Kloeckner & Co SE

XETRA:KCO

Earnings Call Transcript 2019-Q2

[Operator]

Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to today's Q2 2019 analyst and investors conference call. [Operator Instructions] I must advise you that this conference is being recorded today, Wednesday, 31st of July 2019. I would now like to hand the conference over to your first speaker today, Christina Kolbeck. Please go ahead, ma'am.

[Christina Kolbeck, Head of Investor Relations & Sustainability]

Thank you, and welcome to our Q2 investors and analyst conference call today. Here today with me is our CEO, Gisbert Rühl, who will guide us through the presentation; also I'd like to welcome Dr. Oliver Falk, our new CFO; and also on the line is John Ganem, who is responsible for the Americas operations in the Board. So after the presentation, we are, of course, happy to answer your questions. And with that, I'd like to hand over to Gisbert.

[Gisbert Rühl, Chairman of Management Board & CEO]

Yes. Thanks very much. A warm welcome also from my side. Let's directly jump into the presentation. Slide 4, as usual, the overview of -- for the second quarter. So we had a very difficult second quarter, as you know, with further decreasing volumes and prices. Shipments were down significantly by close to 8%, of course, because of the weak auto business in Europe, and we also had a very difficult business development in Germany. Machinery, the machinery for us so important. Machinery industry was increasingly impacted by the negative automotive industry. And then we had also some portfolio changes, small portfolio changes in France here. We closed a few small sites. Sales were down accordingly by 6%, not as substantial as shipments because of the strong U.S. dollar. Without these FX effects, sales would have been down by 8.8%. Significantly weaker was also the gross profit with only EUR 304 million compared to EUR 364 million in the second quarter last year. Also the gross margin this was down from 20.3% to 18.1%. Accordingly, also EBITDA was weaker. We had EUR 85 million last year. This year, we came in with EUR 82 million reported, but here was a special effect because of -- here, we had a special effect because of the sale of our branch in London. Special effect -- net special effect was EUR 31 million. So without this EUR 31 million, we came in with EUR 51 million. But here, we have to consider also a like-for-like, the IFRS impact of EUR 11 million. So like-for-like, it would be EUR 40 million compared to EUR 85 million last year. Positive or very positive, on the other side, the operating cash flow and also the free cash flow. Operating cash flow came in with EUR 140 million compared to minus EUR 12 million. Last year, we significantly decreased net working capital positively. Also, the development of our digital sales was 29% compared to 30% -- compared to 20% last year. Yes, with this, we go on with our -- with digitalization with the next slide. Here, we made progress as well with kloeckner.i as well as with XOM Materials. kloeckner.i is meanwhile -- or has meanwhile built up an increasingly successful consulting business. We had now the first follow-on project of a DAX 30 company and many more projects in the pipeline. Also, our Kloeckner Marketplace is developing positively with more than 30 merchants. Meanwhile, third-party merchants on our platform with complementary products, not with competitive products, but with complementary products. Also, XOM Materials is now clearly scaling up. We have now not 34 to -- since today, we have 35 vendors under contract. We have more than 300 registered customers and selling more than 7,200 products. We have a very good mix, meanwhile, of large producers like, for instance, Severstal and midsized service centers on the platform. The market reach of our -- of combined revenue of the vendors we have on the platform is EUR 37 billion when only 3% of this would be sold through XOM, through our Marketplace, then we would have already a GMV of more than EUR 1 billion. We have also gone live in the U.S. We increased our product offering beyond steel and metals to plastics. Next step is now the integration of further third-party platforms. For instance, for transport and credit risk insurance if a customer would, for instance, order something through XOM, he will then have the possibility to directly insure the transaction and going forward, also the possibility, for instance, to finance the transaction. In the next slide, you see how -- that at least contracts and sellers are clearly moving up exponentially. There is always a time lag between the point in time when the customers sign the contract until the customer is then live because the interface