Nobia AB

STO:NOBI

Earnings Call Transcript 2020-Q1

[Operator]

Hello, and welcome to the Nobia Conference Call.[Operator Instructions] Today, I'm pleased to present Tobias Norrby.Please begin your meeting.

[Tobias Norrby, Head of Investor Relations]

Good day, everyone, and welcome to this Nobia update on our preliminary results for the first quarter 2020 that we published yesterday and the latest development regarding the coronavirus impact.But before we start, it's important to notice that the numbers we present are preliminary and unaudited for the first quarter. And they may be subject to change up until the release of the Q1 report, which we expect to publish on the 4th of May. And we'd like to start by giving you some highlights on the development and trading since start of the coronavirus outbreak.And with that, I hand over to our President and CEO, Mr. Jon Sintorn.

[Jon Sintorn, President & CEO]

Thank you. And thank you, everybody, for dialing in.And we decided it was a prompt measure to give you this heads-up on these unaudited numbers in these extraordinary turbulent times and not least in the likes of the lockdown in Austria and not least U.K.So first, before going into the current situation, I'd like to give you a little bit of a time line in events having an impact on our Q1 results and on our business and company overall, obviously. So it was early March where the -- this COVID-19 situation put deliveries from Italy at risk. As you all know, Northern Italy was one of the first centers in Europe being hit, and we have some important suppliers in that very area and where 80% of our frontals are sourced. The good thing, if there's any good thing in this, which is not, but we had our 12 weeks what we called Brexit warehouse or Brexit supply that put us in a quite, if not comfortable, at least stable situation in terms of delivery for the U.K. And most of those frontals being sourced in Northern Italy are for our British operations. So that was our initial impact. Very, very little impact from China. And obviously we're working on securing suppliers in general across our SKUs.By mid-March, the situation got a bit more complicated and severe because, first of all, we closed all our operations in Austria because of the restrictions. Again, and I will probably rephrase this, it's very seldom, if any case, the government has closed our operations. It's the customer demand. It's other type of measures or forcers, impacts that makes it impossible for us to operate, so our factories. So in Austria, it was closed, and that was driven by the retail. Our customers were closing their shops. By mid-March also, slightly after, Denmark and Norway closed borders, shut schools and all of that, that most of you probably know as well as I do or even better. I must say, though, however, that's starting, but we were able and still are to operate fairly normally manufacturing, construction sites open. And we had already filled a decent order book that we were able to continue to work on, obviously with some more, let's call it, sick leaves because health and safety goes first. So if you have any symptoms, you need to stay home, following the respective regulations and respective restrictions that we have in each country, of course an impact but relatively limited in general and slightly less than we could anticipate actually, especially due to the construction sites still being open.By the end of March, the U.K. went from a fairly moderate to a more restrictive or very restrictive government restrictions, interference. And as you've seen in the press release, we temporarily closed our stores by March 24. And again driven by our customers closing sites, closing stores, closing builders' merchants and that sort of channels, we were -- it didn't make sense for us to have any manufacturing up and running, so we closed also manufacturing between March 25 and March 27, putting a vast, vast majority of staff in the U.K. on furlough. We lost 6 days of trading and 4 to 6 days of dispatch, depending on brand, in the U.K. in this period of time, affecting the first quarter. Now I'll get back to the current situation, but I'm sure you know that we are still on furlough, and operations are still very restrictive and closed.By the end of March, we also experienced a, let's call it, more increased restrictions or worsening climate in Finland and decline in footfall due to there more imposed further restrictions, but here, again, our manufacturing continued. Obviously, that goes for all our manufacturing sites where we have operations, with security measures taken to protect health and safety and also a higher sickness rate, not dramatically higher overall but still higher. And that is mostly due, obviously, to that people have to and shall take more care. If they have any symptoms, they should not go to work. By the end of March, supply chain was fairly intact, obviously U.K., Austria and Italian suppliers having more difficult. We continued -- in the course of this, we've been working on and continues to work on building safety stocks and increase our safety stocks. And then by the end of March, we also saw few cancellations. People are more willing than maybe anticipated. I don't know, but in general the orders that have been taking is postponed to a later date. So most of the order book that we had on hand as of now still exist. It's just a variety of opportunities depending on country when we will be able to deliver on it.So that was kind of the time line, mostly -- most of things happening in the month of March with a rapid but still gradual increase of the -- let's call it, the severity of the situation, ending up with having complete lockdowns in the U.K. and Austria, temporarily lockdowns in Austria and the U.K.; and then fairly