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Hexagon AB
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Thank you and welcome, everyone, to this interim report earnings call for the second quarter of 2022. And if we turn to Slide number 4, overview of the second quarter.
Recorded sales increased by 20%. Organic growth was 6%, and we saw continued strong business momentum. All divisions recorded growth. And we were still suffering from the strained components supply, which hampered growth by 6%. We're expecting a resolution of the supply chain pressure by the end of the year. In spite of that, we record a record gross margin at 65%, and our adjusted operating margin came in at 29.4%.
Now this is obviously a reminder, as always, on Slide 5. Q2 is a strong quarter, Q4 is our strongest quarter, and there is no reason to not expect this seasonality in profit over the quarters for '22 as well.
If we then move to Slide 6. This is an overview over the P&L statement, and invoice sales came in at €1,289 million before revenue adjustments related to acquisitions in the quarter.
I would like to skip Slide 7, which really is year-to-date, and move to cash flow. There are really only two things to point out. It's a very strong cash flow, but, as you can see, taxes paid in the quarter were €42 million higher than last year. And we also had a release in working capital but not as strong as this time last year. Cash conversion amounted to 88%.
Slide 9, working capital-to-sales. Working capital-to-sales is at 6.1% for this quarter, and we see a continuous positive trend in the working -- long-term working capital release.
Market development. If we go to Slide 11, we see the same mix per geographic region where we've seen some significant changes. North America is now our largest region with 34% of sales, and we also see the impact from the war in Ukraine on the rest of EMEA, which has shrunk from 8% to 7% of sales.
Moving to Slide 12. This is just an overview how the geographic regions fare, where we see strong growth in Asia, excluding China. South America also reporting strong, double-digit growth. North America, Western Europe doing fine. China is reporting 1% organic growth. And then we see primarily the impact from the war in Eastern Europe, Middle East and Africa.
Then Slide 13, the so-called arrow slide is for your reference, and I am not going to comment it in any detail today. So I suggest we move to Slide 14.
EMEA. Western Europe recorded 7% organic growth. We saw strong, double-digit growth in Nordics, Germany and the U.K. And we saw continued strong demand for surveying and reality capture solutions in Western Europe, solid growth in aerospace, power and energy. EMEA excluding Western Europe declined. The primary reason for that is the war between Russia and Ukraine, where we have ceased sales to Russia. Eastern Europe and Middle East recorded strong organic growth in the quarter.
If we move to Slide 15, America. North America saw 7% recorded organic growth, solid growth across most industries. United States report 10% organic growth, whilst Canada reported weak growth due to delays in the imagery program. South America, solid, double-digit organic growth. Strong growth in the Andean countries from mining, but we also saw agriculture, power and energy growing. 35% organic growth from South America.
Moving to Asia, Slide 16. China recorded 1% organic growth. We saw good growth in general manufacturing and aerospace, but we also saw that the lockdown and availability issues in our infrastructure-related business hampered the Chinese organic growth. Both Korea, Japan and India all recorded good growth in the quarter, and it's supported by solid demand for surveying and manufacturing solutions throughout the region. In Southeast Asia, Indonesia, Thailand, Vietnam saw strong, double-digit growth as well.
Moving to reporting segments, slide 18. Geospatial Enterprise Solutions reports 7% organic growth where Geosystems report 8% organic growth and the Safety, Infrastructure & Geospatial 1% organic growth. Autonomy & Positioning came in at 6% organic growth, and what's happening is that we see strong demand across all industries for Geosystems. We do see growth for our dispatch solutions in safety and infrastructure, but we see weak demand from defense. In Autonomy & Positioning, we see strong growth in both agriculture and the recovery in our marine business. Sales came in at €650 million and EBIT at €206 million, which corresponds to an EBIT margin of 31.6%. We saw positive impact from volume growth and currency movements in this segment. But we continuously invest in new product launches and marketing, and this is also where we have most of the impact from the component delays that had an adverse effect on margins.
Moving to Industrial Enterprise Solutions, Slide 19. Organic growth, 6%, where Manufacturing Intelligence report 6% growth mainly driven by strong demand in the Americas and solid business momentum in aerospace and general manufacturing across the world. Asset Lifecycle Intelligence, previously called PP&M, report 5% organic growth. And we see growth in design software from EPCs in the quarter, Asset information, cybersecurity solutions also grew. We reported sales of €638 million and an EBIT of €178 million. And here, we saw an improved EBIT margin of 1%.