have to be -- has to be implemented. And some of these vendors also have no experience, or they don't have necessarily experience in online sales. So it takes some while until they are live, and until they then really selling through the platform. And with this, also GMV will, within the next couple of months, clearly go up exponentially. And GMV, which ended up now by EUR 10 -- or more than EUR 10 million so far, but here, we will see clearly the exponential increase through this exponential increasing sellers on the platform. So we are here very, very positive that we will see here very strong development this year and very successful development. We can clearly say that the interest is very high. So we have a lot of leads. We have more than 100 further vendors who are interested in this platform. And with this, we will no doubt about, see a positive development going forward. Let me now quickly come to financial Slide 8. Shipments and sales. Okay, this was mentioned already, more or less; also the gross margin development. So with this, we can then flip directly to the next slide. You see EBITDA growth. Here, you can see the impact -- the heavy impact of price and volume impacts of a total of EUR 70 million, which we, of course, could not be compensated despite the fact that we decreased operational expenses by EUR 22 million, especially because we -- because of lower personnel. So we reduced our personnel by 100 -- by further 120 employees since last year. When you compare this, by the way, with 2011, this is really interesting. In 2011, we had 11,500 employees and only 10% lower volume than this year. Currently, we have 8,460 employees, so 3,120 employees less. That means 27% less personnel and only 10% less volume. So we increased our productivity significantly during the last 8 years. Unfortunately, we have to put up this productivity gains mostly into the market also because of the overcapacity. Yes, with this, so when you take into account the OpEx increase and then IFRS 16, we end up with -- came in with EUR 51 million operational EBITDA. As mentioned, like-for-like, it would be EUR 40 million. And then we have this material special effects. We had a EUR 36 million gain through our property sale in London and, on the other hand, EUR 5 million restructuring costs, which that means that we had a net effect here of EUR 31 million. The next slide, cash flow development, as mentioned, very positive. We reduced our net working capital by EUR 107 million in the second quarter, ended up then with an operating cash flow of EUR 140 million. And taking into account the sale of our London site with another EUR 33 million, we came in was a free cash flow of EUR 173 million. And with this, we were able to reduce our net debt significantly from EUR 820 million by the end of the third quarter, now down to EUR 684 million by the end of the second quarter. Yes. This brings us to the outlook. First of all, in Europe, if you remember in our last quarterly call, we still expected the growth in Europe and the U.S. of more than 1%. We're now expecting more or less no growth or only very, very limited growth. In any case, less than 1% for Europe and the U.S. In Europe, construction was still positive. And here also, the outlook is positive, especially in Switzerland with this important -- which is very important for us because we are heavily impacted by the construction sector in Switzerland.Machinery, mechanical engineering, only stable or slightly decreasing. We clearly see here a falling trend in order intake. And with this sector will be an issue, especially in Europe, especially in Germany, where this sector is typically impacted with the time lag from the automotive industry, which was very weak. So we had, for the first 6 months, production went down in Germany by almost 12%. I think in Europe, it was 10%. Even globally, automotive industry went down by about 4%, and we are also not that positive here going forward. The only industry next to construction which remains strong in Europe was shipbuilding with reasonable growth. And I can say tomorrow -- this morning, I visited one of our customers in a big shipyard in the northern hemisphere of Germany, and I can clearly say that their order books are full. So we are here, for this industry, very positive also going forward. Yes. Now for the U.S., now John comes into play. John, our -- one of our 2 new members of our management Board. John, yes, please take the opportunity to also introduce yourself, and then please give us an overview about the U.S. market, mainly -- maybe also with some comments on price development since hot rolled coil is now obviously definitely increasing. John?

[John Ganem, Chief Executive Officer]

