Metro Inc
TSX:MRU
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
65.53
89.73
|
| Price Target |
|
We'll email you a reminder when the closing price reaches CAD.
Choose the stock you wish to monitor with a price alert.
This alert will be permanently deleted.
Metro Inc
You don't have any saved screeners yet
Good morning. My name is Julie, and I will be your conference operator today. At this time, I would like to welcome everyone to the Metro Inc. 2019 Second Quarter Results Conference Call. [Operator Instructions]Thank you. Mr. François Thibault, Executive VP and Chief Financial Officer, you may begin your conference.
Good morning, everyone, and thank you for joining us today. Sadly, I will be handling the introduction and disclaimer today. As you all know, our colleague, Roberto Sbrugnera, passed away suddenly 2 months ago, and he is truly missed by all.Our comments will focus on the financial results for our second quarter, which ended March 16, 2019. With me today is Eric La Flèche, President and Chief Executive Officer. During the call, we will present our second quarter results and comment on its highlights. We will then be happy to take your questions.Before we begin, I'd like to remind you that we will use in today's discussions different statements that could be construed as forward-looking information. In general, any statement, which does not constitute a historical fact, may be deemed as a forward-looking statement. Expression such as expect, intend or confident that will and other similar expressions are generally indicative of forward-looking statements.The forward-looking statements are based upon certain assumptions regarding the Canadian food and pharmaceutical industry, the general economy and our annual budget as well as our 2019 action plan. These forward-looking statements do not provide any guarantees as to the future performance of the company and are subject to potential risks, known and unknown, as well as uncertainties that could cause the outcome to differ materially.A description of these risks, which could have an impact on these statements, could be found under the Risk Management section of our 2018 annual report. We believe these statements to be reasonable and pertinent at this time and represent our expectations. The company does not intend to update any forward-looking information, except as required by applicable law.I will now turn to the second quarter results. But before going through the numbers, I'd like to give more color on the $36 million network restructuring charge. As we start preparing our business plans for the next year, we decided to accelerate our network optimization plan, which consists in converting, relocating or closing a dozen stores, enabling the company to better meet customer needs and reduce operating costs.The onetime charge results from severance costs, occupancy costs and asset write-offs. We have already begun implementing this project, with 2 closures complete in the second quarter and 1 conversion to discount already announced, and work on all the remaining stores will begin in Q3 and Q4 of this fiscal year. We expect a very good return on our invested capital.Turning to our second quarter results. Total sales reached $3.7 billion versus $2.9 billion last year. That's an increase of 27.7%. And excluding $686.4 million of sales from Jean Coutu, sales were up 4%. Food same-store sales were up 4.3% and inflation of our food basket was about 2.5%. On the pharmacy side, same-store sales were up 1.1%.As for Jean Coutu, $13.6 million of synergies were booked in the quarter, and the annual run rate now stands at $50 million. Also in relation with the Jean Coutu acquisition, we completed the required divestiture of pharmacies with the sale of the last 5 pharmacies. We incurred a $1.4 million net loss as part of this process. And as we did in the first quarter, we made a specific adjustment to our earnings.Gross margins stood at 20.1% of sales in the second quarter compared to 20.2% for the same period last year. Excluding Jean Coutu, our gross margin stands at 20.3%. Operating expenses as a percentage of sales came in at 13.2% versus 13.1% last year. And when adjusting for the network restructuring charge and the net loss on the divestiture of pharmacies as well as the $1.6 million charge related to Jean Coutu acquisition in Q2 last year, the ratio of this quarter stood at 12.2% of sales versus 13% last year.The lower ratio is due in part to the inclusion of Jean Coutu, which is partly offset by higher transportation costs, mainly due to a strike at one of our major carriers in Ontario early in the quarter. This strike caused delays in servicing our stores and negatively impacted our transportation costs as we had secured alternative carriers at more expensive rates. The strike was settled and business was back to normal in mid-January, but our transportation costs have gone up in line with market increases.The second quarter also contained 8 days of the higher Ontario minimum wage versus last year. So adjusted EBITDA stood at $293.6 million, up $85.5 million or 41.1% and represented 7.9% of sales. Excluding Jean Coutu's EBITDA of $80.2 million, adjusted EBITDA was $213.4 million, a 2.5% increase versus last year's quarter. If it were not for the strike and higher transportation costs, the EBITDA growth, excluding Jean Coutu, would have exceeded the sales increase. Net earnings and net earnings per share for the quarter totaled $121.5 million and $0.47, respectively, versus $106.9 million and $0.47 per share in the second quarter last year.On a net adjusted basis, net earnings were $155.1 million compared with $108.1 million last year. That's up 43.5%. And adjusted net earnings per share were $0.60 versus $0.47 last year, an increase of 27.7%. Under the normal course issuer bid program, the company may repurchase up to 7 million of its common shares before November 22, 2019. As at April 5, we have repurchased 1.3 million shares for a total consideration of $63.6 million, representing an average share price of $48.89.Of note, we will acquire the minority interest in Groupe Première Moisson effective end of the current fiscal year, and consequently the liability for this noncontrolling interest has been reclassified in current liabilities. I will conclude by stating that our financial position remains in very good health. I am pleased with the cash generation performance, with cash from operating activities this quarter $107 million higher than in the same quarter last year.That's it for me. I will now turn it over to Eric.
