quarter of 2021. Also been really pleasing to see that the off-highway sectors have recovered, most notably the agricultural machinery sector, which has been particularly strong during this first quarter of 2021. Market indices again suggest that this recovery will continue on, but obviously, just not at the level of growth indicated within the indices. But for the full year, it is now predicted to be plus 9%, down a little on what they were reporting for the fourth quarter last year, which was plus 12%, and probably reflects some of the supply chain constraints that companies have experienced during this first quarter. Next slide, please. This is a table with our quarter 1 2021 results, looking at our trading performance. David has already touched upon our net sales. Yes, we've reported at SEK 432 million, down from SEK 456 million by 5%, but really pleasing to see within there that our year-on-year sales in constant currency are flat, so they are back to pre-pandemic levels. Really important. On top of that, we've got the additional sales that we got from our acquisition of Allied, which is a plus 5. And then we enjoy or don't enjoy the FX headwind of a strong Swedish Krona of 10%. But saying that, our operating income is stronger than the first quarter of last year, reporting at 95%, up from 87%, so plus 9%. And part of that is the recovery within the market that we are continuing to enjoy. But I suppose just as equally important, it has been the continued strong cost control that we've deployed throughout the business in reaction to the pandemic that is helping us to report a strong margin for this first quarter of 21.9%, up from 19.1% last year. Next slide, please. When we break it down into our 2 reporting regions, geographical regions of Americas and Europe and rest of world, we do see 2 slightly different pictures. Europe and rest of the world has had a better recovery during this first quarter, with sales in constant currency and excluding Allied Enterprises of up 8% year-on-year, whilst the Americas is down 4% year-on-year. Once I've said that, I have to draw your attention to the book-to-bill ratio. In Europe and rest of world, at the end of quarter 4, that ratio was 117%, pretty much flat at 120% by the end of that first quarter, showing that the orders that we've been able to take, we've been able to pass-through into the market in Europe and rest of world. America is a slightly different story. Book-to-bill ratio at the end of quarter 4 was 102%. At the end of quarter 1, it's 141%. So whilst the sales are down, the order intake that we've received during that first quarter in the Americas has been stronger and hopefully will help support and drive out our quarter 2 results. Margins again in both regions, pleasing. Americas is back to sort of normal 15% return on sales, and Europe and rest of world is back at 22%, both up on the first quarter of last year. Next slide, please. Q1 2020 results, cash flow and gearing. Yes, our first quarter, we had a strong operating cash flow reported at SEK 73 million. We count a little bit of extra inventory during this first quarter to help mitigate some of our supply chain issues that we've faced. But again, a really pleasing performance. The net debt is the notable item that's moved minus $90 million in this first quarter, down from $27 million the first quarter of last year, a huge movement year-on-year and explained pretty much predominantly by that pension remeasurement gains against the discount rates. We watch the discount rates drop as we went through the pandemic last year and they bounced back up to a more normalized level in that first quarter. And that has swung our pension liabilities by more than the 5% of equity that we usually judge as a reporting event. So at 8%, we've had to adjust within the first quarter. That's taken that gearing ratio down to minus 7% versus 2% in the previous quarter. Next slide, please. Quarter 1 results, just an analysis now of our cash flow from operating activities and working capital and net debt and gearing. As we touched on good performance, overall, given some of the challenges that we faced, during this first quarter, we still have our working capital at low levels. We're only 0.5% of sales, whilst our net debt and gearing, as we've touched on, has dropped to minus 90 gearing ratio of minus 7%. Also important to state to reinforce this robust financial position that we still enjoy. We have no external debt within the business. And our cash decision that we have on the balance sheet at the end of the first quarter is SEK 578 million, pretty much in line with where we were this time last year at SEK 582 million and up from SEK 505 million from the end of last year. So a good performance, strong margins, some headwinds with our supply chain that we have, but we've been able to convert that profit to cash, maintain our working capital at low levels, and still maintain a good, strong cash position, taking us into the second quarter. Next slide, please.

