RVRC Holding AB
STO:RVRC
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Now I will hand the conference over to CEO, Paul Fischbein; and CFO, Jesper Alm. Please go ahead.
Thank you, operator, and good morning, everyone, and welcome to this conference call where we will address the development of the third quarter of our fiscal year 2022, '23. My name is Paul Fischbein, and I am the CEO of RevolutionRace. And today, I am also joined by the company's CFO, Jesper Alm. For those of you who are not familiar with the RevolutionRace, I will give you a brief introduction. RevolutionRace is an outdoor brand, offering a wide range of outdoor products for people with an active lifestyle. We operate with a digital D2C model, meaning that we skip the middlemen and sell our colorful products directly to our consumers only via digital channels. By doing so, we can offer quality products with what we call unmatched value. RevolutionRace was launched in 2014 and has been listed on Nasdaq Stockholm since 2021. Our headquarter is located in Sweden, and we have approximately 130 employees. Our vision is to become the most recommended auto brand in the world. And even though we launched in 2014, we believe that we are just starting our journey. Our mission is to make nature accessible to everyone through our unmatched value. Nature is our playground, as we say. And as you understand, we have high ambitions, and we already managed to grow RevolutionRace into a truly international brand. We have customers in more than 35 countries with a total of 18 localized web shops. And on top of our own websites, we also sell our products via marketplaces such as Amazon in many markets. Besides our own organization of approximately 130 FTEs, we also have close partnerships with 3 warehouse operators in Germany, Sweden and also in the U.S. to facilitate high service to our customers. We design all our products in-house and work together with more than 25 suppliers in the production process. What really makes us stand out is our engaged customer community. We are proud of our global community, which now amounts to more than 1 million followers on social media platforms. And last week, we reached 500,000 followers on Instagram. Our community and our ambassadors is also an important channel for inspiring people and showing our wide range of products. We work hard and creative to maintain a high degree of engagement and also encourage customers to share user-generated content with us. You can see some of the content produced by our community here on the slide. And we know how to communicate with our customers, which has resulted in more than 470,000 unique product reviews, which is important. It strengthens our brand position, and it is something that we are very proud of. We have satisfied customers, which, of course, is crucial to any company and the average rating of 4.6 out of 5 confirms that. Close relationships with our customers and their product reviews have always been a key part of our strategy. The reviews help other customers to find the right products, but they also give us valuable feedback in our product development process. And I wanted to highlight this as I feel it is one of the most important assets we have. 0.5 million satisfied customers in many countries is something we are very proud of. Now let's take a look on the highlights during the third quarter of our fiscal year, and we can see that the growth journey continues. We are pleased to see that RevolutionRace continues to increase sales with good profitability in the third quarter of the fiscal year. Net sales in the quarter amounted to SEK 414 million, which corresponds to a growth of 13% year-on-year. One should then also be aware of the very strong comparison numbers from last year. RevolutionRace is an international brand, and we are continuing to grow and to win market share in many markets. In the third quarter, the Nordic markets accounted for a total of 78% of our total sales. And this is a confirmation that we are on the right path in our international growth strategy. The Rest of the World region grew by 32%, and the DACH region continued to grow by 18% in the quarter. The sales development in the Nordics decreased with a negative growth due to a tougher consumer climate. However, we estimate that our performance in the Nordics was in line with the general market development in the region. In the Rest of the World region, we are pleased to see that the Netherlands is showing strong performance, which is, of course, very promising when looking at the future. EBIT for the quarter amounted to SEK 87 million, corresponding to an EBIT margin of 21%. This is a good operating margin given the market climate. And we noted a substantial discount in the market due to high inventory levels, but we still succeeded in keeping our gross margin at a good level. So it is important for us to stay away from heavy discounting. Instead, we have chosen to slightly increase our marketing investments and long-term brand building activities. We believe with our strong market position and financial position that now is a perfect time to somewhat increase such investments in growth markets. However, of course, at the same time at the balance level. When comparing to the result in the same quarter last year, we also have currency impact, negatively impacting results of SEK 9 million, which Jesper can describe more in detail later in the presentation. I also want to highlight the continued strong cash flow in the quarter. Our inventory continued to decrease for the second consecutive quarter by around SEK 46 million in the quarter, which is in line with the plan that we have communicated previously. The decrease in inventory has contributed to strong cash flow from operations amounting to SEK 101 million. And we are leaving the third quarter with a net cash position of SEK 130 million. And this feels extremely strong and something we want to