Thank you, François, and good morning, everyone. Let me start by thanking François Coutu, President of Group Jean Coutu, who today announced his retirement from the company at the end of May. François spent basically all of his professional life at Group Jean Coutu and made a huge contribution to its success for many years. The timing of his retirement was determined at the time of the transaction last year to ensure a smooth transition, which has been done.François will remain a Director of Metro and will also continue to own 3 pharmacies personally. I look forward to working with him and to continue to benefit from his pharmacy and retail experience. François will be succeeded by Alain Champagne who will join us in mid-May. Alain Is an experienced pharmacy and food executive with a strong track record of financial performance, building great teams and customer focus, working at McKesson Canada where he was CEO from 2014 to 2016 and before that with Frito Lay and Procter & Gamble.Turning to our second quarter, we delivered solid results marked by strong same-store sales growth across our network. Food same-store sales were up 4.3%, driven by higher customer count, basket size and tonnage growth. Food retail inflation accelerated to 2.5% in the quarter from 1.8% in the previous quarter, with produce leading the way again. Pharmacy same-store sales grew by 1.1%, with a 3.6% increase in front of store sales and a slight decline of 0.1% in Rx, due mostly to generic price reductions. Prescription count grew by 2.2%.On the integration front, we are pleased with our progress as we achieved cost savings representing an annualized run rate of $50 million. We should expect the pace of synergies to slow down going forward as we are close to completing the work on procurement. The next area of focus is integrating retail systems and distribution facilities, and most of those benefits will be realized starting in the second half of fiscal 2020.We remain confident in delivering our target of $75 million in cost synergies at the end of 3 years. Online food sales continue to grow in Québec as we're gaining more frequency from existing customers as well as attracting new ones. We are currently piloting the service in Toronto, and we expect to launch in the GTA in a few weeks, as planned.For the first half of fiscal '19, capital expenditures totaled $129 million as we opened 1 new store, relocated another one, expanded and remodeled 11 stores and closed 5 stores for a net square footage decrease of 110,000 square feet or 0.5% of our food network. The retail CapEx plan is on track, but we are slightly behind on our Ontario warehouse CapEx plan as we're experiencing some delays with city approvals, which we hope to obtain imminently; 3 new food stores are scheduled to open before fiscal year-end.So to conclude, we're very pleased with our results for the first half of 2019, and our outlook for the rest of the year remains positive. Pharmacy integration plan is on track, our teams are working hard to maintain our strong sales momentum, and we're confident in our ability to meet our long-term profit objectives.Those are my remarks. And we'll now be happy to take your questions.
[Operator Instructions] Your first question comes from the line of Irene Nattel from RBC Capital Markets.
I'm just wondering, on the whole food price inflation, we really saw a spike up in the produce categories early in the year. Are you seeing any shifting behavior, any trade down, the kind of thing we saw a couple years ago when we had a similar spike?
Well, it's not as marked as 2 years ago with big sticker shock on certain items. Yes, there are some increases in certain categories. We're not seeing a huge shift in behavior. Our mix of promotions adjust to that, so we tend to put on the market other items that don't have as much of an increase. So net-net, the produce category continues to do really well across the network. Tonnage is up significantly. And yes, there is some inflation in produce, but we have to do effective merchandising to satisfy the customers, and the teams have done a great job.