[David Woolley, CEO & President]

Okay. Thanks, Marcus. So that brings us to the separate slide talking about the concentric view on how Concentric sees Q2 2021. So if we go to the next slide, then we'll see the detail behind the outlook. Hopefully, we've guided you fairly well towards expectation. So it is clear that the economic recovery is well underway. The COVID 2019 vaccine rollout without doubt has helped us. Clearly, we think there is something of an increase in sales of end products like trucks and agricultural and construction equipment we obviously do feel there is some attempt to restock the supply chain that is completely depleted during COVID. We exercised some form of gentle caution. As we spoke about a couple of times in this presentation, the global supply chain is working very hard. And it feels like it's at its reasonable limits, trying to find containers, trying to get on to shipping lines, basically trying to get capacity as of supply base is hard work. Again, I'll complement our team. I think our global team around the world has done a fantastic job to get parts, materials, timing, spaces on ships and freight and to keep our customers moving. We keep a careful eye also onto India as is much reported in the press, the latest wave of COVID is wreaking havoc in that country and us and many other of our customers take a lot of products out of India. So we're working very hard there and keeping a very close eye to make sure that we can keep managing that situation well enough. If we then talk about the market indices, then the indices are quite buoyant. And the indices talk about the market full year will be up by 9%. And again, basically talking about the recovery seen in quarter 1 2020 will continue across the entire 2021. And as we've listened to some of our larger customers, not to try to emulate too much what they're saying, but it makes a lot of sense, some of the supply constraints in quarter 1, which have meant sales went up, but we could have got higher without the constraints, probably that feeds into a more balanced view that what we can't make in Q1 2021 will supplement the other 3 quarters of the year. A positive view. Again, it's a crystal ball, but we can talk about that next quarter. We are expecting that the supply chain tension will remain, but we would like to think that during this quarter, there might be a rebalancing of that dynamic equilibrium so that the supply chain will try to catch up with demand, so some of the extreme measures that we had to do would start to ease back a little bit. And if we talk about the demand for our engine and hydraulic products, again, we expect them to improve quarter-on-quarter. We've said many times before, and it is true in our world. We said that the engine customers are more to do with the leading indicator there earlier in the cycle. So we see engines still strong. Hydraulic products, construction and ag still catching up, still getting stronger. And we expect the demand in the North America to continue to improve during this quarter, particularly off-highway and industry applications for the reasons I just gave is there was a catch-up going on. Key point, the factual point for us, I guess, if you look at the level of orders we received in Q1 that indicate basically the sales that we're going to have in the second quarter will be somewhat significantly stronger than the first quarter. So same rules apply. We are working like fury to get material into the factories and converting them. We are on a program of increasing the number of employees to match that demand, and that's going quite well. So positive outlook into Q2. The final comment, the financial position, as you've seen or heard from Marcus, this financial position for Concentric remains extremely solid, extremely strong, very busy, again, it's very -- looking very busy on the electrification side of our life. And I'm sure that there's more to talk about in the coming quarters on the electrification. But that comes to the end of our scripted part of the presentation. So if we turn to the next slide, we will basically come to that slide that asks for questions, and then we would like to open up if there are any questions out there that we would like to help with.

[Operator]

[Operator Instructions] Our first question is from Mats Liss of Kepler Cheuvreux.

[Mats Liss, Equity Research Analyst]

Can you hear?

[David Woolley, CEO & President]

Yes, Mats.

[Mats Liss, Equity Research Analyst]

Just a couple of questions there. First, I mean, you're talking about the supply chain constraints and so on. And I guess you have had some extra cost during the quarter. Could you quantify them to some extent? Or is it -- I mean, the margins are good, but could it sort of have material?

[Marcus Whitehouse, Chief Financial Officer]

Good question Mats. But I think one that we placed aside, the cost that we are taking on, we are passing through into the end market. So those margins that we've reported are not suppressed in any way with additional freight cost or air freight costs that we've taken into the business. That is being passed on to the end customers.

[Mats Liss, Equity Research Analyst]

And I guess we see a quite substantial increase in raw material costs like steel and so on. Is it something that you will feel during the second quarter? Or are you able to pass those on also?

