Troax Group AB (publ)

STO:TROAX

Earnings Call Transcript 2021-Q4

[Operator]

Good day, and welcome to today's Troax Group Presentation Q4 Report 2021. [Operator Instructions] I also must advise you that this conference is being recorded today. And I would now like to hand the conference over to your speaker today, Thomas Widstrand. Thank you. Please go ahead, sir.

[Thomas Widstrand, CEO, President & Director]

Thank you, and thank you, everyone, for calling in. And as you understand, I'm Thomas Widstrand. I'm the President of Troax Group. And I would like to share with then you some of the analysis or, let's call it, conclusions and comments around the fourth quarter financial development of Troax. And obviously, we'll do some comments also about the whole year. I will -- and those of you who have been following this kind of presentation before, I will follow what we call the quarter 4 reporting, which is on our web page. And for those of you who are trying to find it. If you go to our web page, it's troax.com. You'll find on the menu heading, which is called Investors. And if you then push Investors, you will come to a number of choices then of different reports, but you would go to what is called actually Financial Reports. And on the Financial Reports, you will then find then the fourth quarter 2021 presentation, which I more or less will follow. If you don't have it, you will be able to follow my comments in any case. But nevertheless, if you have it [ with you always ], it's a bit easier. So I'll start with the first page, and as always that I try to introduce the company by saying that we help people and organization to try to stay safe. And not only safe and sound, but also on solid ground. And with that, the introduction, very short introduction, I'll come into the third page where we have then the examples. The first example of the business area that we are working with, just so we have a brief introduction to Troax, if you're not very well acquainted. And first one is Machine Guarding. We have approximately, for 2021, 60% then of our turnover in Machine Guarding. As you can see from the picture there, these are typical examples then of the installations, where they will require some sort of guarding. In this case, it's an automotive process. So you can have all sorts of processes, of course, where you use machine guarding. And these sort of installations, we have all over the world, all parts of the world even, of course, it's more in the industrial and it's part of the one. Turning quickly into the second of our business segments or areas, we call it Warehouse Partitioning. And as you can see from also this picture, it's more of a traditional warehouse where people are perhaps not walking around, but they are using forklift trucks to pick up things and then dispatch it to customers. And I'll come back to, in a second, and with a few comments regarding what we call today automated warehouse, which actually is a combination of this Warehouse Partitioning and Machine Guarding. This Warehouse Partitioning is approximately 30% of our turnover. And last and, of course, least from a financial point of view, but not least from a, let's say, importance point of view is what we call Property Protection, which mainly is North European, let's call, operation. It's approximately 10% of our turnover. And as you can see from the picture, it's not really safety in the sense that you protect people from not getting hurt if something will go wrong. It's more about then protecting, of course, different kind of luggage or bicycles or skis or whatever you have that you have in some sort of storage solutions, normally in the cellar or could be in that particular or in other places. And I then come to Automated Warehouse, which as I said, is a combination if we talk of products that are used in machine guarding, whereas the application is more to the warehouse side. And as this picture tries to explain, and I know you have seen it before, it's a lot of different pallet racks. But the difference between this and what is more traditional, whereas is, of course, that this is highly automated. So there are different kinds of -- you can call robots or picking parcels that are being transferred from the pallets in different ways on conveyor systems and in different places here then you need a lot of safety. Because even if these are very highly automated installations, you normally need a lot of safeguarding because people are working here with maintenance, they do some changes or updates or whatever. And then, of course, you want to protect people who are normally working in some sort of receiving or dispatching area towards the customers. This is then something which has been developing very well in the last couple of years. And you obviously know what is driving this. This is obviously the complete demand for an increase in all e-commerce that you and I are obviously as consumers are also driving. So we've had a very good development in these kind of installations in the last 2, maybe 3 years and also during 2021, it's continuing then to increase the turnover. And it's actually today the biggest, I would say, selling subsegment that we have even if we don't officially inform about how big it is, but it's actually the biggest part that we have then. The year in brief, very short, sales per region for 2021. Approximately, what is it, 75% of our turnover, if you look at the left of the focus there, Eastern Europe. So of course, on the Continental Europe is a lot goes to, obviously, to Germany, France, Italy or what have you. And then, of course, you had the U.K. and the Nordics. But what is growing with us at the moment substantially or has been doing for 2021, it's, of course, North America, where we've been quite successful with both Machine Guarding and also with the warehouse part. Obviously, longer term, we try to grow what is called new markets, which, of course, is a lot is on the Asia Pacific side, but also in South America. And that's still on the low side. But obviously, we think that there is a potential for that kind of region at least long term. so if you look at the figures totally then, we increased both orders and the sales substantially this year, helped most by acquisition, but also by a substantial organic growth, which I'm coming back to. So total, we increased with some 50%, 55%. And due to the good volume development, we've increased the profit with a bit more. So it was actually 70%. So from a financial point of view, 2021 has been both a good year for us. The operating