normal operations, if anything is normal in these times, in the Nordics and Netherlands, Netherlands also having more of the Nordic way of being able to operate due to their restrictions in that country.So what we have done in the month of March to mitigate risk and take action in order to safeguard cash flow and other important things in times of crisis. Well, I guess, first and foremost, we have temporary layoffs, furloughs, where about 3,000 of our 6,100 employees are on temporarily or -- furlough. The Board of Directors canceled the dividend proposal. We have postponed a lot of projects and product launches. It's kind of a harsh statement, saying that we stopped everything. We haven't stopped everything, but we are focusing on sell, sell, sell, deliver, deliver, deliver. So sales force, predominantly the Nordics and the factories that we can run, the focus is to support them as much as possible and have -- enable them to do their job. As a consequence, most of our headquarter activities and projects are being postponed or, well, canceled for now or temporarily postponed. And hence, also most of those people are on furlough. We have stopped all non-short-term essential CapEx. There are a few things going on, but with again sell, sell, sell, deliver, deliver, deliver in mind, we have stopped the non-short-term essential CapEx investments. We've done tax deductions and tax payment postponements; and obviously several cost-cutting initiatives such as no travel, which is probably more difficult to travel today than not to travel, but in the course of March, early on, we started with a no-travel policy. We have canceled just about all consultants, not quite all, or have negotiated other rates. We have renegotiated rental agreements and we have cut a lot of discretionary spend.Let me already here say that I'm incredibly impressed with how quickly, swiftly and firm my colleagues and all the people within the group have taken these actions in these turbulent times and environment. It's been -- in the midst of the severity of the situation, it's also been, let's call it, a pleasure or a joy. Wrong words, but I'm still saying it. It's been really impressive to see how people all across the group have really responded swiftly, taking these difficult decisions and difficult measures but with high spirit and a sense of professionalist, calm and at the same time urgency. I'd like to express that as well in a call like this.So then in terms of protecting cash flow, sell, sell, sell; deliver, deliver, deliver; protect cash. That has been the main theme during this crisis, so far. To sell, sell, sell, we have accelerated new ways of selling kitchen. We have web traffic which is up in most countries. We have done -- and we are doing and have done online selling through Skype and Teams digital solutions. We have launched new consumer campaigns to drive traffic where we can but also traffic online and drawing tools. I think it's 100-something kitchen specialists that you can get assistance from digitally now. We push it through open retailers, especially do-it-yourselves, DIY, stores; and then pushing forward with tradesmen and construction sites, especially in the Nordics, obviously. To be able to deliver, health is paramount. Health is -- health and safety go first. So we've taking -- in order to safeguard our production and our people that are working, we have taken several health and safety measures. On top of being able to safeguard of delivering capacity, we take a diversified alternative supplier if necessary. And then we have, as I already mentioned, built a larger safety stock.And the guidance here is that being able to deliver on our order book is the best way of generating cash for this company as of now. And hence, we are not as tight in our warehouses, if I put it that way, as we normally will be. We are taking measures to increase stock and to really enable us to be able to deliver.So that was about actions that we have done. Let's get into a little bit on the current situation. 1 or 2 sentences here, you will hear -- you've already heard, but still getting a bit of a summary for the current situation.From the supply chain perspective, Italy continues to be the largest risk. We've seen, let's call it, a stabilized that -- more of a stabilized situation today than we had, let's say, 2 weeks ago. Obviously, it's not a normal situation. And we have a strong sourcing team working on this day and night, making sure that we have availability of material. As of now, we have been able to manage that quite well. And as I said, the guidance here is to increase stock levels to safeguard that we have materials [ on time ]. As I mentioned before, Italy, some core frontals have been temporarily taking out of the range in order for us to be able to deliver on our promises. There are some signs that we may get some of that back in production, but it's too early to tell or be any -- have any confidence on whether that -- when that can happen.Supplies from the rest of Europe, mainly sheet materials and those kind of things, white goods and hinges, are running almost as normal, but again we are driving higher safety stocks on those. That's from a supply chain perspective.In the U.K., we're still closed in retail and trade. We will be looking into if we gradually can reopen trade stores. And let me emphasize again that, for the most part, it's not the government that has imposed us or told us that we have to close. It's the -- let's call it, the demand side that has also made it very rational for us to be able to run. And the sentiment in the country, at Boris Johnson's speech, did not really open for having anything open. It's too early to tell whether that has changed completely or not, but I guess slightly that will change over time.

