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Raketech Group Holding PLC
STO:RAKE

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Raketech Group Holding PLC
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Earnings Call Transcript

Earnings Call Transcript
2020-Q2

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Operator

Ladies and gentlemen, welcome to the Raketech Q2 2020 Report. [Operator Instructions] Today, I'm pleased to present CFO, MĂĄns Svalborn; and CEO, Oskar MĂĽhlbach. Please begin the meeting.

O
Oskar MĂĽhlbach
CEO & President

Good morning, everyone. Welcome to the presentation of Raketech's report for the second quarter of 2020. Let's move to the second slide, please. My name is Oskar MĂĽhlbach, I'm the Group CEO. In addition to myself, you will also today be hearing some insights coming from our CFO, MĂĄns Svalborn. But before we jump into the presentation, I want to quickly just comment on our new visual identity. For those who don't know, we started as a poker rakeback network, thereby the name Raketech 10 years ago. Since then, we've transformed into a tech-driven performance marketing partner to the iGaming industry. And as we continue to develop and advancing into new technologies, gaming verticals and geographies, it was time to also update the visuals accordingly. We wanted to create something modern and unique that symbolizes our constant strive towards finding new and more efficient ways as well as something more friendly and playful to signal that we are easy and transparent to work with. That was very quick about our brand, now over to the presentation. Slide 3, please. Today's agenda as since last time, basically only changed color which means that I will start by walking you through the financial and operational highlights of the quarter, MĂĄns will then elaborate further on the financial details, after which I will conclude today's key takeaways. At the very end, we will, of course, also make room for questions if there are any. Slide 4, please. This slide highlights our most important KPIs. The ones telling you about our revenues and profit. And as you can see in the circle to your left, our total revenues for the quarter reached EUR 7 million, which equals just about 24% in annual growth compared to the first quarter our growth was 7.4% at the same time as EBITDA increased with 7.5%, which you can see in the second circle. The fact that EBITDA was essentially the same or slightly better than the growth in revenues is a signal that we're doing something right. This considering that a fair share of our growth is relating to the recent acquisition of Lead Republik, where revenues primarily stem from paid media, which, by nature, is significantly lower in terms of margins. This is perhaps even more obvious when looking at the largely increased NDC number displayed in the circle to your right, which primarily originates from NDCs generated through Lead Republik. Fluctuations in the combination of paid media and revenues originating from organic assets, our product mix is, in other words, very much influencing our EBITDA margin. For clarity, this is just as we anticipated, but I do understand that the comparison with previous periods might be a bit more tricky to do. MĂĄns will, therefore, in just a few minutes, elaborate a little bit more on this in one of his slides. To avoid any potential misunderstandings, I want to emphasize that our growth ambitions, even though we, of course, aim for paid traffic to continue to develop positively is primarily within organic initiatives. This is what we do best and where we continue to put our long-term focus. At the quarter, Q2 was, in many ways, a very challenging quarter, the ripple effect from COVID-19 resulted in a sudden loss of sports revenues and the temporary additions to the legislation in Sweden added uncertainty. Due to these 2 factors, we experienced a more hesitant attitude towards marketing investments from the operators with June being extraordinary slow. Taking this into consideration, I'm happy to be able to conclude organic revenues basically in line with previous year, totaling minus 1.2%. Our growth ambitions are, of course, significantly higher than this, but looking at the circumstances, I think we managed to navigate okay. In contrast to June, July, however, saw a strong revenue development, this due to a combination of bad weather in Sweden, players looking to open multiple accounts due to the new Swedish temporary regulations and small but still noticeable return of selected sports events. Particularly the start of July was strong, but with a more normalized or perhaps slow end of the month. So all in all, fairly strong numbers considering the circumstances for Q2, with particularly good performance from casino-related assets to some extent compensating for the loss of sports sales due to COVID-19. Let's move on to next slide, and that is 5. With this and the next slide, I want highlight a few fundamental factors that I think are important to keep in mind when you look at Raketech and our industry. First, a few words on the, for us, so important Swedish market, which is becoming more and more advanced. The gaming regulations that