Slide 20, gross margin. Gross margin for the past 12 months is now at 65%. And if we move to Slide 21, we see that EBIT margin is at 29%.
M&A, orders and product releases in the quarter, if we go to Slide 23. We announced the ETQ acquisition, and we consolidated ETQ for the first time in Q2. ETQ is a leading provider of SaaS-based so-called QMS, quality management software, and EHS, environment, health and safety software, and compliance management software. It's going to be consolidated into our Manufacturing Intelligence division and was consolidated as of April 1.
Now Slide 24. We saw a lot of new products being launched at HxGN Live in June. We unraveled the new BLK360, which is an ultrafast 360 laser scanner, dramatically improving reality capture with its speed, portability and ease of use. We also launched Leica Pegasus, which is a mobile mapping solution; and also Chiroptera-5, which is Bathymetric LIDAR, which we, among other applications, used for our project in the Bahamas to save the seaweed beds.
Slide 25. We also announced the acquisition of Innovatia Accelerator Inc., which also is the SaaS-based digitalization solution that transform operations and modernize fieldwork in manufacturing and process industries.
Slide 26. We also realized the full potential of smart sustainable manufacturing with the launch of our new platform, Nexus. Nexus is a new open platform for smart manufacturing solutions. It's designed to connect siloed engineering and unlock manufacturing innovation. And we're going to see a lot of development in Nexus in the years to come.
Slide 27, JCB, the British manufacturer of construction and agriculture tractors, they have decided to integrate smart advanced precision agriculture technology featuring our GNSS smart antenna receiver and our TerraStar correction services.
Slide 28 is an interesting project where we worked with Ford, and we created a Ford Transit by-wire R&D platform, which uses Hexagon's autonomous software stack to create a fully autonomous delivery system.
Raise3D, Slide 29, is a Netherlands-based pioneer that is using our mobile mapping solutions to create 3D environments all across the country of Netherlands.
Slide 30. We saw continued demand for Hexagon's OnCall suite. This quarter, we delivered OnCall to Panama, the city of San Miguelito and also to the canton of St. Gallen in Switzerland. We also started a collaboration with Xona Space Systems. This is an aerospace start-up developing precision navigation and timing systems in Low Earth Orbit, so-called LEO. And they will use our PNT solutions, PNT stands for positioning, navigation and timing, in their new constellation.
Slide 32. We also present a new solution for cloud processing of ground penetrating radar data. This is used for location of utilities, underground utilities. And it's a company called AiMaps that is creating a new SaaS-based solution to document underground utilities and basically raising productivity when you improve or maintain underground utilities. And they are using our ground penetrating radar and our HxDR software platform to create their service. Advances in measurement while harnessing the energy of the sun, Tewer Engineering, a company in Spain specializing in solar energy, now they have improved their quality inspection effectiveness of their solar panels by using Hexagon's Absolute Tracker ATS600.
On Slide 34, we had several industrial design and workplace safety wins in East Asia. Toyo Engineering Corporation of China bought Smart 3D, and Hanwha TotalEnergies Petrochemical in Korea is standardizing on Hexagon's information management solutions to support workplace safety and operational sustainability.
Slide 35. Digital transformation abounds across the asset life cycle in Americas. We've got several orders in the quarter from the Americas in digital transformation of large industrial assets.
And with that, we concluded orders and releases in the quarter, and let's talk a bit about our organization.
We announced on the 27th of June that I will step down. And as of year-end, I will be replaced by Paolo Guglielmini to be appointed the new President and CEO of Hexagon. We'll see if it's the 31st of December or the 1st of January, but -- and MSAB, our principal shareholder, has, together with the Nomination Committee, the intention to promote me as new Chairman of the Board at the AGM of 2023. Gun Nilsson will step down as CEO for Hexagon at the same time.
And furthermore, on Slide 38, we also announced that Joshua Weiss will replace Paolo as President for our Manufacturing Intelligence division and also that Michael Ritter will assume a new senior role as President for our off-road autonomy portfolio, overseeing our Autonomy & Positioning division, our Mining division and our Agriculture division. And in connection to that, effective October 2022, Maria Luthström, currently Head of Sustainability and Investor Relations, will succeed Michael Ritter as President of Autonomy & Positioning.