Yes, sir. Yes, hello, everyone. My name is John Ganem. I've been CEO of Kloeckner Metals Corporation since January 2018. And prior to that, I was Executive Vice President overseeing all of our purchasing operations. Relative to the U.S. and the outlook, we certainly see demand as stable. Construction is definitely well down year-over-year. In spending, I think the activity levels are solid, and we're optimistic that the expected reduction in the interest rates here in July are going to give a boost to residential construction in the second half. We see still strong activity in manufacturing, machinery, heavy machinery for sure with the exception of agriculture. Energy markets continue to be stable to moderately higher year-over-year. And then, of course, automotive in U.S. is down from a production standpoint, but this is -- this doesn't impact the Kloeckner Metals' portfolio as automotive is a relatively small component of our business mix. And then shipbuilding is up for us as well. I think the outlook in the U.S. with demand -- we feel demand is relatively stable. It's steady. The underlying demand that is -- there's no question, the first half of the year, the apparent demand in the market was greatly reduced as service centers began to pull back from their purchases and started to liquidate inventories. So that really had an effect of shrinking the apparent demand that the mills saw, but the underlying demand is still there. We expect that to hold steady in the second half of the year. Of course, we've also experienced a precipitous drop in pricing across almost all product lines that we sell, with the exception of stainless and aluminum, which have fallen but in a much more controlled and manageable way. So that kind of played itself out through the end of June, really has seen a -- saw an acceleration of price declines at the end of June. And then finally, the mills kind of drew the line in the sand and decided that prices had fallen far enough. And we saw a number of increases -- actually, 3 increases on flat rolled announced over 3-week period for a total of $120 a net ton. And then last week, we saw a move to raise the plate prices, which were lagging behind the flat rolled prices of $40 a ton. We definitely see, as Gisbert mentioned, that hot rolled price increase has taken effect and prices are now up $80 a ton since the first week of July. So that's pretty -- that's very optimistic. We hadn't seen it in our resale prices until really this past week, which is a clear indication that service centers have accepted the fact that prices are going up and that probably gives us a fair bit of optimism that, in fact, the full extent of the price increases that have been announced will be achieved. So [ I got ] Gisbert.

[Gisbert Rühl, Chairman of Management Board & CEO]

Yes. Okay, yes. Thanks very much, John. Yes, this brings us then to our last slide, the outlook for the third quarter and for the full year. For the third quarter, we expect slightly higher sales than in the second quarter. And EBITDA is expected between EUR 25 million and EUR 35 million. Here, we have the problem that despite the fact that prices are now stabilizing or even slightly increasing, we have certain, if you like, lagging windfall impacts, negative windfall impacts of EUR 20 million to EUR 25 million coming from the second quarter. Yes, for the full year, shipments and sales are expected to slightly decline year-on-year. EBITDA now expected between EUR 140 million and EUR 160 million and reported EBITDA will be including this impact, because of the sale of the London site, will be between EUR 170 million to EUR 190 million. And what we will also see is a strong -- very strong increase of our operational and our free cash flow compared to last year because we will reduce net working capital, more net working -- even more net working capital going forward. And with this, we will then also be able to reduce our net debt significantly. Before I finish some remarks concerning the most recent management changes we had, which were necessary against the background that we want to manage Klöckner going forwards much more decentralized with a much higher degree of independence of the regions and individual operations. This eliminates, finally, the need for a COO for the group with the overall responsibility for operations. Jens Wegmann will, therefore, leave Klöckner & Co today. His responsibility/abilities will be assumed on the one side by John Ganem for the U.S. or for Americas, so for the U.S. and Brazil, and by myself for Europe. This has, of course, also consequences for the -- for our holding company. A reduction in the number of employees in the holding company from around 130 a few weeks ago to around 100 was initiated already some weeks ago and is currently being implemented, but we are planning a further reduction in the core holding company. So on the Klöckner & Co SE down to around m employees and another -- and there will be another 25 employees who will work for our service company. Before I finish, I will now give Oliver Falk, our new CFO, the opportunity to introduce himself.

[Oliver Falk, Chief Financial Officer]

Good afternoon, everybody. Yes. My name is Oliver Falk, and I'm working now since more than 25 years for the Klöckner & Co group. I also stand in management positions on country level. So CFO of country organizations or of most of the country organizations. Within that time, I -- more [ involved ] 20 years, in the steel distribution industry, so I know the industry inside out. Regarding some projects which I was responsible for, want to give you some examples. So I organized financing instruments like ADS program and borrowing base facilities. Last year, I was responsible for the reorganization of the accounting for the outsourcing to a BPO service provider operating in Poland and India. Regarding IT, I managed the development of the SAP system for Europe, which is still up and running. And that example regarding digitalization, so the German country organization was the one who was responsible for the MVP of the Klöckner online shop. So I'm very much looking forward to contribute to a positive development of Klöckner, and I'm very much looking forward to collaborating with Gisbert and John. Thank you very much.