That's really helpful. And are you seeing any shift in the rate of transactions on promotion? A couple calls ago, you mentioned you're seeing a little bit more strength in conventional versus discount. Just kind of wondering what's happening there.
I would call the trading environment as stable quarter-over-quarter. It remains highly promotional, as usual, immensely competitive, but stable, both in terms of promotional price points, pricing in general. Food square footage, as you know, is growing but moderately. So I would just sum it up as stable.
That's great. And just one final one, if I might. Really strong same-store sales obviously at PJC in front of store. Wondering how much of that might be due to sort of the shift in offering on the food private label or what else you're seeing.
No. I can't say that there's a huge shift on private label. We started introducing some Metro food private label at Jean Coutu, replacing some of their previous private labels or other, but that's not been a big shift yet. It was a good number that they posted for front end. There was a bit of help there from the December 23, 24 quarter start. So I think you should look at the same-store sales for front end for the first half, and that gets you there for the group.
Your next question comes from the line of Mark Petrie from CIBC.
Can you hear me?
Yes. We can now.
Okay. I wanted to just follow-up on a couple comments from the prepared remarks. And first with regards to the restructuring charge, can you give us a bit more detail in terms of what market or markets that might pertain to, what banners? And was it driven by sort of a typical review process or prompted by a different analysis?
No. It's a typical review process. And as François said in his opening remarks, we accelerated certain decisions that we were looking at for a few months. And normally, we do some rationalizations or optimization every year. As part of the business, we decided to accelerate and group them. Most of these events are for Ontario. There's a few in Québec. It's basically on the food side, and we're looking for better performance market by market by converting some stores to discount. So there's a few of those. Some stores will be relocated. So we have to absorb some costs in the old box. And there's a couple of store closures. So it's just a question of preparing for business plans and positioning ourselves better for the future and doing it faster and accelerating the decisions and generating good returns on our capital. So we have hurdle rates, and all investments or all decisions have to pay off. And those -- we feel those decisions are the right decisions for those stores at this time.
Okay. And of the 12, how many will be closures? I think you said 2 already have been closed.
That's right. A few more, but 2 have already been announced closed as of this quarter. So the bulk of what's remaining is a reloc and conversions.
Okay. And then just to clarify. I think, François, you mentioned with regards to the impact of the transportation disruption that EBITDA in the food business would have grown faster than sales adjusting for that. Is that right? So the impact was somewhere in the range of kind of $3.5 million to $4 million. Is that fair?
That's a very conservative amount.
Okay. Do you want to give us a better amount?
No. I don't want to give too much precision, but sales increased by 4%. Our gross margin increased by [ 8 ] dollars more than that. Obviously, the SG&A had a higher increase. And as I said, if it weren't for the strike and the related increases in transportation, our EBITDA would have grown faster than our sales increase. So it's something we obviously did not expect, and we had to deal with. We have contingency plans. We kicked them off. But we were very pleased with the way the contingency plans were put in place, but it came at the expense of -- at a higher cost, obviously, as you have to secure alternative carriers very, very quickly.
Okay. And then just last. With the launch of e-commerce in Ontario, just curious if, sort of, you're approaching that rollout with any kind of change in tactics or strategy or just sort of conceptually how you think about the Ontario market versus Québec?
Well, the model is basically the same. So we've been fine-tuning our models for almost 1.5 years now. Pleased with our progress. So we've adapted it for the Ontario market in terms of customer interface, the website, the language, the menu, all that stuff obviously. We're going to be picking from a couple of stores. The model is being tested and piloted, as I said, right now, and we're on track to launch before the summer. And we're confident that we have a differentiated model that will resonate well with customers in the GTA as it does here. Clearly, there is more e-com food offer in the Toronto market than there is -- on the delivery side than there is here in Québec. So there is more competition, and we're confident in our ability to compete. So we'll just have to wait and see.
Your next question comes from the line of Michael Van Aelst from TD Securities.
You captured most of my questions, but let me just -- just on the transportation costs beyond the strike, when do you see this leveling off the expense growth in that area over the next -- whether over the next few quarters, over the next few years?