And with that, I think we have reached our Q&A session. So with that, I'd like to conclude this presentation. And if there are any questions, we are open for answering those. Thank you.
[Operator Instructions] The first question we've received is from Kathinka de Kuyper, JPMorgan.
A few from me, please. First of all, can you comment on the visibility you have into the second half and 2023 given the challenging macro backdrop? Obviously, you had mentioned six points of headwinds from supply chain challenges both in Q1 and Q2. So that must provide some additional visibility, right?
Now we don't comment on the visibility because that would be giving forecasts, so.
Okay. And then have you seen any changes in customer behavior during the quarter? For example, have sales cycle been getting longer? Or have you seen demand accelerating, for example, for cloud as customers prefer OpEx over CapEx in an environment like this?
No, we haven't seen any changes in the second quarter. Second quarter is very similar to the first quarter. And your second question was on cloud versus on-prem or...
Yes. Would the macro backdrop kind of accelerate the demand for cloud?
No, I don't think so. I think you take a decision to have a cloud-based software based on the benefits of having a cloud-based software. I think that trend is continuing, that we see more and more cloud-based solutions regardless of the business backdrop.
Okay. And then a final question from my side. On margins, troubling events coming back in this quarter. Would you say you're back to a more normalized level of expenses?
Yes, we are. What happened in the second quarter is that we saw increased activity in traveling, we saw increased activity in trade shows and so on. For example, we hosted our big conference in Las Vegas, which is not free of charge. So I think that is what we saw happening in the OpEx line.
The next question is from Daniel Djurberg, Handelsbanken.
Now to my questions here. First, on the components hurdle that we saw in the first half. Can you comment if it's any new areas or is it similar to what we saw in Q4, Q1? And also, on your order backlog, if it's -- you stated it was a record level Q4; I think Q1 as well. If it's holding up for second half.
Now it's very much the same story as in Q1. We see most of the problems in geospatial and primarily with Geosystems but also a bit in A&P. We have some minor issues in other businesses, but those are contributing with the lion's share of the lack of components.
And on cost inflation, obviously sales expenses was up quite much, but you had HxGN Live and so forth. And -- but on the increase, how to think throughout the year. Do you have any stepwise increases or -- and also on -- the number that you saw obviously have an FX structure and part of it organic. But is it possible to give any view on the inflationary part of the organic growth of the cost -- on the sales expenses, sorry?
Yes, I think the way I analyze the quarter is that I am very impressed with the gross margin increase, which shows a healthy business development. Now had we been able to supply the products we booked in the quarter, obviously OpEx-to-sales would have been significantly lower. So at this stage, we're not particularly concerned about the OpEx increase that we see because we know that we're starved for higher volumes. Now that might change if we enter into a recession next year. But right now, we're actually quite happy with the cost development.
Perfect. And my final question, if I may. You had soft performance in public safety. I think it's 3% of total revenue now. Can you comment on the structure? And could you -- would it be fair to assume that some parts of Hexagon could be performing better outside of the group? For example, like -- so, say, of course, more focus on a certain part of the company? Or is that wrong for thinking?
No, I think the utilities and public safety business is performing very well. But then we have a legacy business with contract work for the U.S. defense, which has been a lag for that division since we acquired Intergraph. And unfortunately, right now, it's a drag on the overall numbers.
That's fair. And any view on the structure? You do a lot of acquisitions, but could it be -- is everything as you would like it to be going forward in terms of structure for the full company?
No, I think we've been open, and I think we've also flagged that externally, that we have roughly €100 million worth of business that we would consider selling if we find the right buyer. And it's actually equally spread between geospatial and industrial.
The next question is from Alexander Virgo, Bank of America.
I trust you're well. I wondered if you could just give us a little bit more color around dynamics on the ground in China, particularly, I guess, with respect to construction and residential property markets. And then broadly speaking, can you just talk a little bit about how things have reopened? And I guess maybe quick comment on your bumblebees given that the ability for you guys to deliver growth in China over the last couple of quarters has been pretty impressive. So I wonder if you could do that for us.
And then second question would just be around the dynamics of demand in terms of oil and gas in what is now ALI. And I'm thinking also about the sort of status of integration with Infor and how that's progressing.
