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Hexagon AB
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Thank you. And welcome to this Q2 interim report earnings call. If we turn to Slide number 4, we get the overview of the quarter, 9% organic growth and 7% recorded growth. We saw strong organic growth in Geosystems with 12%, MI continuously strong organic growth with 8% and PI 32% organic growth.PP&M recorded 14% organic growth, and that was driven by several large perpetual license orders in the quarter. We saw 13% organic growth in China. So the Chinese growth continues. Currency movements adversely affected net sales by minus 5%. And we also signed an agreement to acquire AutonomouStuff in the quarter.Gross earnings -- sorry, gross margin came in at 62.3%. And that's a record for the gross margin. EBIT margin 24.4%, and a very strong cash flow with 94% cash conversion in the quarter.Moving to Slide 5, seasonality in the earnings quarter by quarter, Q1, Q3 are weak quarters, and Q2 and Q4 are seasonally strong quarters.Key figures, Slide 6. Net sales amounted to EUR936.9 million, which corresponds to the said 9% organic growth, 7% recorded growth. Operating earnings, EBIT1, amounted to EUR228.2 million, and that is 11% better than the corresponding period of last year. Earnings before taxes, excluding nonrecurring item, EUR222.8 million, and that is once again 11% better than the corresponding quarter of last year. Earnings per share, excluding nonrecurring items, also grew by 11% to EUR0.50.I'm going to skip Slide 7, the first six months. And I'm going to go straight to cash flow. Cash flow from operations before changes in working capital, excluding taxes and interest, amounted to EUR294 million. As you can see, we have a slightly higher tax paid in the quarter and in the first half of 2018. And that is linked to the US tax reform.Cash flow from operations amounted to EUR244 million, and that is up from EUR205 million. Noteworthy is that, in spite of 9% organic growth, we have a positive change in working capital of EUR1.8 million.And if we look at working capital to sales on Slide 9, we can see that it's at a record low 12.9% of sales in the second quarter of 2018. And our recurring revenue and software-heavy business model is starting to have an impact on working capital.Market development, if we move to Slide 11, not much has shifted. We are more and more a 3-region company, fairly balanced with 33% in the Americas, 37% in EMEA, and 30% in Asia. China grew to 17% of sales and is now our second largest market after United States.Slide 12, major trends geographically in the quarter, North America more than 8% growth, China, Eastern Europe, Middle East and Africa, and South America all grew at double-digit rates. Western Europe, strong single-digit growth 7%, and Asia, excluding China, also single-digit growth.Slide 13 is for yourself to reflect and study after the call. I'm not going to go through all the arrows and details.So let's move to Slide 14, EMEA. As I previously stated, Western Europe 7% organic growth, and we saw particularly strong growth in Germany and Italy from both geospatial and industrial. Growth is mainly driven by solid development in automotive and aerospace segments, infrastructure and construction, but also public safety solutions that were growing in EMEA in the quarter. Power and energy also saw a return to growth. We saw double-digit growth in Russia and Middle East, which are recovering. And Africa continued to grow strongly.If we move to the Americas, Slide 15, North America recorded 10% organic growth, with strong growth in Canada and United States and slight negative growth in Mexico. Solid development once again in automotive and aerospace. Several new large contracts in power and energy. And if we move to South America, we recorded 19% organic growth. And that was driven by the continuous recovery in the Brazilian economy from very low levels. Brazil recorded 26% organic growth in the quarter.If we go to Slide 16, Asia, China once again had super-strong growth, 13% organic growth. It was strong in all division and business segments. And we saw a continuous good growth in electronics and solid development in automotive. We saw good growth from India. And this is the first time in 2 years we're returning to growth. Southeast Asia recorded double-digit growth, but we saw continuous weak demand in primarily South Korea, but also Japan was weaker in the quarter.Reporting segments, if we turn to Slide 18, Industrial Enterprise Solutions, organic growth of 9% driven by 8% from MI and 14% from PP&M. Within MI, it's noteworthy to see the automotive, aerospace and electronics industry continuing to report solid growth. But also, our software offering was growing fast in the quarter. PP&M continues to recover. 14% is very good growth. And it was generated by several large perpetual license orders and good market traction in North America. Sales amounted to EUR482 million, and the EBIT margin grew to 25.2%.Geospatial Enterprise Solutions on Slide 19, organic growth of 9%, driven by strong organic growth from Geosystems, 12%. We see continuous strong development in infrastructure and construction and solid support from new products and solutions in the quarter. SI, minus 3% organic growth, hampered by continued challenges in our US federal business and tough comparison numbers from last year's safe city orders in China.Positioning, 32% organic growth, and it was driven by strong demand in defense, agriculture and solid growth from the growing presence in the autonomous automotive sector. EBIT amounted to EUR455 million, and the EBIT margin was up to 25% compared to 24.2% the corresponding period last year.Slide 20, gross margin is now at 62% for 12 months rolling, and we also report 62% in the quarter.If we turn to Slide 21, our 12-month rolling operating margin is at 24%. And our target is set at between 27% and 28% for the fourth quarter or the year 