came in to force on January 1, 2019, with all of its good intentions, is unfortunately not working as intended yet. Sure, tax money from the casino operators are collected to the state, but a very unfortunate side effect is that, it basically leaves the goal without it's keeper for the back market. Our best estimate is that 10% to 15% of the Swedish gambling market is lost, which is the number in the circle on your left. There are actually studies that claim that this number is as high as 25% and maybe the truth is somewhere in between. As a consequence, we've noticed a change in attitude from the operators towards the Swedish market from positive a few years ago to now being generally negative. And with the recent temporarily and swiftly imposed updates to the regulations earlier this summer, this attitude has unfortunately continued to deteriorate.Another key thing to bear in mind is that with regulations also come competition from companies such as Google, Facebook and other programmatic marketing alternatives. Taking all this into consideration, I still believe, Sweden, once the turbulence has settled, can develop into a really good market. But only for those operators and affiliates that find new smarter ways to ensure they generate value to their customers. This is why I think it is absolutely essential for Raketech to keep investing, to make sure we have solutions that caters for the more advanced landscape currently evolving in Sweden.The AI for our top list that I talked about in the previous presentation was one important initiative on this theme. And this quarter, we have developed another initiative called Extended Audience, which I will be explaining in just a little while. But before jumping to the next slide, I want to once again highlight the impact from COVID-19 on our sports-related revenues as basically all major leagues around the world, including the European Championships in football were canceled, sports betting as a segment literally took a pause. Slowly but safely, we are, however, seeing signs of activity coming back, even though it's not back to its full potential just yet.MĂĄns will later talk more about this in his presentation. But as you can see in the circle to your left, we estimate that revenues would have been roughly 10% to 15% higher if sports would have been on as normal during Q2. And obviously, our EBITDA margin would have seen a significant lift. Next slide, please, that is 6. As a direct effect of the corona situation fueling all digital industries, the digital gambling share of total gambling has gone through the roof. Putting this into context, the global iGaming share was in January 2020, 13.2% but is now closing in on 18%. This equals a growth of 36% in the first 7 months of 2020. In Sweden, the digital share is also growing, but considering it is already high actually expected to reach close to 70% by the end of 2020. The digital shift is not as evident here as elsewhere.In the context -- in this context, it is, of course, extra comforting to learn that our share of revenue is coming from outside Sweden, has increased substantially during the quarter. We've seen positive development in Japan as well as Norway and Denmark. And of course, thanks to the addition of Lead Republik also from other parts of the world. In our last presentation, we estimate that revenues from outside the Nordics to be roughly 20% in Q2, and we managed to deliver 19%, which is the number available in the lower right corner. Next slide, please, Slide 7. Now to some operational highlights. I previously talked about our strong operational ability. And I therefore, want to elaborate on some of the things that we have been working on. Q2 was an intensive and productive quarter where we managed to roll out many initiatives that are absolutely essential to support our future growth, but also the essence of what I think makes Raketech different from other affiliates. To be able to scale efficiently and to constantly learn from mistakes, we aim to automate and standardize everything that we possibly can. This quarter, we, therefore, built and implemented an automated SEO audit system, quickly identifying deviations positive or negative and putting the finger on what needs to be fixed and what can be learned. That time, I spoke about our unique AI-powered top list, which we now have operating on 30 of our sites with promising results. A core part of SEO is furthermore, as you might know, relevant and engaging content. To be able to efficiently scale our talented content creators, we have therefore built and implemented a central content bank, automatically identifying the best-performing content. The system then allows for the content to be translated and reused on other products on other markets. This sounds easy, but it's normally a very manual and complicated process, which we, with our content bank, now have made super efficient. Furthermore, we've migrated key assets in Denmark, Sweden, New Zealand, Finland and India onto the same technical platform. And by doing so, we allow for this product to expand geographically at a low cost. The Indian assets has since migration, by the way, doubled its traffic even though the numbers