[Kristoffer Ljungfelt, Chief Financial Officer]

Just to clarify, Jon: It's not the demand of kitchens...

[Jon Sintorn, President & CEO]

No, no...

[Kristoffer Ljungfelt, Chief Financial Officer]

It's the demands from the population rather too.

[Jon Sintorn, President & CEO]

Correct.

[Kristoffer Ljungfelt, Chief Financial Officer]

Just to...

[Jon Sintorn, President & CEO]

No. Our customers find it very reluctant to be opened even if they could be open -- the sentiment in the country, with the population saying, "No. You should be closed."

[Kristoffer Ljungfelt, Chief Financial Officer]

Yes. Correct.

[Jon Sintorn, President & CEO]

Thank you for clarifying that.In London, we have still 20 out of 90 projects ongoing, but throughout the country most of the construction projects are temporarily closed or not running. Social housing remains closed. And then most orders for delivery in April have been moved into later in the -- or in -- later in Q2 or in Q3. As said, in the U.K., for the most part, our -- the existing order book is still there. However, it's being postponed. There are some cancellations, but most of the order book is still intact.In the Nordics, all manufacturing is open. And as I already said, it's critical that it remains open. We have currently an order book to deliver. We are 30-ish percent behind last year, in Q2, but we are expecting to fill a bit more in the coming weeks. So far, consumer demand has been more -- not at the normal level even though you could see it be -- it's not that bad, but it's not on a normal level. On the project side, as we've seen, most, if not all, project, construction sites are still running. And we still have project sales in general, let's call it, in general, for the Nordics. It's too early to say when the restrictions will ease and then, as a consequence, how retail will come back. We hope to have more information regarding that or a clearer view on what's going to happen during the release of the -- the full release, the real release of our Q1 report in early May.As far as the current situation in Central Europe. Austria is -- have been completely locked down, is now easening slightly. And we are planning, one-shift manufacturing start again as of yesterday, to gradually start working on getting back to a more of a normal situation. It will not -- probably not be a rapid opening of the country, but at least some steps in that direction have now been taking. As far as in the Netherlands and we -- our project business there have been running fairly, fairly normal, I should say. Yes, I think that's enough. It's been fairly normal in the Netherlands despite the restrictions there.And then last but not least, on the update on the current situation before Kristoffer goes into the Q1 financials is regarding group initiatives. And then obviously, unfortunately, we were much looking forward to have the Capital Markets Day. 19th of March, I believe it was supposed to be. A week or 2 weeks in advance, we postponed it. And we were looking forward to put some more light on the investments that we are doing and plan to do. And we will obviously determine a new date when the situation has stabilized, but we are much looking forward to share this information with you and put some light on some of the costs that we are -- and investments that we're doing and to drive our strategy. As said then, as a result, we have postponed most of our investment in strategic themes, not everything but a significant part, because it's very difficult for us to work in this -- on those things in the current environment.We are continuing to trade push in the U.K. as soon as the -- let's call it, the regulations or the environment, rather, allows us to do it. And then it's -- I think it's a -- fair to comment that we are continuing our planning work for a major investment in the new factory in Sweden. The work is done slightly different from our original plan, but then again a lot of other things have changed such as lead time from machinery suppliers and whatnot. So it's too early to assess whether there's -- what type of impact, if any, that this will have on lead time for that and other things, but as of now, we are continuing to work on the planning phase. And then last but not least, we are looking into opportunities if there are changes in the marketplace in this period of time.So thank you for listening to that, a bit of a time line of events and the summary of the current situation or markets. And with that, Kristoffer, please, Q1 financials.