margin is 20.8%, which is actually exceeding our targets. We're going to come back to it. So in total, I would say that it's a good base for further development now in 2022. Obviously, earnings per shares have developed also in a very good way. And the proposed dividend that will be given to the Annual General Meeting with this proposal is to be increased with approximately 50% or EUR 0.30 is the proposal for dividend per share. I then go to the next page, which is a summary of more the yearly development, longer time period development, just to get you into the picture and that we are a growth company. We are -- in our business, we are the leading company and in what we call then the mesh panel solutions or it could also be called indoor panel protection. We are approximately 2.5x bigger than the #2 player. So I will come back to that a little bit later. We are in 45 countries. And due to the very good organic growth this year, I would say that we've had a quite an increase of the compounded average growth with some 15% since 2012. Normally, we are talking about then that the market is growing with some 4% to 6% a year. And on top of that, we normally should take market share. So I would say that the more traditional way of looking at the growth for Troax is somewhere in the range of 8% to 10%. So obviously, this means that the growth in 2021 has been a substantial one. I go to the next one called financial targets. And you see from the first one, we don't have an explicit target on the sales growth. But as I told you then normally, we should do something better than the market growth. During 2021, we had an organic growth then of below 40%. And then on top of that, we had acquisition effects of the acquisition of Natom that we did in Poland in 2020, which added another 15%. So in total, around 50% or 55% of earning are calculated. And then the next target is the profitability one, where we should be in excess of 20%, which we have achieved this year, close to 21%. The same was for the capital structure where we shouldn't be more than 2.5. We should be below 2.5x when you compare net debt to EBITDA. We are actually at 0.8 at the end of the year. So we have a rather strong balance sheet, which means we can continue with investments. We're going to if it's more on machine investment or if it's market investment or could be also possibly acquisitions. Troax target to pay as dividend approximately 50%. So this year, we will be slightly below that, but 45% is a substantial increase to the year before. And with everything going on, we think this is a good balance for the Troax company and also for the future investment. Next page, which is a little bit of a summary then for the quarter 4, so not so much the whole year, but more on quarter 4. And then you can say that we continue in a very good way on the order trends. And this started by the end of Q1 in 2021 when the pandemic effects started to decrease substantially. After that, we've had a very good development. And you could say that, generally speaking, then to explain this good development is that there's been a strong demand from customers, mainly within what we call an Automated Warehouse and Machine Guarding. We note, however, just as a small remark and that during the second and third quarter, we did get at least some substantial part of -- or maybe we should call a significant part of orders, which was one way related then to projects, which was probably delayed from the pandemic impact in 2022 or maybe even earlier. And in Q4, we haven't seen that. So obviously, these kind of effects, however, small or big it was, it has ended in Q4. So in Q4, it's more of a normal market development, whatever that means. But it's -- for this quarter 4, it meant that it was still a very good market development which means that we could have a very good order trend, which then continue the trend from the second and third quarter. We also have a good EBIT result margin for the quarter 4 compared to last year, but we are a little bit disappointed with the margin there compared with previous during year. And then this is coming down from that the gross margin was a bit on the lower side. And there are a few explanations for this. One is, of course, that due to the fact that we saw a number of these bigger automation -- automated warehouse projects that was invoiced in the fourth quarter that was taken earlier in the year when the steel price was substantially lower, then, of course, this has a negative effect on the margin. And we also had a little bit of a negative side due to the project mix and some costs, which I will come back to. But nevertheless, we think internally, let's say, we can do certainly better, and we aim to show a better figure in quarter 1 2022 without giving you any real figure in themselves, but it should definitely improve the gross margin. So if we then turn to the sales side, was good in all markets, I would say. So it's also, of course, reflecting the activity in quarter 4 and in previous quarters. Earnings per share increased compared to last year, which I should also mention then that the quarter 4 last year was, of course, influenced negatively by the pandemic effect, so we shouldn't maybe compare too much with that. Working capital is on the expected level, albeit that it is higher than before, and it is primarily because, well, firstly, we have the natural cause. That's due to the fact that the sales have increased 55%. You, of course, get a higher receivable. I wouldn't say that this is main object for our worry. But the inventory has clearly increased because we wanted it to increase. And we are quite happy to have that because there has been and will certainly continue to be some disturbances in the supply chain from our sub suppliers, meaning that they are delaying components or material that we need then for our own manufacturing, which means that the lead times from suppliers to us have increased, and it's not reliable like it was before. So we have then taken the attitude, of course, of increasing the inventory, which I think right now, it's a very healthy action. If we talk about the manufacturing units, which we now have, maybe not all over the world, but we have -- I mean, the industrial part of the world, they had a good development and good volume. So obviously, we have a good coverage of the fixed cost there. Nevertheless, the steel prices continued to increase in the fourth quarter, and we actually get a little bit tight. It's because we never see that the steel price is stabilizing, so we could