Wow. Let's see if I got it all here. China is interesting. We have a super efficient organization, and we're very proud of our Chinese organization there. Indeed, bumblebees, and you see that primarily on the industrial side where they managed to land order after order in a very tough environment where, for example, the city of Shanghai has been closed for most of the quarter.
If we move to the construction sector, we took the deliberate decision to down-prioritize midrange total stations in China in favor of other regions because we simply couldn't -- we couldn't produce enough, and that has obviously been hampering our construction sales in China. Now we gradually see a reopening, and hopefully the second half will be a little easier on the Chinese market. And yes, that's what we hope for.
And then if we move to your oil and gas question. We do see a much more positive environment in discussions with EPCs in the oil and gas industry where it's a combination of the war in Ukraine, which is putting pressure on supplies of oil and gas products, which will spur investments in that sector, and then it's a recovery -- a general recovery in the market. So we are cautiously optimistic on oil and gas.
And when it comes to Infor EAM, we had our first orders where we combined Hexagon products and EAM products in the quarter. So we're basically following plan in that integration.
The next question is from Joachim Gunell, DNB Markets.
So we touched upon Infor EAM here. So with regards to ETQ then, can you provide a bit more color here on how that integration is going and perhaps the underlying growth rates organically of both Infor and ETQ?
Yes. Now SaaS revenue -- they're both SaaS companies with growing, strong double digits for both in the quarter. And the integration of ETQ has gone remarkably well even though it's only 3 months. We already have synergy projects between Hexagon and ETQ. And as I just mentioned, EAM is also booking -- it's both synergy projects in the quarter. So I would say they both helped Hexagon overall to deliver the results we deliver today.
Great. And from a broader perspective in terms of the whole Hexagon Group, can you comment a bit on any, say, timing or plans for, say, a more comprehensive, say, SaaS transformation that is replacing the...
Sorry, I can't hear you. Your line is very bad.
Sorry. Can you hear me now? Okay, I'll just jump back in the queue.
Then we go to the next question. It is from Erik Golrang, SEB.
I have two questions. The first one on the drag on growth from the supply chain being as constrained as it is. Should we think of the accumulated impact? I mean, I think it was 2 percentage points back in Q3, and then it's been 6 the last couple of quarters. Is that the rate -- do you put them all together and say there's 20 -- the equivalent of 20% of sales that you haven't delivered over the course of this period? And what you said there about [Indiscernible] with your comments on the situation expected to be resolved by year-end, I mean, it's -- on paper, that sums up to a quite significant backlog release.
Yes. I mean you can't add quarters together because what happens is that you delay, let's say, Q1 deliveries that are late, that were supposed to be delivered in Q1, they are delivered in Q2. But then you missed deliveries for Q2 that had pushed into Q3. So you should really look upon it as an accumulated number that we have to work our way through. But the problem is that these businesses that are now building backlogs typically don't have backlogs. They can deliver overnight if needed. So it's a unique situation to have a backlog in this business. But I don't know if that answers your question or...
Yes, I guess it does to some extent. But that means that there's sort of the net impact. I mean if it rolls over, it's late 1 quarter, then also over to the next. But then there's additional delays. So the net impact isn't necessarily 6 percentage points then? So the effect is...
Now the net impact is 4%.
Okay.
No, no, the net impact is 6%.
Okay. Okay. Next question then. On -- in the industrial division, if we -- I mean, we don't know the split of FX between the divisions. We can do some estimates on the earnings contribution from acquisitions. And when I do that, the organic earnings development in industrial looks quite weak. Is that related to what you talked about, about the sort of selling expenses coming back and so on? Or is there a particularly negative mix? Could you say something about the organic margin progression or incremental margins in industrial, also down quarter-on-quarter, which is a bit surprising given 2Q should have been margin accretive.
No, industrial is up margin-wise.
Okay. Then I got the numbers wrong. Sorry about that.
Yes.
Book-to-bill then in MI, third question.
It's up in the quarter.
Up or above 1? Up or above 1?
It's above 1, and it's up. So we built backlog. But you're absolutely right that we do see an underlying trend in both businesses where we've spent more on primarily sales in the quarter.
Okay. Final question. Is there anything -- I mean, you said you've seen continued strong demand overall. Anything that makes you concerned, I guess, outside of the situation -- the macro situation? Anything in your own business that makes you concerned about the second half or runway into 2023 at all?