highlight in the current market and provides a strong foundation for the future. We can, of course, deep dive into many areas, but one area I really want to highlight this time is our footwear category. Our biggest product category remains pants, but it is promising to see that other product categories are growing with high customer ratings as well. Our shoe assortment is also a result of our customers' feedback and our strong design and product development team. We've started with launching one model in 4 different colors, a little bit more than 1 year ago. And today, we offer 3 different models in 30 colors, and we see that sales are growing fast, starting to actually show impact on total numbers. This inspires us to continue our focus on launching timeless high-quality products that can be used often in over a long period of time, which is also an important part of our sustainability efforts. And we strive to always to act responsible both socially and environmentally and we call it a responsible race, which includes 6 priority areas. And one interesting fact here is that we asked our customers how often they have worn their RevolutionRace pants. The answer was that 59% answered that they had warned their pens more than 100 times. And this confirms our efforts in producing and offering durable products that can be used over and over again. We are also proud of our very limited overproduction, and this is also commercially very important as we want what we call the running assortment to account for the vast majority of our sales. Thus, our fashion and trend risk should be low. Now let's take a quick look at our markets in Q3. And as I already mentioned, the non-Nordic countries accounted for a total of 78% of our total sales. The Rest of the World region grew by 32% in the quarter, with particularly positive development noted in the Netherlands. The DACH region continued to grow by 18% in the quarter. Sales development in the Nordics decreased, however, with a negative growth due to a tougher consumer climate and a weak market. We estimate that we perform in line with the general market development in the Nordics. And with that, I would like to hand over to our -- to the company's CFO, Jesper Alm, who will present and walk through the financial performance. Jesper, please go ahead.
Well, thank you, Paul, and a good day to you all. I will talk you through our financial performance during the third quarter, starting off with our net sales development. As already mentioned, net sales in the quarter amounted to SEK 414 million corresponding to a 13% growth in net sales and 7% growth in local currency, fueled by strong growth in the DACH region and the Rest of the World. Net sales over the last 12 months exceeds SEK 1.5 billion. Looking into gross profit, we noticed a good development with a growth of 12%, which is in line with the net sales growth of 13%. Gross profit in the quarter was SEK 300 million, growing from SEK 269 million last year. And gross margin came in at a strong 72.6%, which is a decrease by 0.5 percentage point compared to the same period last year. Gross margin was positively affected by a favorable market mix, which was, on the other side, offset by increasing cost of goods sold due to the strengthening of the USD.Moving on to operational expenses. We see an increase in personnel expenses compared to Q3 last year. However, in line when it comes to as a share of net sales. Other external expenses increased to SEK 286 million compared to SEK 150 million a year ago, and this is due to higher logistics costs, increased market investments and somewhat higher overhead costs in absolute terms. EBIT for the quarter amounted to SEK 87 million corresponding to an EBIT margin of 21.1%. The lower margin compared to last year is explained by a somewhat lower gross margin, increased investments in marketing and higher logistics costs. On the topic of balance sheet, we see minor movements overall, but I will highlight some topics on the following slides. Net working capital as share of net sales decreased in the quarter as a result of sales growth and improved inventory levels, which leads us to the next slide. Our inventory continued to decrease for the second consecutive quarter by around SEK 46 million to a total of SEK 398 million, and this is pretty much in line with what we've communicated over the past couple of quarters. Cash flow. The decrease in inventory together with the operating result has contributed to strong cash flow from operations amounting to SEK 101 million, and we're leaving the third quarter with net cash of SEK 130 million. So in conclusion, RevolutionRace has a solid financial position, growing profitably with strong cash flows, with net cash and an unused credit facility of SEK 600 million by the end of the quarter. I think that sums up my part. And Paul, over to you.
Thank you, Jesper. So to summarize, we are pleased to see that RevolutionRace continues to increase sales with good profitability. We are now a truly international brand with non-Nordic sales accounting for a total of 78% of our total sales. We have a well-positioned customer offering, combining a strong brand with high-quality design and competitive prices with great potential to continue to win market shares in many markets. Our focus is to generate long-term profitable growth, and we note that continued profitable growth, which so far in the fourth quarter, the current quarter is slightly better than the third quarter, and we see strong development in the DACH and the Rest of the World regions. And that concludes our comments on the results. And before we finish, I would like to take the opportunity to thank the whole team at RevolutionRace, our customers, shareholders and partners. I look very much forward to continuing to build on RevolutionRace success together with all of you. And with that, we are now happy to answer questions. So operator, do we have any questions?