also get a stabilization towards our customers. So we are then, obviously, increasing the customer price in good cooperation with the customers, I must say. But of course, since the steel prices are increasing, there is a certain delay, of course, before we have compensated on this with increases towards the market. And this time delay, you can also see has a negative influence, especially, I would say, on the quarter 4 this year or 2021. We did see stabilization towards the end of the period. So we hope it's not for constant, we hope but we have maybe some sort of stabilization and could also work in a better way than with the margins like we normally are doing. However, we are not in perhaps total in control of the steel price. It's also influenced by the demand from China by the automotive industry. And of course, lately, the energy prices have risen considerably. So there is a certain risks that there might be some continued increase in steel price. We have to wait and see. We are prepared for that. If it continues to increase, we, of course, have to go out again and talk to our customers and, unfortunately, do some furthering adjustments of prices. Otherwise, we have adjusted the prices as we write here with some delay because of -- that there is a certain delay then between when we receive the price increase and when we can get it out, so to speak, practically from the customers. Turning quickly towards some comment about the automotive, which we have commented, I think, during 1.5 years that it has not been very strong either in the fourth quarter, and we had expected it to at least be a little bit stronger. And we note that the number of the automotive companies have good investment plans but they are not doing substantial investments, so they seem to delay it to a certain extent. There are investments going on, but I wouldn't say that it's staring a very big scale. So this has to come sooner or later because with all this technological transfer to electrical cars or electrical platforms, this will obviously take place. But we obviously need to wait for a couple of more quarters in order to see this probably. We hope that this will come now in 2022, but we have to come back to this time where we have facts to show, we are not only expectations. On the other hand, the Automotive Warehouse part is continuing to give very important orders, and it's -- if anything, it's still increasing, I would say, in demand. This is, of course, very positive for Troax, and I think also we are very strong in delivering solutions for this kind of rather demanding customers. There is a negative side on the same thing that is that our dependence, of course, on these customers have increased due to the increase of volume. I think we can take care of this. It's not a main problem, but it's just something we all need to understand a little bit. The acquisition we did last 2020 in Poland, outside of Poznan, they continue to have a good development in the first quarter. And we have started now finally to move also to new facilities. And then at the end of the year, we had moved the biggest part lease of 1 of the 2 factories to the new site. The second one will have to wait a little bit because we still are trying to get some more electrical power to be connected within our building. And before we get there, we can't really move to the second one, occurring 2022 and into '23, we should be able to move that also. And as a small remark, we also started a new sales company in Australia. We think there is interesting possibilities there for a number of customers also that we already are discussing with to, of course, to increase our turnover in an interesting one.With this, I turn the page. I go to the financial highlights. I'm sure you've gone through this already. I already talked about that the gross margin for the quarter was on the lower side. And I've already explained and I think the major effects. On top of this, we have, of course, the consolidation effects of Natom, which in itself has a decent margin, and we are very happy with the result development. But when we consolidated this with the rest of Troax, it reduced the margin somewhat just because the products that they are producing and selling have a lower margin, just because that is the structure from before compared to Troax. And on top of that, we have, I said before, we have moved at least one of the factories now to new facilities in Poland, and it also created some extra costs. So nothing extraordinary, but it has, in the fourth quarter, of course, reduced and the margin also a little. So totally, the operating profit has increased compared with the last year. But as I said, when you compare with last year and with average this year, it's a little bit on the lower side. So on the total side, we already discussed the total picture. So the aim is, of course, like I said before, and step by step to come back to margins, we saw a little bit similar to what we had before. Going to the next page. I won't go through all the details. We've also done some reclassifications of some sales and to some countries, but it has no major impact, but just that the figures are slightly changed in the previous year. But if you see then, if we look at the orders, and it's a similar development on the sales side. I first look at the whole year because that gives the total impact. So the 12 months, January to December, which you see in the middle here on the page, there are substantial improvements in all regions, also in the more mature regions like the Nordic region, which has increased with 20%, which is a very good figure. And then, of course, North America, we have really excelled in very good growth, and they really come through in a good way during this year, but also in new markets, which are, of course, not smaller figures. But we've grown there organically with some 40%, which is a good figure. And then, of course, we increased with the acquisition in order to get the total figure. So I think we really formed, as I said before, a good basis for future growth. And one of the tasks for us now for 2022 is, of course, to, let's call it, grow into the much bigger [ costume ] that we have created during 2021, which is only a positive thing. But as you understand, with such a growth, there has been certain pressure in the organization and on the manufacturing side and logistics and what have you. So we have -- I think we should give the organization a big credit for what we have achieved during this year because it's been tough with the pandemic and