[David Woolley, CEO & President]

Okay. Mats, in terms of all of our major customers then we have ongoing contracts where we have metal and material escalators. So as metals raw materials increase and we do have a contract that we would again pass those forward at cost. Now in reality, those escalators are reviewed every -- either typically 6 months, sometimes 3 months, sometimes 12 months. So there might be a lag insofar as we're absolutely picking up those material cost increases. But at the next point, the 1st of July typically or 1st of January next year, then those metal escalators are passed forward. So there might be a lag, but we are protected in a very neutral way.

[Mats Liss, Equity Research Analyst]

Good. And then, I mean, the order intake seems to be very strong. And you indicated that sales in the second quarter looks improve. And I guess, is it sort of -- should we expect all of the order book to be delivered? I mean, it's a quite large step change and I guess, is there -- I mean, we have this concern among customers that semiconductors are a problem, especially in the digital trucking -- truck segment. And could it sort of affect this sales for you? Or -- you also indicated there are some sort of safety measures that we tried to restock the supply chain as well. And will that help you? Could you say something about that?

[David Woolley, CEO & President]

I think there's a very high-quality of conversation between Concentric and its customers. It is a fact that in terms of the orders received, that tension in the supply chain is absolutely constraining us to actually achieve what we might be able to achieve this, that tension wasn't there. However, again, it's the intimacy with our customers. We've got an awful lot closer to understand what the customer might term real needs. So we know that they're trying to fill the distribution chain. We know that they can't satisfy all their orders. So the focus is how do we make sure that Concentric is that business that keeps the customer moving even though we are struggling to get every order fulfilled, how do we make sure that Concentric strengthens its reputation as the solution provider that keeps the customer moving. And I'm pleased to say, again, then complements to the team, they've done a great job. So we've got a building order bank. We'd like to shift more, but that will supplement what we do in Q2. And we've got customers who planned a great part of this to make sure that we are sending exactly what they need and sharing in the cost of those expedited expensive freight costs.

[Mats Liss, Equity Research Analyst]

Excellent. And just finally about your sort of progress in this electrification area. Do you feel that you're sort of gaining market share in that area? I mean, could you say something about competition?

[David Woolley, CEO & President]

Okay. It is a very, very busy sector. And again, it's -- there's a time line that applies to all of this as we tried to indicate on highway-first, intercity-first, but the opportunity spreads wider as we look at battery-electric vehicles becoming hydrogen fuel cells, as we look at tractors, as we look at construction machines, as we look at energy stores and distribution. So I will always remain very respectful of competition. There are some very good players out there. And a lot of those bigger players are focusing on passenger car electrification, which is about 3 years ahead of truck and tractor and construction. So we are seeing typically the same types of competitors in the e-sector that we see in our conventional sector, very good players. Do I think we have total market share? Of course, we don't. Do I think we have a good market share? Absolutely, yes. And critical to this, Mats, is that it's our reputation, what is the signature of concentric over many years, and that is products that you will fit and forget, a product that will work immediately out of the box and will deliver absolute reliability. And as a lot of our OE customers who are typically quite conservative because they're constantly looking to protect their vehicles that when they get to the market, they work well. That protection isn't to make sure that the product they put out there is constant. And so what we've done is we've built that reputation very quickly. And I think we've said in the past, our ambition was to produce product that would last for 30,000 hours. Since the launch of that product, we've seen in our applications at 40,000 hours and 50,000 hours. So I think our customers recognize that coming to Concentric, the product will work right out of the box will be fit and forget. So I think we -- I'm very pleased with our progress, and I think our engineering and sales teams are going further, farther and wider and spreading up very good message.

[Operator]

[Operator Instructions] Our next question is from [indiscernible]

[Unknown Analyst]

On your impressive margin improvement, could you tell us a little bit about how much was driven by lower, let's say, COVID cost, lower travel costs, less holidays taken and net debt for that extra cost you took for protecting your employees?

[David Woolley, CEO & President]

Yes. Thanks for the question. Yes, it's down. I can't give you an absolute number on the call as to what it is. But if you look at the numbers that we've got, we have got lower cost overall within our organization. The headcount is down as followers of Concentric will now. We reacted quite quickly to the pandemic last year. We put a SEK 20 million provision into the quarter 2 results. And during quarters 3 and quarters 4, we did some restructuring of the business to take out headcount. So we are starting to enjoy some of that lower cost base that is helping to boost our margin. But again, if you're a follower of Concentric, you'll have seen that we are typically in that range, a margin of 20% to 22% over the last couple of years. So what we're starting to see is our margins normalize there to where we prefer them to be.