[Operator Instructions] The next question comes from Benjamin Wahlstedt from ABG.
So despite some of the products being sold right now, having been bought at dollar peaks, I imagine, you improved the gross margin quite significantly sequentially. Of course, geographical mix and better euro rates support this, but have you also adjusted prices? And if so, what magnitude, what markets does this relate to?
Hi Benjamin, I have some difficulties hearing your question, but if I heard correctly, it was related to the gross margin. And yes, we are very pleased to see that in this weak market climate, we managed to keep the gross margin on a stable level, more or less in line with last year. And at the same time, we have seen that price of the products, the cost of goods sold is increasing slightly, mainly due to the U.S. dollar impact. However, we can offset that a little bit through our market mix. And we have seen that our average order value have, as you can see, have also increased slightly. So that is also an explanation behind that, that we sell some products that are slightly on higher price levels. I don't know if that answers your question, I didn't hear it.
Yes. I think I think that was a good answer. And I can sort of follow on that as well. Is it possible to quantify this change in product mix or category mix in any way?
We see, for example, as I mentioned, that the footwear assortment is growing. However, it's still -- I mean -- and we are -- that is very promising. And so that is taking some share of sales, and that category has a higher share of -- has a higher average order value. However, it's difficult to quantify it. We do see that the market mix has a higher impact, I would say, than the product mix in order to increase the average order value.
Yes. Perfect. Is it also possible to talk a bit more about the increased logistics costs. Is this related to index rent increases for TPL partners? Or is there something else? We can know about here?
Yes, it's more operational driven. What we have chosen -- the main cost -- the main driver behind that increase in cost is related to that we have increased availability for our customers. For example, we -- a year ago, we did not expose, for example, products that were lying on the shelves in the German – in German warehouse to the Swedish customer, for example. So now we do expose and make all our products sellable to all our customers in Europe, meaning that some of the -- some freight prices goes up slightly, as you can understand, shipping a product from Germany to Sweden is slightly more expensive than domestically within Sweden. It doesn't -- I mean, it's not a big share of sales, but it has some impact. But so it has some cost impact. But on the other hand, it also contributes to higher customer satisfaction, which, of course, also worth something.
Yes, absolutely. When does this change happen? Do we expect additional pressures from here in Q4?
No, I wouldn't expect that. We have gradually increased that over the last couple of months. And I mean, it's not a big, big increase in cost, but it's there, and it has some slight impact on the numbers.
Perfect. And then one final question. You commented in the presentation on the Nordic market developing roughly in line with you. Do you have a rough understanding of the DACH market growth in the quarter, please?
We don't really have a good data point on the specific product segment we are operating in. We do believe that we are growing faster than the market in Germany. We have seen some data points on, for example, Swedish [indiscernible] spot index in Sweden. So we know how the Swedish market is developing. And there we can see that we are more in line with the market development. But we haven't seen any -- it has been difficult for us to find good data points in Germany, but we believe we are performing stronger than the market in total.
Yes. Perfect. Actually, one final one. Could you perhaps comment on the recent campaign pressure? I would imagine this is most significant in the Nordics with several large players running these deep discounts. What do you see here going forward in terms of campaign pressure?
Yes. Yes. We do note -- we have noted definitely that some players have had high inventory levels. And as a result of that, we have seen heavy discounts and clearances, especially in the Nordic markets, that's for sure. We do believe and hope that will slightly or gradually decrease as I believe that many of those inventory levels have come down and it was more the winter season products that were discounted. So it's very difficult for me to estimate how other players or the markets will develop in [indiscernible]. What we can say is that we are very satisfied now with our inventory position. We feel that -- I mean, we said earlier that one should expect our inventory to flatten out over this year. And I guess we can say that we have delivered on that, and we have a very healthy financial position and inventory position going forward now. So I think it has been important for us not to take part in that heavy discounting. It has been important for us to balance growth and keep competitive pricing to the consumers and balance that with a good gross margin, which I believe we have also managed to do, even though we have seen a currency impact now impacting us a little bit on COGS. But -- so we are very satisfied with our own situation and position, and it's hard to estimate how other players will act going forward. But in -- over the last couple of months, we definitely noted heavy discounts in the market. And at the same time, also weak consumer climate. So given those 2 facts, where I think we are very satisfied with the performance that we have shown in this quarter.