also in the delayed and substantial increase in demand. On the sales side, it looks a little bit similar. So if you see then on the 3 months, you see a minus then for U.K., but I'm normally saying that the U.K., you shouldn't take too much attention to quarterly figures because sometimes they get bigger projects, which are also related to other regions. And in this case, some of the projects are actually then diverted to other regions. So of course, we compare with 2020, where we had more business generally transferred through United Kingdom. So obviously, that's greater than a negative figure. But from a market point of view and so forth, that's absolutely no worry from our side. We are quite happy with what we're doing in the U.K. So very well then. And so don't take this too negative, it's minus 33 for the fourth quarter. So totally, a very good development in orders in fourth quarter. I go to some sort of conclusion, and because I want to have some time, of course, for you to put some questions. So as we said now several times, very good order intake mainly coming from Automated Warehouse, also from Machine Guarding, and some of the other segments have also progressed that we write here positively. A little bit lower on the automotive side, as I said. Good development result albeit and that we are claiming and then that the margins were, in the quarter, on the low side. North American operations did very well and show improved results. More or less, all markets had a good development in orders, and the factories will continue to do well, continue some turbulence with steel prices, but maybe there's some sort of stabilization towards the end of the quarter, which is, at the moment, I would say, good for -- not only for the customers. They needed some sort of stabilization, I would say, now. It's a tough situation for many of them out there because they have price increases done from suppliers like us. And we are normally, as you know, not the biggest supplier to these kind of customers, but we also have to promise them to get their own supply of different kind of raw materials or semiconductors or whatever it is, which, of course, creates some problems for them to deliver to their customers. Integration of Natom is ongoing in a positive way. So summary, good development that result in corresponding quarter 2020. But a little bit on the low side when you compare it with quarter 2 and quarter 3. So we're going into slowly the end of this short presentation. The growth factors you've seen before, they are the same. So it's mainly the increased industrial automation, the growth in e-commerce. We are seeing some tendencies also at the onshoring, meaning you take back some manufacturing into where you are. But that this tendency is increasing. But I would say that compared with the other 2 main ones, it's not the biggest influence, but it's a positive, let's say, on the moment. On the production units, we still have, as you know, quite reasonable overcapacity since we want to keep our customers happy with good delivery turns. We have to increase them because of the volume increase, the utilization rates in more or less all of our factories. So which means then that we might look into some investment maybe earlier than expected, which is, of course, only a positive thing. The ones, which is still on the too high side, short term on the machine capacity side or machine utilization side is the Polish one where we are continuing to invest, but we are still waiting for some of the investments to come into implementation. So that capacity utilization is a bit too good, long term. Turn the page, we are the group. So we have a number of brands. We don't need to go through this too much. We've been working then for a safer tomorrow since 1955, and we intend to continue to do that. And of course, one other thing, which is becoming increasingly more important, is to work with not only on the environmental side, but also on ESG items, generally speaking. So you've seen most of this before. We continue with both improving our product from an environmental point of view. We try to reduce the impact that our factories have on the environment on the CO2. We try to push suppliers, mainly our steel suppliers, that we could use more of the reused steel or recycled steel. Since obviously, steel for us is the main impact of C02, which were not maybe directly can influence, but we can interact the influence by buying more from the suppliers, and we can also influence maybe this deal works, to a certain extent, to increase the number of reuse of steel that are -- or recycled steel that are using in their own production. We've also done some work on the ISO side in some of our units this year. So we will try to be a little more explicit over easing the -- when we do the annual information, which will come, I think, in March, next month. But we are concentrating to continue to improve both the products and our impact on the environment around us. Continue with our safety center with our R&D department and of course, also from an environmental point of view, it is quite important that has a good influence already from day 1, which means that we are starting to sketch on new or improved products. We are certified also by external companies. In this case, we have taken as an example, TÜV Rheinland, which means then that the customer not only need to trust us, which we think they should do, but nevertheless, it's always, of course, good that an external certifying body has tested that you are doing what you're saying and that what we obviously are doing. So we continue to do this kind of testing so that the customer feels safe in what they buy from us. Here, you have a photo from still the biggest unit that we have in the group. So it's the one, the southern part of Sweden. And sort of this shows and that we continue to develop and invest. And of course, some sort of summarize. We try to protect people, property and processes, where obviously, then the people are the most important thing, but process is becoming, of course, also more important as we go down the route of increasing safety awareness with our customers. And finally, we are the original since 1955. We try to act like that, also we have a lot of respect for that we're working with safety. And so we try to have a high standard. And in other words, safety should equal Troax. And with this, I'd like to end my presentation. So John, if you would then invite the other people to put questions, I'll do my best, of course, to answer them. Thank you so far.