[Kristoffer Ljungfelt, Chief Financial Officer]

Thank you, Jon.So we have published the results of -- yesterday. And I intended to go through those and give some light on it, but again we will also give you more information on the actual outcomes during May 4.So first of all then, the group, where the net sales declined by 1%, net. The organic sales growth was negative 3%. And EBIT came in at SEK 134 million compared to SEK 260 million last year. And the main deviation to the profitability is, of course, the less -- the trading days -- the less trading days and the lockdown in U.K. and Austria, which amounted to about SEK 60 million, whereof U.K. being SEK 50 million and Austria being roughly SEK 10 million.Then we have also the large currency swings that impacted negatively on profitability by about SEK 40 million. That was almost entirely related to the Nordics and the weak Norwegian krone and Swedish crowns compared to euro. In the quarter, we also have -- we continued our restructuring of the U.K. manufacturing. And we also did have related problems to that move, which has burdened the result in Q1 by about SEK 30 million. And as we previously communicated back in Q4, we have done some major changes now to the footprint, where we have basically refurbished our main plant, Darlington, to become the main source of supply in the U.K., which then will allow us to do further changes going forward in that production footprint. In addition then, the higher group common costs impacted negatively by SEK 30 million in the quarter, but then one has to remember also that last year was historically low in the quarter due to timings and other, but about SEK 20 million of the overspend this year was related to the strategic themes and, to some extent, IT projects. However, from now on and especially given the situation we're in, we expect the group common costs to be below last year and for the run rate going forward here and especially so if the lockdowns continue, as Jon was alluding to as well.Double clicking to some extent on the regions. We're pleased about the Nordic result that delivered a strong result despite the harsh market conditions and also the difficulties in supply chain and manufacturing, which they managed in a very good way. So EBIT came in at SEK 198 million compared to SEK 214 million but then with a negative currency effect of about SEK 40 million. And Denmark continued to perform well, but we also saw quite okay improvements in Sweden and Finland, if we back out the currency impact on that, Norway being somewhat softer in terms of market and also bigger impact from the closedown done by the Norwegian government.Also Central Europe performed well, as Bribus continues to deliver strong results. EBIT for the region was SEK 18 million compared to SEK 6 million last year despite the negative 1% organic growth. We believe also Austria did quite well in the quarter, as they delivered result in line with last year despite the fact that they had to lock down their whole production and lost almost 10 days of sales from mid-March.Then moving over to U.K. As you would understand from the numbers, we have had a difficult quarter, with a negative EBIT of SEK 22 million compared to positive SEK 73 million last year. So a big gap. It was then impacted negatively by the lockdown, which we calculate to roughly SEK 50 million; and the manufacturing issues related to the restructuring that's then worth about SEK 30 million. On a positive note, the [ trade kitchen ] and trade push we're doing right now continue to perform well, and it actually grew by 16% in the quarter despite us not having -- losing 6 days. And then on the negative side, the other U.K. segments were down, but if we back up to the dates before the lockdown, U.K. was growing slightly. It's still fair to say that we are not content with the results in U.K. And we have initiated further actions to strengthen both the retail proposition, continue to roll out trade in a good way as it's ongoing but also to streamline our supply chain in a better way.On the financial side, our balance sheet remains strong, I'm pleased to say, with approximately SEK 1.3 billion available cash and credit. And in May, we will be able to give you more information on the cash flow and debt, net debt, position.

[Jon Sintorn, President & CEO]

All right, thank you, Kristoffer.Then as a few summarizing remarks at the end of this before Q&A.And so what to expect for the second quarter. Just a few remarks: As I already mentioned, the Nordic order book is currently 30-ish percent below last year. However, there is more time to sell to start filling that order book more probably slightly better than today, but it's too early to say to what extent we can fill it completely but then again emphasizing it's dependent on that our manufacturing remains intact that we can continue to run our factories. We'll see most of the construction projects will still be ongoing. And then again, coming back to the order book, whether we can fill it up more is to consumer response we will see. It's kind of early to tell, but there are still a few more weeks and maybe a month or so for that. U.K., there is not clarity on when the lockdown will ease. We do have an order book for 2 months to be delivered. And then trade has shorter lead times, so we can then start -- restart sales and production for trade faster than any other things, but we expect it to be closed in the month of April but not for the entirety of the second quarter.Netherlands, pretty much in line with the Nordics. And then Austria, after a quite long lockdown, we have taken -- we can see the country taking its first steps for easening on the restrictions, meaning that we have just restarted a first -- a single shift in the factory. It's going to be interesting to see how the customer base, the retailers in Austria are handling the situation in next couple of few weeks.All right, that's a little bit short on what to expect for the second quarter. Here and now, we are managing the current situation. That's been our prime focus last few weeks. I think we've come long ways in doing that. And now our focus is to prepare, let's call it, for the next phase, looking into what should we reignite and restart as -- step by step as the countries are easening on their restrictions and finding ways to do things during restrictions that also prepares us in a good way for the future.So with that, thank you very much. Stay healthy.Questions?