The next question comes from Niklas Ekman from Carnegie.
A couple of questions from my end as well. Firstly, on the Nordics. Can you talk a little bit about the reason for the weakness we've seen? This is 4 quarters now with almost consistent decline. And I know you talked about a weak underlying market. But is -- do you feel that your brand has reached maturity in the Nordics? Is there any chance to revive growth in the Nordics? And is that a priority for you? Or do you rather see that you will focus on the potential outside the Nordics?
Niklas, well, we always try to grow on all our markets. As you mentioned, we are in a more mature phase. However, I do believe that there is still a lot of growth opportunities in the Nordics. So we hope to deliver more on -- within those markets going forward. I mean we are seeing that we are becoming more -- definitely becoming more of a truly international brand with 78% of our sales now coming from Nordic markets. And I believe that going forward, this market will continue to grow faster than the Nordics. As I just mentioned to Benjamin, we have seen some weak consumer climate in general in the Nordics. We have, of course, noted that. We read what everyone else is reading. And at the same time, we have seen quite aggressive discounting, especially in the Nordic markets over the last couple of months. It's difficult to say how that impacts us, but I would guess that all those 3 things added up together, yes, say something in total.
Okay. Yes. Thanks for that. And on the other side, of course, you have Rest of World, which is now almost equal to the Nordics in size. Can you talk a little bit about which markets in particular? You mentioned Netherlands here, for instance. And also on the same topic, you talked about increased investments in growth markets. Can you give us some examples here? Are you talking basically this more marketing investments or anything else?
Yes. So as you noted, I mentioned Netherlands, and that's because we see that Netherlands is now becoming one of the definitely biggest markets within that region. And at the same time, it's continuing to show very promising growth rates. So it's definitely a market that we will continue to focus and invest in. I think now is a good time to invest in that market and some other markets, given the market situation. It gives us -- I mean this climate also gives us some opportunities. I also want to maybe the mentioned, as you are asking, maybe I can mention the U.S. launch. We launched in the U.S. some time ago, but we sort of started to push the U.S. button just I would say, January, and we have since then seen very promising development in the U.S. We still have some infrastructure work to do there relating to warehousing and freight. But it's interesting to see that our consumer offering looks, yes, very promising in the U.S. So we see that the U.S. customers, they seem to like what we're offering. However, bear in mind, it's still small numbers, but growth rate is very strong and the beginning of -- I mean, since the launch in the U.S., we have seen very promising patterns if you compare it to when we, for example, launched in Germany. So that is maybe some market that we can also mention at this point, even though it's still small.
Very interesting. Can I follow up on that? When you started in the U.S., I believe you had a very limited assortment, a very small wage. Are you now approaching full assortment in the U.S.? Or are there still huge local adaptations? Are you still selling a more limited assortment? Is the customer behavior very different from other markets?
Yes. So when we launched in the U.S. in the beginning, we more or less focused on the sales generated from Amazon in the U.S. And that assortment accounts for -- that we expose on Amazon or what we sell on Amazon, you can say it's roughly 10% of the assortment. What we have now done is that we have started to push the button when it comes to our own e-commerce. And doing that, basically, the full assortment is now exposed to the U.S. customers. So that is definitely one thing that has happened over the last couple of weeks and months. And of course, that is one reason why it's taking off. That's one thing. The other thing is that we have started to invest more in marketing, that is one of the reasons why the margin is slightly lower compared to -- is lower compared to the same quarter last year. We are increasing marketing investments in some selected growth markets. We believe now is a great time to do that. Netherlands and U.S. are 2 examples where we have increased marketing in relation to sales. However, as you know, you know us from the history, we like to balance growth with profitability. So one should not expect us going bananas on marketing investments. We do it on a balance level, but yes.
Very interesting. And on the topic of margins, you now report margins of EBIT margins of 21% here, both in Q3 and on a rolling 12-month basis, that's well below your 25% target. How confident are you that kind of the margins have now bottomed given that cost inflation is starting to ease, talking about markdown levels coming down? But at the same time, you're talking about increased investments in growth markets. So how confident do you feel that maybe margins are now near the trough and should hopefully continue higher from here?