[Operator]

[Operator Instructions] We will now take the first question. And the line is now open. Please go ahead and ask your questions.

[Unknown Analyst]

So I was just first looking at the order intake. Are these orders -- will these orders primarily be materialized in the first quarter? And also, can you say anything about how the order conversion was in this quarter?

[Thomas Widstrand, CEO, President & Director]

Yes. These orders that came in, in the fourth quarter are primarily for deliveries in quarter 1 and partly in quarter 2. We have, however, seen during 2021 that these bigger products, especially in Automated Warehouse, have a certain, let's call it, inclination of being sometimes delayed because these are big projects and there will be delay. So there might be something coming into also the second part of this year, but generally speaking, they should be according to the plans that we know of today, should be delivered in Q1 and Q2. If you then talk about it in deliveries of Q4, that were a little bit more than usual then delivered in Q4 that came from previous quarters. So that's what I meant that there were a certain delay of certain projects, I would say, which, of course, had a negative effect also on the margin side.

[Unknown Analyst]

Okay. Perfect. And then just on the gross margin of 35%, if we disregard the lag in price increases for rising input prices, what would be a more normalized gross margin in this quarter? I know that before Natom, it was around maybe 40%, 41%.

[Thomas Widstrand, CEO, President & Director]

Yes.

[Unknown Analyst]

But now after Natom, what would be a more normalized gross margin?

[Thomas Widstrand, CEO, President & Director]

Well, I think that under normal circumstances, we would say then that we will go to 39% or including Natom, at something like this, plus/minus 1% here and there, which is -- it's a good level where we should be on more longer term.

[Unknown Analyst]

Perfect. And then just the last question. You hear about car manufacturers moving their production back from Asia, back to Mexico and Europe. Is this something that you have witnessed or experiencing?

[Thomas Widstrand, CEO, President & Director]

Yes, we are seeing that. It has not -- we have not seen so much. I actually have [indiscernible] reality, but we see a number of potential customers and also some customers who are obviously planning for this. So I think this will have a positive effect. It would benefit us and also our competitors, I think, generally speaking. But I would not say that this dramatically changes the demand, but of course, it's a good thing in general that this thing happens. It increases demand for automated solutions. And if you have an automated solutions, you normally need permitted guarding.

[Operator]

[Operator Instructions] And we have questions that came through, and we will now take the next question. Line is now open. Please go ahead.

[Jon Hyltner, Fund Manager of Equities]

So this is Jon Hyltner. Can you hear me?