No, I'm super happy with our performance in the company. But of course, like everybody else, you should be concerned about the macro environment because it's a quite challenging environment we're entering into.
The next question is from Sven Merkt, Barclays.
Maybe we can stay on the topic. And I was wondering if you could speak a little bit about what room you see to slow down OpEx growth, if we would enter a recession. You obviously had two cost savings programs over the last couple of years, and I was wondering if you still see some scope for another meaningful one if needed. And related to that, can you comment on hiring? Have you made any changes on your hiring plan?
Hiring hasn't been an issue up till now. With the attrition everyone has seen in labor market, hiring is the least of our problems. But we hired too many people. The problem up till now has been to find good talent in the labor market. But when it comes to cost, obviously there is always room for cost improvements if demand isn't there, and I think we proved that over and over again when we had hit recessions.
Okay. That's clear. And can you also comment on the gross margin? It was obviously very strong. To what extent was this driven by your prices rising faster than your cost? And to what extent was it driven by mix? And could you then also kind of comment on which business units drove the margin improvement?
I think it's a combination of price increases and mix because the fact of the matter is that we see the delays in our hardware-based business, which has slightly lower gross margins than our pure software businesses. So mix-wise, we would have -- we had a favorable mix, but also prices are starting to trickle through the P&L statement and definitely gave us a positive, even though small, impact in the second quarter.
And on the business units, any specific business unit that drove it? Was it then just the software-heavy business unit which essentially drove it?
Sorry, I couldn't hear you there. Can you repeat that?
Yes. And just around which business units have driven the kind of margin improvement, I guess just related to your comment that it was probably then the software-heavy business units that drove the improvement. Is that right?
No. As a matter of fact, we saw gross profit improvements across the board, even in our hardware-based business, in spite of lack of components. It's more of a mix of products...
Sorry, you cut off from me. Are you still there?
No, no. It's -- I said it's more product mix where new products are replacing old products, and they have better gross margins than the products they replace.
The next question is from Adam Wood, Morgan Stanley.
I wonder if I could just dig in on the cash flow a little bit. Cash flow conversion versus the EBIT and EBITDA has deteriorated a little bit year-on-year. You flagged at the start of the call a lot of that was working capital. It looks, the balance sheet, as if it's a little bit of a receivable build and inventory build. Could you just talk a little bit about whether you're seeing any difference in the behavior of customers in terms of how quickly they're paying? And just dig into that inventory build on the balance sheet side, please.
No, I think what we saw in the quarter is a -- we were actually transferring receivables between Infor and Hexagon, and that had a buildup which is a technicality really. So we haven't seen customers dragging on payment conditions in the quarter.
The next question is from Johannes Schaller, Deutsche Bank.
Just want to get back to the supply chain issues. I mean when we talk to semiconductor suppliers, it looks like there is a lot more demand -- sorry, a lot more supply coming to the market in H2, and you yourself also did quite a bit of redesign efforts already to improve the situation. So should we expect the 6% headwind that you had in the quarter, should we expect that to really largely go away now as we go into the second half? Or how do you assess the situation?
And then as a second question, I mean, you're already doing 29% operating margin. Strong gross margins. You had a quarter with a lot of OpEx and events with HxGN Live. Why are you not raising your guidance to more than 30% operating margin longer term? I mean what is really keeping you back from doing that?
Well, first of all, I think our target is more than 30% EBIT margin. So we don't need to raise it. But secondly, yes, in fact...
That's a fair way to look at it.
Yes. But then secondly, I mean, the best guess you can do sitting here in late July is to say that between now and New Year, we're going to see a much improved situation on supplies or components. As to when that exactly happens, that is outside my control. But we do see the positive trend, and we do believe that supplies are going to be normalized within the next 6 months.
So certainly, for next year, you're not expecting any more headwinds from what you can see today. But in the second half, the exact shape is not quite visible on Q3 yet? So we should probably still model a headwind in Q3 then?
The 100 -- so we'll see.
The next question is from Nicholas Green, Bernstein.
Just one question on the Nexus platform, please. Could you give us an update on how your thoughts are as to rolling that out and developing that? I mean you announced it at HxGN Live. I think at the time, maybe it wasn't quite clear what the commercial model would be. Maybe you're seeking feedback from clients or you were deciding internally. Do you have any sort of more information you can share with us whether this is a paid-for service, whether it's sort of a way of maybe on -- selling different products? And -- maybe just an update because it was certainly very exciting when it was announced and just keen to think about how we should be thinking about it helping the business grow.