Yes. We're looking at this quarter. It's worth mentioning that we are compared to a very strong quarter last year. So I'm not concerned on the result development if we can just continue to deliver strong numbers, as I believe we are doing in this quarter. If you look at the difference in EBIT or on our results compared to the same quarter last year, you can split it up into 2 buckets. One is more related to balance sheet-related currency impacts, which is sort of related to hedging programs that we have. And if you have follow-up questions, maybe Jesper can deep dive into that. The other bucket is more operational and the vast majority of the difference is related to the currency impact, not operationally related. The other or more operational-related bucket is split up into, I would say, 3 things. First, we have a slightly higher fixed cost. We have more employees compared to the same period last year. However, bear in mind that in relation to sales, it's -- the staff cost is flat. And also the number of headcounts have not grown over the last couple of quarters, which is, of course, important. So this is a comparison to a year ago. We have increased marketing investments in growth markets, as I mentioned. And then we also -- the third explanation behind this is also the availability, logistics costs related to product availability, as I mentioned, to Benjamin when you asked the question about logistics. We have some products now being shipped to consumers from Germany. It's not a big part of the sales, but it has some impact.
Super. Thanks for clarifying. And just to follow up there. I mean, given that you do reiterate your '23 '24 target of 25% margin. Do you feel that you can imminently reverse this trend and start to report a higher EBIT margin from here?
Yes. I mean we have a scalable business model. And if we look at the top line target, we have a target of SEK 2 billion next fiscal year. Since I took over as CEO, we have -- if we take the last 2 quarters and add them up together, we've seen a growth of 22%. And we see that in the quarter we are in now. We are also now again growing faster than the third quarter. We are, of course, humble about the market climate, but we do believe that the SEK 2 billion is definitely within rates. It is within range. It requires somewhat around 25%, slightly above that, maybe in order to reach the SEK 2 billion. So given that we have had 22% over the last 2 quarters, that is something that I at least feel that we can continue to aim for. And if we can deliver on that, I think that the margin target is also within reg and something that we are aiming for. And especially since the biggest explanation behind the result decrease is related to nonoperational currency impact. So that is, of course, difficult to control.
The next question comes from Emanuel Jansson from Danske Bank.
I think most of my question has already been answered actually. But just coming back to the exit rate in the quarter, you grew 7% organic in this quarter, and you're stating that you're growing slightly higher. Can we assume at least double-digit growth so far in Q4?
Yes. We are relating that not to the 13% growth rate, and that is of course that is a double-digit growth. And so one can expect at least that -- so what we do is that we don't guide what we do disclosed at this point is what we have seen so far in this quarter. And that is that we are growing. The sales is growing faster or higher than the 13% that we saw in the last quarter.
Okay. That's clear. And also coming back, maybe already answered, I can't not remember, but have you seen any sequential development? What was the sequential development in the Nordics and in Q4? What do you see from the customers?
Yes. If we look at the quarter itself, without going into too much detail, we can say that January and February, and this comes to all our markets, I would say, including the Nordics, were weaker, and it became stronger -- the growth rate came back to a level where we were more satisfied in March. And this has also continued into the quarter were now as we are growing now a little bit faster than the third quarter. But you can say -- I mean, the development that we see now and also saw in the last quarter is that it's the regions, DACH and the Rest of the World regions that are showing a strong development. That's clear.
Yes. Okay. And also coming back to you also, as you said in the presentation that you recently celebrated the 500,000 followers on Instagram. And that's obviously an impressive figure. And I mean you're now adapted to the online and social media world when it comes to driving this kind of business and doing marketing. And looking at other peers or competitors in the Nordics and also in Europe, you're growing your social media family at a higher pace and is it also reflected to the sales development, you would say, the number of social media growers as well?
It's hard to comment on, I think, what we do comment so far in this quarter is that we are growing slightly above the 13% when it comes to sales. But we are, over time, always trying -- I mean it is important for us to grow our follower base on the social media platforms. And we see that we are in total now, I think, above 1.2 million followers on the social media platforms, of which 500 million is on Instagram, that is, of course, very promising. It gives us opportunities to communicate with our consumers in a good way. Also, we do see that our customer database is growing. So we're able to communicate with the customers through, for example, newsletters. And -- but also very important is that our product reviews are growing pretty fast. We are now at 400 -- above 470,000 reviews. And I think I mentioned that in the presentation, but it's really an asset worth highlighting because that is -- yes, it has been important from the beginning, and it is increasingly important as we are trying to enter new markets on a regular basis.