2021.Orders and product releases in the quarter, if we turn to Slide 23. Hexagon strengthens its leadership in autonomous solutions by acquiring AutonomouStuff. And we will hopefully consolidate AutonmouStuff in the third quarter. We're waiting for final approvals from authorities.And when we combine AutonomouStuff with our positioning, mapping and simulation technology leadership, we create a nexus of domain expertise in the autonomous industry. And it's going to spread not only to cars, but hopefully into mining, agriculture and construction applications as well.Slide 24, we acquired NEXTSENSE in the quarter. And this is an Austrian-based inline automated solutions company that deliver immediate high accurate measurement values free of operator influence.Slide 25, we also acquired SPRING Technologies, a France-based software company that is specialized in machining simulations. And it's essential to be able to do machining simulations to connect the physical world with the digital world and achieve finally autonomy in the factory floor. And this is, of course, imperative if we want to create smart factories.Slide 26, we launched RTC360. And this is a little revolution because this scanner will automatically register any movement in its location as it captures data, which means that we can stitch scans together automatically without any manual intervention. And it's going to save a lot of time for operators in the field wanting to scan 3D realities.Slide 27, we launched another industry-first solution in our BLK line from Leica Geosystems. And this is a device that takes pictures, but with these pictures, you can take 3D measurements with professional grade accuracy within the picture. We're going to launch it in October. We have preannounced it at Hexagon Live in June.At Hexagon Live, we also introduced Xalt, if you turn to Slide 28. It's our framework to achieve digital transformation. It's our IoT platform, [which is our wish]. And we're building in enterprise integration with other software platforms, Cloud orchestration, visualization, mobility and edge connectivity. And we're also building artificial intelligence modules for specialized verticals within this framework Xalt. And it's starting now. We're going to roll it out into all Hexagon's divisions. And it's going to be our de facto standard to communicate in the future.Slide 29, improving shop floor productivity. We launched the BLAZE 600 in our MI division. It's a shop floor measurement device that is using blue light LED illumination on the component you want to measure. So in this picture, you see a car door being measured with blue light LED.Slide 30, we got an order to coordinate railroad safety, accuracy and efficiency. And it's our new product SafeLoad that is used to measure risk when you transport high-value loads on railroads. And in this example, it's electrical transformers that are being shipped by Kansas City Southern Railroad.Slide 31, improved communication beneath the surface. Our mining division launched MineOperate Underground Pro. And this is a platform, software platform, that is managing underground fleet equipment and broadcasting time utilization information instantly in remote areas deep below the surface. And the launch of this product brings us one step closer to create the autonomous mine, where we're linking planning, scheduling, dispatch with all underground or overground mechanical systems and human assets to optimize all tasks in a mine. And in the quarter, we got 2 orders for this new product, one from Fresnillo and one from SLN.Slide 32, we've launched several new products in our Ground Penetrating Radar product family. And Ground Penetrating Radar is seeing what's underneath the surface or in structures. So Italian State Police purchased several units to use to fight crime and organized terrorism. And basically, what you can do with -- you can locate objects buried in concrete structures to support and find objects that look suspicious. And the State Railway of Thailand is using it to scan infrastructure, such as this bridge.Slide 33, our computer-aided dispatch solution was chosen by Hyderabad's police force. And they're now going to install that system to modernize its distress response system.Slide 34, instant lane-level accuracy for autonomous automotive programs. Since 30 years, we've delivered correction services for GNSS or GPS applications. And we have a worldwide redundant network that we've built over these 30 years. And we launched our latest correction technology TerraStar X in the quarter. And it's built on something called Precise Point Positioning. And these algorithms enable you to position vehicles within 5 centimeters accuracy using satellites under a minute and allow automotive customers to evaluate positioning performance in real time of autonomous cars and traffic. And this is a prerequisite to have autonomous traffic.Slide 35, we launched Hexagon SDx. And this is the latest product from PP&M. It's a modular Cloud-based asset lifecycle solution that optimize the efficiency and improve the decision making throughout the life of an industrial facility. If you so wish, it creates and maintains what we call the digital twin.Slide 36, we are gaining traction within the PP&M division with owners/operators. And that is precisely what the SDx product is aiming at. In the quarter, we got an order from SOCAR, which is a Turkish company. And they're going to implement it in their Aegean Refinery STAR.And that was it for the quarter. So if we summarize the quarter, strong organic growth in most of the businesses and geographic regions, Geosystems and MI 12% and 8% organic growth, PP&M 14%, China 13%. Record earnings and a robust cash flow. And we signed agreements to acquire AutonomouStuff, strengthening our leadership in autonomous vehicles or autonomous mobility.And with that, I've finished the presentation. And we are now ready to answer questions. So operator, we can go ahead with the Q&A.