We saw transportation start to spike in the second half of last year, mostly towards the end of our fiscal '18 year. We experienced increases in freight rates all through the fall. So I think we're in for a few more months. And will it then stabilize? Will it continue to grow? We don't have a crystal ball. Clearly, there's pressure on the industry and not just the food industry, but trucking and freight costs are up for all sorts of reasons and just affects -- it affects everybody. So yes, there are increases related to that, that we expect for the rest of this year, and hopefully it will stabilize after that.
Okay. And then on the next phase of the synergies at Jean Coutu, what has to be done to prepare the Varennes facility to bring in all of the Brunet volumes?
So the Varennes facility is partially automated. And in order to be able to supply the Brunet network, we have to add some capacity to the automation functions. So we're dealing with an outside supplier, and these people are busy. And so there's a schedule. There's is some delay before we get all the equipment and the systems added to the existing systems. So there's time required for that. So that's a big one. And then we have to plan the ordering systems and make sure that whatever store systems can get into the warehouse systems, so that's being done starting June. We're going to migrate all the Brunet POS and lab systems to the Coutu platform. A lot of work for the next year or so to do the rounds. So there's a big year ahead of store -- systems conversions at store level and then adapting capacity at the warehouse to get the volumes. So we'll be doing that over the next year gradually in phases. We have a good plan. Teams have done a good job, but it's going to require more time. And that's why I said the synergy number will level off, and then we'll capture the last bucket towards the end, as planned.
And then just finally on inflation. I know you don't have a crystal ball, but others have said they kind of expect 1% to 2% inflation this year. It's running higher than that. Do you expect a meaningful slowdown as we get into the summer produce markets? Or is just 1% to 2% looking too conservative for this year?
Again, you said it well. We don't have a crystal ball. Normally, we'd expect produce inflation to level off as we start to buying more locally, but we're not there yet, especially with this long winter. Yes, that should moderate on the produce side. The 2% number that we think is a normal level of inflation is something we think is probably out there for the remainder of this year, but we don't have a crystal ball. There are signs of wheat inflation down the road. There's something happening in China with pork situation and a fever that's putting pressure on pork prices soon. Will that have a domino effect on other proteins? Hard to say, but commodities, markets, stuff moves, and it'll be around the 2% normal rate.
Your next question comes from the line of Vishal Shreedhar from National Bank.
Rx same-store sales growth, a little bit lighter than expected, even relative to recent trend. Just wondering if there was anything special there in the quarter. And should we still expect the Rx same-store sales number to normalize in the coming quarters as you annualize the big Jean Coutu pharms?
Yes. The Rx same-store sales were a bit softer. Most of that is due to deflation of generic prices. So that will be cycling or lapping, just did in April 1. So that should help on the comp number. So in addition to deflation, the cold and flu season in Q2 this year was not very strong compared to the same time last year. And I hate to use weather, but February was pretty extreme weather. We felt a bit of traffic counts drop in February. So that affected maybe Rx a little bit too. So it was a little softer there, yes, but we do expect that to improve going forward.
Okay. So we can expect Rx same-store sales growth to normalize more to Rx count growth kind of levels going forward. Is that a reasonable proxy?
That's a reasonable proxy, yes.
Okay. On a real same-store sales growth basis for the grocery business, so that's same-store sales growth less the inflation, results seem to be accelerating versus recent quarters. Wondering if that's related to Metro's performance accelerating versus the market? Or if there's other mix considerations in that metric that I should reflect on when looking at that simple high-level metric?
So as I said at the start, we're very pleased with our strong same-store sales performance. If you look at market share numbers to measure our relative performance, the indications are that we're gaining slightly in market shares. We're pleased with that. So it's effective merchandising, good store execution. We'll try to maintain that momentum. So the same-store sales number at 4.3% is strong. I said for the Rx, the December 23, that was a big day. December 23, and 24 is less of a big day, but the December 23rd was in Q2 this year. So it did help it a bit. But again, if you look at the whole year, Q1 plus Q2, our same-store sales is very strong, quite happy with that, and we're showing some slight share gains.
Okay. Is that number that we used, that real same-store sales growth number -- is that a proxy or a metric that management uses internally? Or...