[Tobias Norrby, Head of Investor Relations]

And operator, let's open up for questions, please.

[Operator]

[Operator Instructions] And our first question comes from the line of Mattias Holmberg of DNB.

[Mattias Holmberg, Analyst]

I was thinking a bit about the EBIT drop-through. You've given us some details sort of explaining the different moving parts why it's down quite significant despite the flat top line. I'm curious if you could elaborate a bit on if you expect to achieve or already have seen any positive impacts from the cost initiatives that you've taken or if it simply requires more lead time for that to come through. And then I'm thinking in particular of the temporary layoffs and such.

[Kristoffer Ljungfelt, Chief Financial Officer]

Well, on the positive note, the governments in all countries where we are established have gone out with quite generous programs and especially so in the U.K. When talking about the SEK 50 million, that's a year-on-year effect from the fact that March is normally a quite high period in terms of deliveries. And yes, it costed a bit more, in the first week, to close down, as we did not have -- we were to some extent caught by the sudden move in the population, sudden shift, and did not have a chance to take out people as quick -- or initiate the furloughs, I should say, as quick as we hoped. But having said that, as we entered April, yes, we have a very generous furlough program in the U.K., where we can see immediate effect on cost savings. And it does not only go for U.K. but also the other Nordic countries, including -- and Austria.

[Mattias Holmberg, Analyst]

And will you say that you saw any benefit of that already in Q1? Or is it all coming through in Q2?

[Kristoffer Ljungfelt, Chief Financial Officer]

The majority is coming in Q2. We took very little of those benefits in Q1.

[Mattias Holmberg, Analyst]

Right. One more...

[Kristoffer Ljungfelt, Chief Financial Officer]

There always will -- yes, go ahead.

[Mattias Holmberg, Analyst]

I just had one more question on the CapEx pipeline. You've talked a little bit about this. And perhaps if you could shed any more light on, given the size of the investment that you're planning to do here in Sweden, do you expect any sort of need to review that investment plan. Or are you still dedicated to what you've communicated earlier?

[Jon Sintorn, President & CEO]

As of now, we continue our planning work for that factory.

[Operator]

Our next question comes from the line of Adela Dashian of Handelsbanken.

[Adela Dashian, Analyst]

You mentioned that your online traffic in most of your markets is up. Does that also apply to countries that are currently operating in complete lockdown? Are your customers still able to place orders as usual through those online portals?

[Jon Sintorn, President & CEO]

No, it's not up everywhere. And if we talk about the U.K., it was almost everything stopped immediately. And now we are -- actually the web traffic is down versus last year in the U.K., but it's significantly up from when the lockdown was announced.

[Adela Dashian, Analyst]

Okay. That makes sense. And then also could you give us an idea of how long the postponement in deliveries are in affected areas? I know that's a subjective question, but just how long can we expect those from the order book to get to the customers in time?

[Jon Sintorn, President & CEO]

Could you repeat the question again? There was some glitch on the line. Say again.

[Adela Dashian, Analyst]

How long the postponement in deliveries are in the affected areas, so approximately how long it will take for the customers to get the orders that they're placing.

[Jon Sintorn, President & CEO]

Well, you're referring to the U.K. and Austria, I presume.

[Adela Dashian, Analyst]

Yes.

[Jon Sintorn, President & CEO]

Okay. It's too early to tell, but we don't expect any significant deliveries in the course of April. But we do expect deliveries of some kind in the second quarter.

[Operator]

[Operator Instructions] And our next question comes from the line of Kenneth Toll Johansson of Carnegie.

[Kenneth Toll Johansson, Financial Analyst]

Yes. So right now there are -- the outlook is that some countries are reopening again and the outlook is brightening a little bit. I know that you've worked a lot on acquisitions over the last couple of years. Do you see opportunities for acquiring competitors that may be -- that might be in a worse position than you are and really needs to sell companies? Would you dare to?