Guillermo Peigneux from UBS. It's regarding 2 particular items in the result or 2 particular divisions. One, PP&M, large orders in there. And I wonder whether we should see an increasing amount of revenues, revenue mix actually from PP&M contributing to the second half of 2018 and hence a positive margin contribution from that business. And then I have a second question, but I will follow up after your answer.
Yes, hopefully, we will continue to see good contribution from PP&M in the second half.
And would that be positive for margins, or at the moment, the margins are at the same level, or PP&M will contribute entire --
Yes, right now, the margins are at the same level because we have invested in personnel in the second quarter to expand SDx SMART Build, EcoSys and other new products that PP&M is working on. But over time, of course, PP&M is going to contribute to margin expansion.
Then the second question, and I'm sorry, but I have to ask, is regarding obviously the smartphone and semi cycle. Obviously, some of the, let's say, not peers from you, but Japanese players within the electronics and smartphone markets are just at the moment feeling a little bit of a weak patch, softness in the market. And I wonder whether you have an outlook for the second half when it comes to smartphone and semiconductor spending into your businesses.
We are penetrating our current accounts deeper. And that's why we continue to grow in our electronics segment. It's not necessarily linked to the fact that our customers are selling more product.
So on your existing, let's say, like-for-like business, penetration, is it weaker already?
No, we've penetrated further. So we have a much better penetration this time than we had a year ago. And we continue to penetrate these accounts. But you shouldn't link Hexagon's activities to the fiscal volume of mobile phones sold in the market. We are not linked to volume of phones sold.
Yes. And last one, how much of the automotive business was -- especially in China, was related to electric vehicles, if you have any thoughts on that.
No, I don't from top of my head. But China is probably the strongest country when it comes to developing new electric cars. And we have several automotive players that are developing electric vehicles, companies that you might not have heard of in Europe or in America.
We will now take our next question from Stacy Pollard from JPMorgan.
Two questions from me, please. How sustainable is the Geosystems double-digit growth? The comps do get a little bit tougher year on year as you go into Q3. But then also, you have launched new products. So that would be the first question.
Well, we'll see. It's a very good environment for Geosystems right now. We happen to have launched a lot of new products that are received very well. And that coincides with a very strong construction cycle. So well, we'll see.
That sounds like a good environment and not too worried about the year-on-year comps then maybe.
We'll see.
My second question is just on the M&A front. Where do you see the most interesting opportunities? You've obviously got interested in autonomous connected systems. Are there some gaps to fill there and then other opportunities elsewhere?
No, you're absolutely right. We had to come up with a phrase to talk about digitalization because digitalization is meaningless unless you automate and save money. So we came up with this phrase autonomous connected ecosystems. And smart factory and automated factory is an autonomous connected ecosystem. You don't need human intervention. And to resolve all the issues that you need to resolve in order to automate a manufacturing line, there are still gaps to be filled. And the same goes for the other verticals that we have targeted and made strategic, like autonomous vehicles, smart cities and so forth.
So would you say that you're on target to -- I forget exactly, but to give us 4% to 6% revenue growth through acquisitions?
We'll see. I believe that we will reach our target this year as well. But we'll see what happens in the second half.