are still very small. Furthermore, in May, there was a major Google update, as you might remember. Generally, we did not experience any major negative impact, which once again gives us comfort that we're on the right track, specifically as Google becomes better and better at identifying assets that are not only technically well built, but also, of course, relevant to the user. Google updates are something that will keep coming and something that generally is very good, simply because they aim to promote what is most relevant for the user. However, for a company like us, it also points out -- point on the importance of product diversification to ensure the risk in our portfolio of assets is well balanced. And with that, I mean the need for more products like the TV sports guide or How To Bet, which I will talk about soon. Another big thing for us is that we -- during the quarter, decided to permanently transition into what we refer to as a remote-ish office setup. Our staff satisfaction is all-time high. Our productivity levels are better than ever and applications for new roles once being announced as remote-ish have increased with over 400%. So the decision was easy. And as a bonus, we expect to be saving up to EUR 200,000 per year in office-related costs alone. Money better spent on growing the business. Last but not least, we have intensified our U.S. efforts. During Q2, we delivered a new product targeting the American audience, which I talk will briefly about on the next slide. We have also secured commercial agreements with most of the major operators. We obtained another license this time in Colorado, and we have received preliminary positive regulations from West Virginia and Pennsylvania. Furthermore, we are in the midst of developing and adjusting the -- in Scandinavia so popular TV sports guide to be ready for launch in the U.S. in Q4 of this year. All in all, high level of activity during the quarter and much, much more in the pipeline. Next slide, please. In terms of commercial milestones, targeting the user, we have worked hard to build and launch 2 major ones in Q2. The first is a completely new product targeting the U.S.A. on the domain, howtobet.com. It's an informative site targeting the relatively new to online gambling audience. This recently launched and we're trying it out, but the interest from operators in the U.S. is already high. We intend to grow howtobet.com initially by investing in paid media, but are of course, in parallel investing significantly in ensuring it takes a solid organic stance in the long run. If everything goes well, we expect some revenues in Q4, but anticipate 2021 to be the big year for How To Bet. Within the eSports segment, we have completely rebuilt and relaunched our Esportsguide.com. Worth mentioning about Esportsguide is that a large portion of the traffic is coming from the U.S.A. and since our increased efforts already initiated in Q1, traffic numbers have increased 10x. I don't expect any major revenues from this product soon. But seeing the site grow, I would not be surprised if 2021 could be the year when it gets a breakthrough. Next slide, please. And we are on Slide 9. Looking at the part of our offering, targeting our customers, the operators were working path to major milestones during the quarter. The first one is what I referred to earlier, the Extended Audience product. Essentially, we use enriched data that we've gathered within our own large ecosystem of assets to help operators target specific audiences on external platforms. And by doing so, we help the operator to get better return on their external marketing spend at the same time, as we add a new revenue stream to our existing business. We're currently running it in a test phase with one of the major operators, and we still have some fine-tuning to do. In the long run, I, however, believe that this could be an important complement to our more traditional affiliation sales. It will most likely not be our largest revenue stream, but it has potential of making at least a substantial contribution. We hope to be able to roll this out already this year. And to my knowledge, we are unique in our industry to be able to offer this. As I've mentioned before, we have noticed an increased demand for transparency from operators coming with market maturity. This is also why we have launched a VIP program available for all major partners. In the VIP program, we share data insights about specific operators' performance, against aggregated industry data as well as granular comparisons against our household brand, Rapidi. By doing so, we help the operator improve its performance, which, in the long term, creates better and longer-lasting relationships. Speaking about relationships, our embedded services program, where we act on behalf of the operator, essentially managing their affiliate acquisition, we have secured yet another contract during the quarter with one of the major players. All of the initiatives mentioned on this slide are steps forward on our journey to transition from affiliation only to the iGaming performance marketing partner. Now to what you have all been waiting for, the financials in further detail. Over to you MĂĄns.