I think you should regard it as the act of -- the way you're stitching together all the offerings we have in our manufacturing solutions. So we are presenting -- through the Nexus platform, we could, for example, present a combination of CAM SOFTWARE, simulation software, coordinate measurement machines and so on and stitch a solution together tailor-made for your need as a manufacturer. And it's going to -- obviously, it's going to be an online sales platform, but it's much, much more than that. Eventually, it's going to be a communication platform. It's going to be everything around what Hexagon does for the manufacturing industry. So I think you're absolutely right, you should be excited. It's a great product.
Do you expect you would sort of charge for access to it? Is it revenue generating in its own right? Or is it more that it will facilitate revenue through the different parts of the business that it opens up access to?
No, I think the access will be free. And we will eventually make the money through selling -- cross-selling more and more products through Nexus. Then Nexus would be your meeting place, your items, if you so wish.
The next question is from Nay Soe Naing, Berenberg.
Firstly, on the impact that you have seen from the extended lockdown in China. I was wondering if you might be able to quantify it, the impact on growth, like you have done so with supply chain issues. And then -- I'll just go through the questions, if that's all right.
Secondly, with the current general macro environment, how might you see Slide 13, as an example at high level, progressed for the rest of the year?
And then lastly, if you could give us an update on the percentages of software and recurring revenue levels, that will be great. Hello? Sorry, I think I got cut off there. [Technical Difficulty]
Okay, we have the speaker's line back. Nay Soe Naing from Berenberg, you were asking your question.
Sorry, I don't know if you heard my questions. If you didn't, I'm happy to repeat them.
No, we're having bad luck with the phone lines today. But please repeat it.
Okay. No worries. Yes, I was asking the impact at a growth -- at the growth contribution from the lockdowns in China. I was wondering if you were able to quantify it like you have done so with the supply chain impact. And then secondly...
Yes. The -- I think I answered that one and said it's very hard to quantify the lockdowns in China. They have had an adverse impact, but I wouldn't dare to quantify it.
Right. Understood. And then with regards to the general macro conditions that we are in, obviously I, think you mentioned that Hexagon won't be immune to it. At high level, I was wondering if you could share how Slide 13, for example, might progress in the second half of the year.
What I think we all can agree on, which is not unique to Hexagon, is that consumer-related industries will suffer first. We believe that China is probably at the bottom, if we take geographies, whilst Europe and North America is probably peaking. And we also see manufacturing industry could come second after consumer industries. And then we believe that infrastructure, energy and process like mines and so on will continue to see pretty good demand in the foreseeable future. And if you model that on Hexagon, we do not have any direct consumer business, but we do have manufacturing. And that's the best view I can give you right now.
That's really helpful. Just one last question, hopefully a quick one. Could you give us an update on the percentage of software and recurring revenues in Hexagon? I think they were above -- about 40% at the end of 2021.
We -- what did we say? I'm waiting here. I'm getting help on this question. So you have to be a bit patient.
Not a problem. We can take it offline.
Yes, 60% software and so there's 35% pure software, 40% recurring revenue. That's where we believe we're at after the second quarter.
So just to make sure I've got those numbers correct, the 60% was software services, of which 35% is pure software?
Yes.
Okay.
40% recurring.
40% recurring, right.
Okay. Then we'll now take the final question from Magnus Kruber, UBS.
Well, it's [Hamilton] here from UBS on behalf of Magnus Kruber. Last question. Hopefully, I'll make it a good one.
So just on supply chain. I know you mentioned you expect it to get better throughout 2022. I was just wondering if you could give any color on the phasing. Do you expect it to be a gradual process? Or do you think it will be more back-end loaded towards the end of the year?
Yes, that's a tough one. Yes, yes, I would -- to play it safe, I would say it's back-end loaded. No one really knows how deliveries are going to pan out. So that's the best guess. But we will see a gradual improvement starting now. And hopefully, we will have ample supply on components by year-end.
And just one quick follow-up, if I can. Assuming that the underlying market activity holds up, could we see growth in just, say, [solar] in H2?
That's a tough question. We'll see.
And with that, I'd like to thank everyone for calling in today, and I wish you a good summer, all of you. Thank you.