We will now take our next question from Adam Wood from Morgan Stanley.
Maybe just first of all, focusing in on the acquisition of AutonomouStuff and then thinking a little bit more generally about autonomous cars, you've obviously built a very strong portfolio there. I think what I'm a little bit less clear about is the business that you're currently doing with the car and technology companies. Could you maybe just give us a little bit of a feel for how you're positioned maybe with the traditional automotive vendors with some of the technology companies and maybe a feel for whether you think decisions have already been made in this area in terms of what technology is being used or whether it's a completely open market for companies to come in and deliver? That would be the first one. And then maybe kind of a follow up to Stacy's question. Could you maybe just help us a little bit with the phasing of the hardware launches this year versus last year? So if we look at -- I imagine RTC360's probably going to be the main one. When is that really going to have an impact on the business? And when did the product launches last year impact the quarters, just to give us a feel for what impacts we have through the quarters to the back end of the year?
I think, if I start with the second question first because it's fairly easier, BLK3D is going to be launched in October. So we're going to see the lion's share of the impact from -- and RTC360's backend loaded as well as some of our other products from other divisions. So I think it's fair to say that we're going to have a comparable situation to 2017, where we are going to see growth from new products in the third quarter, but the lion's share of growth is going to come in Q4.
Perfect. That's helpful.
And then if we move to AutonomouStuff, I would say that the industry and all players playing in this new emerging industry, and you really have to differ between the OEMs, the tier 1, traditional Tier 1 suppliers, the semiconductor players and the technology players. Those are the main people involved in autonomous vehicles. I would say that they've honed in on most of the solutions, and the concepts are set. But that doesn't mean that individual components of a system could change as we reach maturity.
If those decisions have been made, how well positioned do you think you are with the technology companies and with the automotive companies that are going to be delivering these vehicles?
We are involved with everyone more or less that is active in this area. So I think we have a fairly well-balanced position in the market.
We will now take our next question from Mikael Laseen from Carnegie.
Yes. Going back then to PPM, the large contract you got, I'm just curious to know how -- where you got them and how large they were in the quarter, how much they contributed with.
We don't comment on individual contracts, but it's fair to say that we would not have grown 14% without them. We might have grown double digit, but --
Okay. So still double digit without those large orders.
Yes, in the quarter, and it was mostly North America that was strong, but we also saw China actually.
Okay. But is this sustainable, the growth rate that you had in the quarter? You had 1% in Q1, and of course, if you compare this, but I expected more contribution from the large contracts than only 3%, 4%.
I think that we don't comment on growth going forward. But we have said that 5% is the organic growth we expect between 2016 and 2021. And it's fair to say that 2018 is definitely going to be above those average 5%. It's a very good year. And I see no reason why we shouldn't have a continuous good year in the second half.
Okay. Great. And my second question is regarding the geospatial segment growing by 9%. But the different parts suggest that it should be a bit better. Are there anything else there which is not growing maybe that much or if you can share the split of revenues per segment, new systems, S&I and so on?
No, it's SI that is having a tough time, and it's linked to the federal business that is not doing very well in North America, unfortunately, and that's how you get the bids together. So Geosystem 12%, PI 32% and then SI very weak.
We will now take our next question from Mohammed Moawalla from Goldman Sachs.
Great. Ola, just on PP&M, just curious to maybe understand some of the scope of the engagements. Do you think that this is more sort of structural digitization efforts by the oil companies, or is some of this more the kind of classical rebound in -- as oil price comes back, reactivation in project activity, and therefore, just trying to understand the kind of sustainability and longevity of the growth. And then secondly, just can you give us the growth at MSC and why the simulation portfolio, how that did? I may have missed it in your opening comments.
No, I didn't comment on MSC actually. No, if you take PP&M, I think it's a bit of everything you mentioned. It's definitely rebound business in the oil and gas sector, but it's also new business. We're launching EcoSys in other regions of the world than North America, and that is helping growth. And of course, there is a healthy discussion around digitalization. And that has also led to orders, but I think I would say the lion's share is a rebound of the business, what we see right now.
Great.
And MSC grew by 8%.
Great. And that's organic standalone MSC growth, right?
Yes, organic.
We will now take our next question from Erik Golrang from SEB.