M
MĂĄns Svalborn
Chief Financial Officer

Thank you, Oskar. And let's start on Slide 11, please. We saw a 24% growth in revenues for Q2 compared to 2019, which essentially came from our recent acquisition, Casumba and Lead Republik. Disregarding these acquisitions, our organic growth was just slightly negative of 1.2%. When comparing Q2 versus Q1, we saw a similar development with increased total revenues with 7.4% and organic growth was as well, slightly negative of 2.5%. We are obviously not happy with a negative organic growth, but it has been a volatile quarter. Q2 was impacted by COVID-19 that specifically affected our revenues from sports. I will go through the sports vertical comparison in the next slide, but we have seen quite a significant drop in this vertical, impacting our top line. Oskar indicated a loss in revenues of 10% to 15% from sports, which would equal about EUR 0.2 million to EUR 0.4 million a month in lost revenues. In addition to this, for the specific month of June, we had some seasonality effect, but there was also some hesitance from operators ahead of the reregulation in Sweden. This led to June being the lowest month revenue-wise of the quarter. With these external factors in mind and the fact that we've managed to navigate through the quarter with flattish to only slightly negative organic growth compared to previous periods, we are cautiously optimistic for the long term. It is an indication that our operational performance is showing results.Next slide, please. With regards to the revenue split, revenue share has been quite stable. As I've mentioned before, operators have to -- have been to some extent, more inclined to go with more revenue share simply because it's more of a performance-based model. We have seen an increase in CPA revenue, driven primarily by the addition of Lead Republik, which predominantly has CPA. The decrease in flat fees is primarily driven by the decrease in sports revenues, where we normally sell a higher portion of flat fees, and specifically for our TV sports guide product. On a general note, and I have said this in previous presentations as well, we continue to assess the right balance between the different revenue models. The assessment is dependent on several different factors, such as market segment, operator and to some degree, macroeconomic factors.In our vertical split, casino related revenues have increased from 78% to 89% in Q2 compared to Q1 this year, and sports have had a matching decrease in relative revenues. This is, as Oskar pointed out in the beginning, a consequence of COVID-19 and canceled sports events. And as I've mentioned in the previous slide, has impacted our revenues for the quarter. The acquisition of Lead Republik has also led to higher casino-related revenue as their current portfolio is tilted towards this segment. Finally, revenues outside of the Nordics have increased from 14% in Q1 to 19% in Q2, very much in line with our communication in the previous presentation. The increase stems primarily from Lead Republik with revenues primarily from New Zealand, Germany and Canada. And worth mentioning as well, our Japanese efforts through Casumba have continued to develop positively and according to expectations and has continued to contribute to our increased revenues outside of the Nordics. Next slide, please. Net profit for the quarter amounted to EUR 1.2 million. The main item relates to depreciation on our intangible assets. These assets consist of player databases, other intellectual property and the technical platform, primarily related to Casumba, CasinoFeber and Lead Republik. These assets are depreciated over a period of 3 to 5 years and are impacting our net profit as illustrated in the diagram. The other items below EBITDA are minor, but worth pointing out is that the only cash affecting item relates to the interest expense of EUR 0.05 million. Next slide, please. Total assets amounted to EUR 82 million, of which the majority relate to our intangible assets. On our liability side, amounts committed of EUR 9 million consists of expected earn-outs, which primarily relate to CasinoFeber, Casumba and again Lead Republik. We have during Q2, we valued the earn-outs related to Casumba of about EUR 0.8 million as its performance have continued to develop positively. Worth mentioning as well is that we have had a positive development during the quarter with regard to our cash flow, that has remained on a stable level. And I will go through this on the next slide, but it has enabled us to repay EUR 1.5 million related to our credit facility with Swedbank. And you can see this on the borrowings in the balance sheet. Next slide, please. This slide illustrates our cash flow bridge Q2 versus Q1 of this year. Net cash from operations of close to EUR 3.2 million is up from EUR 2.6 million compared to previous quarter and has increased with higher profitability, but also from a positive development in our working capital and more specifically for our trade receivables. As I mentioned in the previous slide, we have repaid EUR 1.5 million related to our credit facility with Swedbank. Net cash from investing activities relate to primarily earn-out payments of EUR 1.6 million and cash flow from finance activities relate to interest and lease payments. Disregarding the payment of our credit facility, we have a positive net cash flow of EUR 1.5 million for the stand-alone quarter, up from EUR 0.5 million compared to Q1 of this year. And these increases driven, as I mentioned before, essentially from higher profitability, lower earn-out payments and a positive development from our trade receivables. Next slide, please. This slide illustrates our margin in Q2 of this year compared to last year. I went through something similar the last presentation, and Oskar mentioned it as well, but since our reported EBITDA compared to Q2 of last year is quite significantly lower, I'll walk you through the contributing factors behind this in a bit more detailed perspective. The EBITDA margin in Q2 of last year was 51.1% compared to 40.2% now in Q2, and the bigger line item, bringing the EBITDA down related to direct costs. We have, during the last year, added new products and offerings, the main ones being Rapidi, paid media and the most recent one, Lead Republik. These are all lower-margin products but are essential for us to be able to be the full-service performance marketing company that global operators are looking for and essential for us to be able to reach a much bigger geographical step. With regard to the employee benefit expenses, we have seen higher costs in absolute terms. These are as well a direct effect of the transformational change and geographical expansion. We have, during the last year, strengthened the management team, we've strengthened our data and sales analytics team and we have expanded our organization to cater for an increased focus on M&A and entry into the U.S. market. Current level is, however, more or less scalable, which means that as we increase revenues, it can have a relative positive effect on the EBITDA margin as we see in the diagram. The same goes for other costs, which we have in absolute terms increased as we have added Lead Republik and Casumba, but the relative effect on our margin with increased revenues is minor. So to sum up, the increase in costs and its relative effect on our EBITDA margin relates primarily to added products such as Rapidi and Lead Republik. We have also made deliberate investments in our organization to ensure we can deliver on our operational goals. Next slide, please. This slide illustrates the margin development between Q1 to Q2 2020. Our direct costs in general have been stable, but with -- again, with the addition of Lead Republik as a lower margin product, increased revenues for this product will have a downward push on our total margin. Employee costs have been stable and thus have a positive margin contribution as revenues increase, similar to the effect in the previous slide. And we have seen a decrease in other costs primarily as we haven't needed to take any provisional bad debts this quarter. And this is an effect of extra focus from the organization in this area. Thank you. And back to Oskar, on Slide 19, please.