And then maybe a last question from my side. In the recent 2 quarters, you talked about some changes in the marketing. And I think in the last quarter, you had some extraordinary campaigns from TV Commercial and YouTube series. And I think the quarter Q1, you also mentioned that you're targeting more converting traffic. Have you changed any of that strategy going into this quarter when you also say that you're targeting or increasing marketing spend in the growth regions?
Yes. That's a good question. And yes, we are -- I mean we are now operating locally in 18 different markets. So we are acting a little bit different from market to market. In some markets, we are more focused on building our brand as we are still small. And in some other markets, we are focusing a little bit more on higher converting traffic. So it's not the one size fits all. We are pretty much adapting it to every local market. So it's a bit difficult to give one answer to that question as it differs into 18 different markets.
And sorry, maybe last question from my side. It seems that you're satisfied with maybe the inventory level. So should we expect it to continue to slightly decrease in the coming quarters as well?
Well, we don't really guide on that. I mean we are satisfied with the inventory level. I mean, we are definitely one should be careful not to decrease it too much because we are definitely still in a phase where we want to increase our market shares and want to continue to grow with the company at the balance level. So I can't really guide that it will continue to decrease over time. And then what we do -- I mean, what you guys see is a reflection of a specific date, end of quarter. So it's really hard to estimate exactly what kind of level it will have next quarter. But in the next upcoming months, we will see some inbound deliveries of the products related to the autumn/winter season. And if that comes in, in already in June, it's hard to say, but we can expect it to come in, in July and August before the next season starts. So yes, that gives you some flavor without guiding concretely on it. But I mean, the main message is that we are very satisfied with inventory level. We have decreased it from it was north of SEK 500 million. Just a couple of months ago, we are now below SEK 400. So yes, it feels very promising.
Thank you very much, Paul. That's clear. That's all my questions. Thank you very much.
Thank you. And I believe that concludes the question-and-answer session. And before we wrap up, let's see if there are any questions also online. And then I will read the question and try to answer it myself. And the first question online is, can you expand on the margin profile of sales through marketplaces like Amazon compared to your own sites. So yes, we -- when it comes to the gross margin, we -- our sales price -- we totally control the sales price and thus, we also control the gross margin. We use marketplaces like Amazon as we are a marketplace merchant only operate with a commission-based model. We don't sell to marketplaces as a wholesale business. So thus, we can control the prices. And so the gross margin profile is somewhat similar to our own sites. When it comes to marketplaces, as I mentioned, it is a commission-based model. So the marketplaces take a commission. However, one can you can compare that to the own marketing mix that we have on our sites. So it's a slightly different business model since it's commission-based model, but gross margin is intact. And the second question is how have volumes developed through the quarter and into April. And as I said, it was a bit lower volume in the beginning of the quarter. It increased in the end of the quarter. And in the quarter, we are in now, we have today disclosed that so far in this quarter, we are growing slightly above the growth rate of 13% that we saw in the last quarter. And the third question online is that would you agree that 2022 Q3 was the final quarter impacted by [ COVID boost ]. And that's -- and the answer is that it's a bit difficult to exactly say what was behind the good sales. But I mean it's fair to say that the societies opened up during that quarter. We also saw that it was -- yes, so that is one thing that we can note. We do know and do note that sales in Q3 2022 was very strong. If you compare it -- if one compare it with the calendar Q4, our Q2 quarter, it was -- the Q2 quarter last year were SEK 397 million, and the sales in Q3 with SEK 367 million. So -- which means that the numbers were very close. If you compare the number of Q2 this year. This fiscal year, it was above SEK 500 million, and we are in this Q3 -- this year, we are at SEK 414 million. So it's almost SEK 100 million lower. So that gave some flavor that the third quarter last year was very strong compared to what we have seen in the past and yes, seasonality wise. And I guess that also concludes the questions that we have received online. And with that, I would like to thank you all for participating today and for your interest in us. We look forward to speaking to you again over the coming weeks and months. And may I also remind you that our Q4 report will be announced on August 15. And with that, thank you, and goodbye.