I have 2 questions. The first one is on the mix, the mix in geospatial. Looking at sort of PI had the highest growth, and then Geosystems and then SI on the negative side. But I thought that will be quite positive for the margin, but the base of margin expansion is held back a bit. Is there anything particular going on there as well in terms of investments in new sales and R&D resources?
Well, in general, we have invested across the board in R&D and sales. That goes for both segments. And it's going to be a patchy road, where we're continuing to reduce admin and continuing to expand sales and R&D because we're shifting business model. So it's going to be lumpy quarter by quarter.
Very good. And then 2 questions on -- you said autonomous solutions contributing to the growth rate in PI. Is TerraStar X already contributing there? And then the follow up to that I guess is a stupid question. But you say under a minute positioning. Is that really real time? I would've thought the vehicle could travel quite a distance in a minute.
No, what you do [indiscernible]. It's -- those systems are -- you could call it in combination with the pure satellite signal. So it's not -- you're not just relying on these land-based correction services to generate your positioning. And you acquire your position much faster. One minute could be a disaster if it took -- if it was a latency of one minute. But after one minute, you have full contact with all these systems. And then you're not only relying on satellite positioning. And just to make you feel safe, autonomous cars will not only rely on GPS to position themselves. They will still have local sensors, like lidar and radar sensors, to just make sure that you're not bouncing into something. TerraStar X has contributed in the quarter to growth, still our major businesses within surveying, agriculture, construction and marine activities for the TerraStar correction.
Does that answer enough?
Yes, covers it.
Great.
We will now take our next question from Mattias Holmberg from DNB.
My questions have actually already been answered. So I can just go to a sort of housekeeping question. Looking at the FX impact, there are 2 parts I'm a bit curious about. I know that the PPM subdivision has quite large share of sales in US dollars. And the US dollar is still weak year on year. So could you just give any flavor on how the FX impact on the PP&M has sort of impacted the drop-through of the margin, as with a strong organic growth, I would've expected a bit more? And then also on FX, Swiss franc again down quite substantially year on year. Could you just give any flavor on how much this helps the EBIT, please?
Swiss franc helped the EBIT by roughly EUR5 million in the quarter. So that was helpful, and the other currencies had a negative impact of EUR16 million altogether on the EBIT line, so negative EUR11 million in the quarter from currency. The US dollar has had an impact, but it's fair to say that, when it comes to the incremental margin, we have invested in local currencies in PP&M to support the new products that we're launching. So you did have a lower incremental margin in PP&M than you might have expected in the quarter.
We will now take our next question from Alexander Frankiewicz from Berenberg.
So I know quite a few questions have been asked on PP&M, but I just had a couple more. Was the recovery mainly in upstream or midstream, downstream? And was there -- if you could quantify the contribution from SMART Build or EcoSys? And then also on PP&M, I was just wondering what the -- your runway was for growth on SDx and its relative positioning against peers. And then just on free cash flow --
Sorry, that's a too detailed level of questions. We're not going to comment on individual product lines within a division.
Okay. Okay. That's fine. And then just finally on free cash flow, why was it flat in Hi, considering revenues grew pretty substantially and margins improved?
Was it flat in H1?
I think so.
I don't think so.
Okay. I can check that. But then just on PP&M, if we could just have a little more detail on where that recovery came from and then any contribution from SMART Build or EcoSys?
No, no, we had contribution, good contribution from both SMART Build and EcoSys, and primarily EcoSys that is now gaining traction. And as we state in the report, North America, China were strong and certain markets in Europe as well.
Okay. Perfect. And then was the recovery from upstream, midstream, downstream?
We are primarily focusing on downstream, whilst some of our peers are more focused in upstream.
Okay. And then also just finally on outlook for growth in H1, considering a tough -- the comps get tougher, are we expecting relatively flattish growth or more up?
We'll see. And your -- I can comment on your cash flow question. We had -- if you look at the first half, in Q1, we had negative working capital development on the back of a very strong Q4. And then we've started to see investments in tangible assets that are linked to our China and Calgary investments that we concluded actually in July. So we warned about that already in Q1, that tangible -- investments in tangible assets is going to grow in the second half due to the Calgary and the Chinese investments. So those are the 2 main points that explains it. And then you have the impact of taxes paid that you have to keep a look out for this year.
We will now take our next question from Alex Tout from Deutsche Bank.