O
Oskar MĂĽhlbach
CEO & President

Thank you, MĂĄns. That was the last slide of today. So please allow me to wrap up with today's key takeaways. In times of volatility, it is important to have long-term strategic goals. And here at Raketech, we have 4 of them to ensure we keep the right focus. In terms of establishing presence on 3 continents, we've taken important steps in this direction with reference to the increased U.S. efforts, our standardized platform that allows for cost-efficient rollouts to new markets as well as positive development in Japan. With regards to having 4 to 5 flagship products, the launch of howtobet.com ticks this box. And I'm a little extra excited about this one as it is our first completely in-house developed product of that character. The green arrow in front of our ambition of diversifying our product offering is supported by How To Bet, but primarily perhaps by the Extended Audience product that I talked about earlier. The fourth goal is to lower our dependency on the casino vertical. But during the second quarter, this has actually developed in the wrong way, if you look at it in absolute terms as an effect of sports betting being lowered. I would, however, still like to keep this as a green arrow pointing upwards simply because of the many initiatives that we have done, targeting sports. And also, please bear in mind that the reduced sports betting revenues are expected to return back once the COVID-19 situation has improved.Looking at the financial headlines, we grew with 24.1% during the quarter, primarily thanks to acquisitions. Our sports sales dropped significantly due to corona, but was compensated by a strong casino performance. We managed to maintain a stable EBITDA level quarter-over-quarter despite changes in product mix and investments in product development, and our July numbers amounted to EUR 2.4 million with a margin of around 40%. With regards to milestone and events, our revenues outside of the Nordics came in as projected at close to 20%. We also launched howtobet.com to target the U.S. market. And speaking about the U.S., we obtained another license, this time in Colorado. Furthermore, we launched the Extended Audience product, as previously mentioned, and we decided to move into what we call a remote-ish way of working. Going forward, we expect continuous volatility with regards to COVID. Exactly what will happen or when, is simply not possible to predict with certainty. Long term, we don't expect any significant effect, besides, of course, the digital share of gambling being accelerated, which is positive. But short term, the uncertainty is still high. Also we believe that we have not yet seen all the consequences from the Swedish temporary legislations imposed earlier this summer, and we are, therefore, of course, closely monitoring this development. If everything goes well, we intend to increase our investments into promoting howtobet.com as well as the TV sports guide in the U.S. Additionally, we also aim to make efforts to take some of our products already proven successful into new markets. With this said, it is not unlikely that we, in the short-term, might see slightly lowered margins as a result of these investments in order for us to create growth outside of the Nordics.Finally, I want to highlight that due to market uncertainty relating to the current COVID-19 outbreak, we have, during the quarter, chosen to be extra careful with regards to M&A as the risk assessments have been extra challenging. This should, however, not be interpreted as us having lower M&A ambitions. As a matter of fact, this is quite the opposite. We are debt-free and operationally stronger than ever, and I look very much forward to using M&A as the tool to propel our growth ambitions, once the situation has stabilized somewhat. And with that said, that was actually all for today, let's see if there are any questions, we can jump to the next slide.