[Unknown Analyst]

Okay. And maybe a follow-up on the e-forms. Where is the operating margin in that segment? I guess it's below group average. And where do you expect it to reach, for example, group average? And what kind of volumes do you need to get there?

[Marcus Whitehouse, Chief Financial Officer]

Well, if we take the overall sort of what we call CB1 contribution margins, the margins that we enjoy on the electrification business are broadly in line with margins that we drew on today's business, which is pleasing. There is another aspect to that, which is we are obviously investing heavily into the e-pump market, both from management time and with R&D. That probably means the bottom line at the moment is probably -- well, it is lower than what we enjoy on the rest of the business. We will see that come up over time as the volumes start to come in. That's why we've given that guidance that the percentage of our sales will increase and not linearly over the next few years as more and more of those programs that we will start to come sort of production on stream. And that will lift our bottom line on e-pumps. But in terms of our contribution margins, yes, they are in line with the margins we enjoy today on our mechanical pumps.

[David Woolley, CEO & President]

And I think Marcus explained it quite well. And it's one of the challenges we have in the business, communicating with investors, 15 press releases in quite a short time, individually, because of the volumes on the e-vehicle is actually quite low. Individually, the second is not significant on its own. It is strategic what we're winning but the numbers yet are not life-changing, which is why we keep pointing towards 2025, and this is where legislation really starts to bite in terms of how you measure and report CO2 emission from fleets. So it moves them a nice to do to a need to do. And again, as Marcus has explained, we -- I think we're up to now production line #3, we're looking at production line #4. So it's the expected heavy investment cycle at the start of a significant change to the market. This is quite a sort of a historical movement, as we all know, from the diesel doesn't die, but electrification is going to be born, and will grow quickly.

[Unknown Analyst]

Got it. And on the type of contracts on your e-pumps with the OEMs or customers, are they different than from the conventional pumps? Are there any differences in it?

[David Woolley, CEO & President]

Inform, no, we would typically look at 3- or 4- or 5-year contracts, the thing which is significant is, clearly, we've had to be quite aggressive on the costing, as Marcus said, the margins are okay to the business. But we have to look to the future. You can see more volume coming. We, as a business, are very good at finding productivity and what we're promising to our customers is productivity. So we're quite aggressive pricing contracts. We're working with our suppliers on the same level to say we feel that margins are easily sustainable, but it's what Concentric does well on business excellence. We've set out the challenge. We've promised savings to the customers, and we need to deliver demand track record size that we will.

[Operator]

[Operator Instructions] We have another question from Mats Liss from Kepler Cheuvreux.

[Mats Liss, Equity Research Analyst]

Just a quick question about [indiscernible] positive territory regarding the cash or negative regarding debt. And will this sort of change the share buyback and so on going forward, or do you feel sort of -- this is more a temporary impact of the discount rates and so on?

[Marcus Whitehouse, Chief Financial Officer]

No. I don't think, in terms of a very direct question on buybacks. No, we won't change the overall amount of what we do over the course of the year. We're probably unlikely to do any buybacks during the second quarter. We'll probably be selling shares to sacrifice some of the LTI metrics that we need to do. But we will probably be doing SEK 75 million a quarter during quarters 3 and quarters 4 to get back to the very typical SEK 150 million that we do over the course of a year. So yes, we'll continue on as we've done before, but unlikely to see any own shares that's being purchased in the second quarter.

[Operator]

There are no further questions at this time. So I'll hand back over to our speakers.

[David Woolley, CEO & President]

Okay. Thank you very much. So again, thanks, everyone, who've come on to listen to the call, asking the questions. Again, we're looking for yet more exciting Q2, and we look forward to the next presentation. Thanks, everyone. Have a good day and good rest of the week. Thanks, everyone. Bye now.

[Marcus Whitehouse, Chief Financial Officer]

Bye-bye.

[Operator]

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