We measure our tonnage. It's one way to look at it. We use it, but more precise is we know what we ship from our warehouses, we know what we ship from our stores, number of items. So yes, we track tonnage slightly differently, but we are showing tonnage growth.
Your next question comes from the line of Peter Sklar from BMO Capital Markets.
François, in your formal remarks, I just want to make sure I got a number correctly. You provided an EBITDA number for the grocery business kind of ex John Coutu. Was that $213.4 million?
Yes.
And you said that was up. I didn't catch the percentage.
It was up 2.5%.
Okay. Okay.
That's what I -- go ahead. Sorry, go ahead?
Okay. And then just lastly on the normal course issuer bid, I noticed on the current program you bought 1.3 million of 7 million shares. And I'm just wondering, like your share price is considerably higher than where it has been. Does that come into your thinking at all? Or is it just more you set a straight program and formula to buy back your shares or do you think about where your stock price is?
We could have said that every year. Under the NCIB, we've always bought shares at the highest historical price. So I think it's more of a capital allocation decision. Say, look, here's our cash from ops. Here's the CapEx that we believe will give us good returns and will help our network. We've increased our dividend by a healthy amount. And so the rest of excess cash, we believe, is the best way to return it to shareholders, is through buybacks. So share price -- tactically the share price we consider, but we don't chase the stock. If it appreciates we -- so we won't chase it. If it appreciates, we will step in when we see some weakness. But as I said, you can't be -- if you want to do your program, you can't be too cute with timing because there's only so much you can do every day or -- and take into account the blackout piece as well. So we do consider it on a tactical basis, but it's more of a decision to allocate it as per our capital allocation plan of the year.
[Operator Instructions] Your next question comes from the line of Keith Howlett from Desjardins Securities.
Yes. I was wondering if you could speak on the plans for Adonis, I guess, particularly in Ontario, and whether they will occupy any of the 12 stores that are being repositioned this year.
So Adonis is, as I said before -- thank you for the question -- doing well in Ontario, very pleased with their performance. We will be opening a third Adonis in the GTA in the next few weeks. It will be a second store in Mississauga, on Dundas, so pleased with that. In Québec, there is a relocation of an Adonis store that will also happen in the next few weeks. So growing plan -- growth plans for Adonis, we see more potential for the banner. So as far as the planned discharge, there is no link for those restructuring charges, but I won't say more for now, but, yes, we have plans to open more Adonis stores.
And then I'm wondering if you could speak about the meal kit business. I know it's a small part of your business, but whether you're seeing any traction with selling the kits inside the store? And also whether you're assisting that company to give trial offers or discounts or whether they are sort of self-financing on their own?
So the meal kit business is a startup, and it's a new venture, so they are in growth mode. Subscription model is growing. Cost of acquisition of customers is clearly a significant part of that business. So it's -- let's just say, it's not an easy business. At store level, we have done some pilots. We're testing more. We have some adjustments to make. So test and learn, very, very small business, not material to the Metro picture. So a good product. It's a good system, but we have more work to do.
And maybe I'll ask just more generally on home meal replacement, what your plans are there?
Well, the HMR clearly is a big focus of our teams, especially on the Metro banner in both provinces. I think we have a good offer. And we're always looking for ways to improve. We have chefs in store that prepare meals in store. Stick to the basics. We try to focus on good quality at great value. So it's a growing part of our business, and we're seeing more growth going forward as does the whole industry. And I think we're pretty well positioned. We have good programs, and those sales are growing quite nicely, thank you, contributing to our Metro same-store sales for sure. So a huge focus and will continue to be for the foreseeable future for sure.
You next question comes from the line of Jim Durran from Barclays.
I just want to go back to the inflation. So CPI was [ up ] today and looks like grocery store is at 4% inflation. So it continues to move up quite strongly. As far as the stock price performance, it's obviously been extremely strong on the reinflation trade. Should we start to feel a little bit cautious about the lead lag timing of cost pressure and sort of how to view margin progression as a result?