Operator

[Operator Instructions] Our first question comes from Christian Hellman from Nordea.

C
Christian Hellman
Director of Small and Mid Cap

A question on the NDC in the quarter, the new depositing customers, which were almost 41,000 and up quite significantly versus, well, both last quarter and the year before. Can you comment a bit on the NDC intake? And how we should think about that number going forward as we sort of try to -- try to estimate what you could generate in terms of revenues for the second half of the year? I mean, I'm trying to sort of get some comments on the quality of the NDCs where they are from in terms of geographical basis, et cetera.

O
Oskar MĂĽhlbach
CEO & President

Yes. Christian, thanks for that question. It's a relevant one. I sort of expected that would come. It's -- the vast majority of the NDC intake, which is quite large, as you can see, is coming from Lead Republik, but also to some extent, from some of our own paid efforts built into that type of business is unfortunately, is slightly lower CPA values for those customers. So I would -- I don't want to guide you exactly on how this will pan out. But we will see, to a larger degree, that our NDC intake will be slightly higher than what you've been used to, but then potentially with a slightly lower value for customers.

C
Christian Hellman
Director of Small and Mid Cap

Okay. All right. And also, can you speak a little bit more about the U.S., which you're entering now or at least, it's a quite recent entry for you? How should we think about the U.S., I mean in terms of M&A? Is that a possibility in the U.S.? Or just some more comments on the U.S. expansion? And how we should think about that, I guess, perhaps not this year but more sort of into 2021, '22?

O
Oskar MĂĽhlbach
CEO & President

Yes, I -- also a good question. I mean the U.S. it's a hot topic. It's the largest gaming market in the world, and it's going through a rapid transformation with high level of digital growth. So of course, we are -- we have the U.S. as a major target on our agenda. And as with every market, we plan to do -- to enter the U.S. with a mix of all our tools in the toolbox. Of course, we are reusing successful products that have been successful on other markets, we try to see if they fit the U.S. We're also building initiatives from scratch like the How To Bet products and so forth. But of course, obviously, to make a significant footprint in the U.S., acquisitions are always interesting, and we are intensively looking for them. But we have been due to the corona situation, slightly slowed down within that area because it has been hard to assess where this is heading. So it would have been not a responsible decision to do to make any major ones during this time. But of course, acquisitions is very highly prioritized for us in the U.S.

C
Christian Hellman
Director of Small and Mid Cap

And generally, in terms of M&A, what are the opportunities out there once you sort of take on focus for acquisitions? I mean, are there a lot of the targets out there, good quality ones? What's the playing field?

O
Oskar MĂĽhlbach
CEO & President

That's a good question. It's -- I would say that our approach to the U.S. might be slightly different than the more traditional approach to gray markets. The U.S., it's a more educated market and the users in America are expecting to experience higher user value from the products than maybe customers on gray markets. So in the U.S., we're basically looking for more high-quality assets, not necessarily the more traditional top list, but assets that are capturing and engaging customers in a good way. But on gray markets, we still have basically the same focus as before, but we are very much more thorough in our analysis than maybe before when we acquire companies. They have to add industrial logic to make sense. We're not simply buying revenue for the sake of buying revenue. They need to add value to the business as a whole.

C
Christian Hellman
Director of Small and Mid Cap

Yes, that makes sense. But well -- how does the pipeline look like? I mean, is there a handful of targets that you're sort of in discussions with or have on your radar? Or are we talking 20, 30, 40? I mean, just to get a sense of how the pipeline seems to be at the moment?

O
Oskar MĂĽhlbach
CEO & President

Yes. We have M&A team in place. It's led by our Former CFO, Andreas Kovacs, and one more person. So they are dedicated at looking at M&As, and they have a certain objective to have at least a handful of objects constantly in dialogue with. So that's our ambition that is about what we can handle at the moment. So roughly, we push a handful of objects and discussions forward at all times. But they have to make sense for the business in order for us to actually start it.

Operator

[Operator Instructions] Okay. There appears to be no further questions. So I'll hand back to the speakers for any of their remarks.

O
Oskar MĂĽhlbach
CEO & President

All right. Thank you very much for today, was a long session. Thank you for your patience. And we look forward to seeing you in November again for the Q3 presentation. Have a great day.

Operator

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