[Jon Sintorn, President & CEO]

[indiscernible]

[Kristoffer Ljungfelt, Chief Financial Officer]

Yes, yes, yes -- but I think Jon also said before that this type of crisis also opens up other opportunities. And of course, that could be an opportunity, but we have to be careful in the situation to understand also where the whole thing is going here and be both prudent on our debt position, I would say, but still trying to take care of the opportunities that will be. So I think it's really difficult to say. And I think you have seen crisis as well from your side, on other crisis, that things can happen on the marketplace as well.

[Operator]

Our next question comes from the line of Christen Hjorth of Numis.

[Christen David Hjorth, Analyst]

Just a quick question from me really. I mean you pointed, and this was specifically in the U.K., I think, in regards to demand for kitchens were holding up. It's just that, I suppose, the route to market and your customers were closing. I just have a sort of more general question. As sort of lockdowns end, do you think -- what happens to demand then? Just with the view that obviously kitchens involve someone else coming into your home, with obviously the coronavirus still out there. And I suppose what you're seeing is different jurisdictions, like the Nordics, have been more open and probably give you a bit of a sense of how that plays out in that environment. So just sort of wondering, in the U.K. and Austria particularly, how you expect that to play out as lockdowns open.

[Jon Sintorn, President & CEO]

Well, again it's too early to tell. It's obviously very difficult to predict. If there's any comfort, if there's any comfort, I think it's good signs that our order books have -- for the very vast most part, is just postponed and not canceled, which I believe then it should be -- that's one sign of that there's still an appetite for kitchens, if I put it that way.

[Operator]

And we have no further questions on the line at this time. Please go ahead, speakers -- I stand corrected. We do have a question on the line, and that is from the line of Sindre Sørbye, my apologies for my pronunciation, from Arctic Fund Management.

[Sindre Sørbye, Portfolio Manager & Partner]

Just a follow-up on drop-through in the U.K. You indicated SEK 50 million, and that is -- I understood that, that was from the 24th of March, so basically that's basically a week then. But going forward, how should we think about it, assuming that you approximately have 40% gross profit -- or gross margins? And should -- I mean, if we assume that's fixed costs in the U.K. are around SEK 300 million per quarter, what would be kind of burn rate, so to speak, when you are totally closed down? Will that equal to sort of SEK 300 million divided on 12 weeks of -- as a kind of ballpark figure where we are now?

[Kristoffer Ljungfelt, Chief Financial Officer]

Well, first of all, I think I understand the question. And of course, the SEK 50 million, as I said before, is versus a strong delivery that we usually have in the month of March. The -- it's I've got the questions many times, what the burn rate is. And the very difficult answer is it depends because it -- there are so many governmental-backed subsidies right now that it's very easy to -- and generous programs and especially so in the U.K. So what we're having now is what we call more of a skeleton crew. And to shed some more light on it: We would estimate a total closedown in April. Assuming 0 sales in April, the costs then were around SEK 50 million to SEK 100 million, but again we are a bit hesitant to give a firm number like that, but we still do it, obviously, because it has a lot of dependencies on what's happening on the marketplace and what's happening with the governmental-backed subsidies, et cetera. So slightly lower than what you estimated for the quarter. When you said SEK 300 million...

[Sindre Sørbye, Portfolio Manager & Partner]

Yes.

[Kristoffer Ljungfelt, Chief Financial Officer]

Yes. I hope that was answer to your question. Or...

[Sindre Sørbye, Portfolio Manager & Partner]

Yes, yes, but that SEK 50 million to SEK 100 million, that goes forward -- that goes for the whole Nobia as is now, or just for the U.K.?

[Kristoffer Ljungfelt, Chief Financial Officer]

That's for the U.K.

[Sindre Sørbye, Portfolio Manager & Partner]

Exactly, exactly. Okay.

[Kristoffer Ljungfelt, Chief Financial Officer]

And to Jon's point earlier, I mean, as long as we can manufacture, and I think the situation has actually improved rather than the opposite when it comes to manufacturing, then there is a possibility to deliver order book in the Nordics. And there is order book to deliver in the U.K. We just don't have the chance to produce the kitchens right now.

[Operator]

And we have no further questions on the line at this time. Please go ahead, speakers.

[Tobias Norrby, Head of Investor Relations]

So very good. With that, we end this call and say thank you, everyone, for calling. And hopefully, talk to you soon. Thank you.