Well, not going to tell you how to do your job. We try to do our job, and we have to manage consumer expectations, consumer prices and at the same time as our margin. So as we experience cost pressure, we try our best to protect our margins. Sometimes we can. Sometimes we can't. So it always depends on the speed and the spike level. So, so far it's been pretty manageable, although, as I said earlier, there's been some significant inflation in some produce categories. We've been able to mix around that and provide a good offer to customers. If you look into meat, sometimes it can spike more quickly, and then certain categories can suffer more. So again we will have to use creative merchandising to provide good value and protect our margins. So I think we have experienced teams that can do that. I'm not going to give you any guidance on what it is and what the impact is going to be on our margin. We think we are in a good position to continue to deliver the kinds of numbers we [Technical Difficulty].
Understood on that front. So just for some granularity on the timing of switch from import to domestic. Like at what point in time in the summer do you expect to get meaningful sourcing at store level that's not going to abate the import pressure?
It's late May, June is when it really starts, and it accelerates throughout the summer [Technical Difficulty] by certain categories start earlier. So I'm not going to give you a more granular information. But as I said, produce inflation, we expect to moderate over the next few months, and we'll just have to see.
And going back to your earlier comments, it sounds like from a pricing environment standpoint like there's obviously been general support of passing through, and the promotion environment while challenged, as it often is, hasn't gotten worse, right, so it's kind of at least, as you referred to, stable?
Yes. Correct.
Okay. Great. Last thing just on e-commerce. So I mean, you've been handling the current prototype of e-commerce both click-and-collect and home delivery in Québec for quite a while now. Are you getting anywhere close to a level of development where you're feeling any stress at the stores that you're using to support that program? And is the size of that business have got further scale reaching a point where you consider moving it out of the store into some type of facility to support that?
So I think you wrote a report recently, Jim, that we've been added for 2.5 years. It's less than that. Getting close to 2 years, but we're not quite there yet. So the stress on the stores is manageable. So far, we can manage. Yes, there's growth, but the store setup allows for that and the windows we have for picking and delivering allow for that. [ We have ] 11 stores in Québec, soon a couple in Toronto. So for now, we're satisfied that the model works. And if sales continue to grow, we're not there yet, at the level where we can't service our customers with our current model, but as I said before, eventually if sales justify it with the distribution model, but we're not there yet.
And so at the current pace of development like would we have seen any impact on a consolidated basis with respect to your margin performance as a result of e-commerce growth?
No. I don't think you would've seen it at the margin level. It's contributing to the Metro performance in Québec. So yes, the same-store sales are aided a bit by our e-com sales. You would not have seen it at the consolidated level on the margin, no.
And last question on e-commerce. Just in terms of shipping and handling, your ability to cover those costs out of consumers contributing to that cost, like, how are you feeling about the receptivity of consumers to pay for that added convenience of home delivery?
Well, we feel okay about that. We're charging a fee for picking and delivery. And consumers, I think, understand that justified for the convenience that we provide. Model calls for the retail pricing same as shop in store. So if we're going to pick and deliver, people understand the cost of that, and we're not seeing resistance on the fees at all.
So I assume you've done some testing on price elasticity of that [Technical Difficulty]. Is the consumer sensitive at all to that fee? Or, you find that they're pretty open to accepting simple price?
For competitive reasons, Jim, I will reserve my comments, but [Technical Difficulty] at the risk of repeating myself, we think we have a good model. It's differentiated and it's resonating so far so good with consumers. And [ look ] forward a good launch in Toronto. So I'm not going to comment on the elasticity of our fee, sorry.
I look forward to being able to use the home delivery in Toronto.
Your next question comes from the line of Keith Howlett from Desjardins Securities.
I just wanted to ask on the freight costs, do they show up -- due to the strike or using alternative carriers, does that show up in the cost of sales or in the operating expense?
In both.
In both?
Yes.
And just on the category operating expense others -- the other category, I know -- I think I've asked this before. But would you just mind summarizing what's the main components of others are?
Well, you got to be careful because this includes Coutu and last year it did not. So you've got to be careful with the increase, but it's a whole range of publicity and marketing, transportation. It's a whole range of expenses that we bunch up into one category because it's too small individually.
There are no further questions at this time. I will turn the call back over to the presenters.
Yes. So thank you, everyone, for joining us. And we will be speaking again soon to discuss our results -- third quarter results on August 14. Thank you.
This concludes today's conference call. You may now disconnect.