[Thomas Widstrand, CEO, President & Director]

Yes, I hear you. You sounded a little bit slower than normal, but I hear you.

[Jon Hyltner, Fund Manager of Equities]

Okay. Well, I don't know why. I just wonder, you mentioned that in Automated Warehouses, you see bigger orders than in the rest of your business. And just looking at the order intake in Q4, the growth rate there, is that reflecting more or less the underlying demand you have? Or is it inflated by some major projects that are not likely to be repeated in most quarters?

[Thomas Widstrand, CEO, President & Director]

Good question. We hope, of course, that some of these projects will be repeated. But [indiscernible], in a serious way, I will say that, now we think that the fourth quarter is probably reflecting relatively well the market activity even if we cannot say, of course, then that some of the bigger projects that came in, in quarter 4 that the corresponding one will come every quarter, but we think that this is fairly well reflecting an activity. I should add also, which I'm sure you're all very aware of, that on the organic growth, of course, for the first quarter, it has a certain price increase influence, which, of course, makes the figures look a little bit better than if you compare it volume-wise.

[Jon Hyltner, Fund Manager of Equities]

Can you say anything about the extra price increase you would have needed to fully offset the margin squeeze from -- on [indiscernible] prices?

[Thomas Widstrand, CEO, President & Director]

I don't want to do that, but we're working with it, but I don't want to disclose that.

[Jon Hyltner, Fund Manager of Equities]

All right. And then just a final thing on -- you said you increased your stock level, and I saw it also. I think it was up 5 million or so versus Q3.

[Thomas Widstrand, CEO, President & Director]

Yes. Yes.

[Jon Hyltner, Fund Manager of Equities]

Is it just -- is it plain steel? Or is it finished goods you have there in stock?

[Thomas Widstrand, CEO, President & Director]

I suppose. And on top of that, you also have a few projects that will be deliver now in Q1 that are more or less finished, but they're waiting for the customer, so to speak, to say yes, so we can release it.

[Jon Hyltner, Fund Manager of Equities]

But the goods you have in stock or the cost for it, that's already known, of course. But are the prices already negotiated with the customer?

[Thomas Widstrand, CEO, President & Director]

Yes, they are. Yes.

[Jon Hyltner, Fund Manager of Equities]

Okay. So there's no margin risk, so to speak, of perhaps having...

[Thomas Widstrand, CEO, President & Director]

Not for those ones. No, I can't see that.

[Operator]

And we will now take the next question.

[Kenneth Toll Johansson, Financial Analyst]

It's Kenneth here. Just a question on the balance sheet and dividend and so on, your balance sheet is very strong, and you paid a little bit less than the 50% payout. And it's a little bit more now than a year ago from when you acquired Natom. So are you looking very actively to do more acquisitions now?

[Thomas Widstrand, CEO, President & Director]

That's a very good question, Kenneth, perhaps a little bit sensitive. But I can just tell you in the way that we are looking actively into making more acquisitions. If they come up more in the near future or in the longer future, we'll have to see. But we are quite interested to do more acquisition now. And you are absolutely correct that we have a strong balance sheet. But we also see that because of the good volume development, we need to, perhaps earlier as expected, and I said, do more investments. So maybe we are a little bit on the cautious side. We have to see how this works out. But I think you will find out after Q1 then if this was a reasonable assessment or if we just maybe overcautious.

[Kenneth Toll Johansson, Financial Analyst]

Okay. And when you're talking about expanding production capacity, are you looking mainly to do that in your existing operations? Or are you looking at -- would you consider to do a greenfield in a new country or a city, for example?

[Thomas Widstrand, CEO, President & Director]

No. No, we will not do it in any new company. We will primarily extend our existing facilities.

[Operator]

And no further questions that came through, sir. You may continue.

[Thomas Widstrand, CEO, President & Director]

Okay. Thank you very well for listening in. We will talk again then in -- towards the end of April, if you have the time and are interested. We have -- I think we have the release of the quarter in 27th of April or something like that. So in the meantime, I wish you all the best, so take care, and I hope to be able to return to you then with some further growth, which is, of course, our long-term aim. I don't give you any promises, but this is what we're working for. So thank you very much. Looking forward to talk to you next time.

[Operator]

Thank you. That concludes our conference for today. Thank you all for participating. You may now disconnect. Speaker, please stand by.