Yes, Ola, I think it's probably fair to say that investor concern's in the market currently on sort of cyclicals, industrial-focused names is that maybe the cycle is peaking and also the potential impact from tariffs. Based on your order book and pipeline, do you feel like demand can't get any better? It seems like construction's very strong. Aerospace and automotive was strong this quarter certainly, or do you feel like there's potential for some business units to accelerate further, obviously thinking of PPM, but anything else that you would call out? And also, just on the tariff question, any suggestion that there's been an impact on customers' investment decisions from that? And then just a quick follow up after that.
I think that those are important question that you raise. And of course, business is cyclical. And these are very good times for anyone that is doing any kind of business I guess. I think it's green lights in most segments, spanning from automotive, aerospace to construction and infrastructure. Whether we're at the peak or not, that's not for me to say. I think you have to ask the economists where we are in the cycle. And then what was your second question again?
So it was whether you've seen any impact from tariff, this whole tariff question, whether that's affecting any customer investment decisions.
It hasn't affected any investment decisions up until now. But it's cost us EUR400,000 in the quarter. And we monitor this carefully. And hopefully, everyone will come to their senses. But the global economy might change where we will see a much more regionalized economy. And we are mitigating this by putting more and more local resources primarily in our R&D in the 3 main regions, Asia, Europe and Americas.
That EUR 400K cost, is that a raw materials input type cost? Is that what that's come from?
It's the cost of the tariff in the second quarter. So it's small numbers. And we haven't really been affected yet. But we are making strategic plans to mitigate the risk of a complete shutdown between the trading blocks. And I think anyone that is running a global business needs to carefully look into what these steps mean for their business to avoid the business being harmed.
And just finally, you're normally about 50 to 100 basis points higher on operating margin for the full year than you are at the half year point. Is there any reason to think that this year will be any different? I guess PPM slightly lower incremental margin than we're expecting. However, is there an element of getting some leverage on those investments in the second half and any other puts and takes that might mean you're towards the lower or higher end of that what normally is a 50 to 100 basis points difference?
That's an interesting question. And the one who lives will see.
We will now take our next question from Wasi Rizvi from RBC.
Just one left for me actually. On -- and apologies if this was covered at the start and I missed it. On PP&M, you mentioned that there were several new large perpetual license orders. Now does the perpetual element, is that just reflecting the products that you were selling, or was the fact that these are perpetual licenses something that was a peculiarity of the order with that customer? I'm just trying to understand whether there's -- customers are trying to negotiate perpetual licenses over recurring annual licenses.
No, it's just the nature of the beast. And with the recovery in the market, you will see perpetual licenses grow again.
Right. And then -- and is that a particular product or an industry within PP&M that is more perpetual licenses which is coming back, or --
No, it's just policy within those customers. Some want to buy perpetual licenses. Other want subscriptions. And we try to accommodate what they want.
We will now take our next question from Max Fryden from Danske Bank.
Yes, just a follow-up question on the PPM. Regarding the investments made in frontend personnel related to the SDx and SMART Build launches here, should we expect these investments to gradually increase throughout the year as some of these products are being launched later in the year, or is the lion's share already taken?
I think it's fair to say the lion's share is taken. But we're obviously going to do add-on investments over the planning period, which stretches until 2021.
All right. And just maybe you answered this already, but regarding SMART Build, the product launch there, is that expected for Q4 this year? Is that correct?
No, we're not having a product launch. We're having 3 pilot projects that we're running with large companies. And that's ongoing.
All right. Fair enough.
So it's not a date where we launch a product.
Yes, but then you could expect sort of a full ramp up later this year.
No, I think SMART Build, the software doesn't have a launch like -- I think the launches we've talked about in this call have been more the hardware launches that we did in connection to Hexagon Live. And that's what you should expect ramp up in Q3 and Q4. When it comes to software, when you launch a software platform, it's a much smoother launch from a financial point of view than when you launch the hardware system.
Right. So maybe I ask it another way. So when will you sort of move out of just doing these pilot projects and sort of go out to a broader audience on SMART Build?
I think we have a platform that is functional and contributes value to the construction industry 12 months from now, where we're going to see contribution that is meaningful.
That's what I was asking for. Excellent.
[Operator Instructions] There are no further questions at this time, sir.
All right. And then we conclude this conference. And thank you for calling in and listening. And we'll do this again next quarter. Thank you. Bye.
Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.