[Gisbert Rühl, Chairman of Management Board & CEO]

Yes. Thanks very much, Oliver. So with this, we are now open, the Q&A session.

[Operator]

[Operator Instructions] Your first question is coming from the line of Rochus Brauneiser from Kepler.

[Rochus Brauneiser, Head of Steel Research]

A few ones from my side. The one is on the weakness in the European business, which was apparently down like 10% in Q2 year-over-year. Can you give us a bit of a sense how much that was real demand decrease? And to what extent this has been due to stocking effects? What I was a bit surprised to see is that the kind of 10% magnitude was what we expected for the auto space. So on what ends are you, obviously, losing similar magnitudes of business? The second question is on your guidance. You are saying that for the whole year, you expect shipments to be slightly down. If I -- this is implying that not only the third quarter is doing better than usual seasonality, but also the fourth quarter is different to your usual seasonal rhythm. What is the kind of visibility on that, why things should go relatively better in the second half? And the third question is on the decentralization you just mentioned. Can you give us a bit of a sense why this U-turn is happening now? What is driving that? And what is going to happen with all the bundling effects for purchasing volumes? To what extent those are getting lost? And what shall we expect in terms of incremental restructuring costs in connection to that? That's from me.

[Gisbert Rühl, Chairman of Management Board & CEO]

Yes. Thanks very much, Rochus. Okay, we will then start with your first question. Yes, maybe I'll give you a bit more insight, confirming shipments in Europe or the group in total. So we had a very negative development in our distribution business. And not only -- yes, mainly in Germany, but also in other countries. In Europe, this distribution business was down by about 50% but, of course, also because of destocking effects. We don't know exactly how big they are because we don't have this and we can't -- because we don't have clear data here for this in Europe. But that was probably also a very significant destocking effect. Automotive was down, as mentioned, so production was down by 12%, as mentioned, the first half. We were down by about 7% in the second quarter compared to last year and -- yes, Europe. The U.S. was also slightly down, so -- but especially weak was this Germany -- this European general line distribution business. Yes. Then our guidance for the second half. Yes, okay. Visibility is, of course, limited currently. So there is more or less the best assumption we could make at this stage. Let me quickly have a look again at the numbers. So yes, slightly decline. Yes. So concerning automotive, you know that there are further diesel for these further tests in September -- or September, October. And it depends very much how this tests are working out. This will have an impact on the automotive because -- it's difficult for us to guess how big the impact will be. And concerning the, yes, machinery sector. Yes, as mentioned already, here, we have this -- our point of view, this lagging impact from the automotive industry. Also, we see here falling trends in order intake. On the other hand, construction. Construction will most probably remain good, especially in Switzerland. And yes, so the total expectation for the second -- for the group in the second half of the year is a bit more than 2.8 million tons. And for -- against 2 point -- with more than 2.9 in the first half. And yes, with this, we came up with about a bit more than 5.8 million tons for the full year. So -- and your third question, yes, why now? Yes, so what has happened in the last couple of years is that we were moving more and more into some kind of a matrix organization due to the fact that more and more operational functions would have been built up on holding level. And there is a relationship also, of course, with the fact that having a COO on holding level because okay, when you have a COO on holding level, then this COO typically also is building staff around his holding organization, further staff around this holding organization. And with this, yes, more and more functions -- operational functions ended up on holding level. And so this is something which theoretically -- where we can -- where you have theoretically bundling effects, but in practical, it's sometimes more -- much more difficult to realize this bundling effect than you think. What will remain now in the holding is, for instance, concerning purchasing, that we -- that the mill relationships in Europe were organized by the holding. Also the general agreements with the mills will be negotiated and coordinated by the holding. But purchasing itself has to be, in our point of view, really decentralized because when this is done partly centralized and partly decentralized, then you have no clear responsibility because purchasing, of course, is -- has a main impact on our business in general. And we want now make our CEOs of the country organization really responsible for the business. And with this, we have to decentralize this purchasing, for instance, operationally at least. And same is true for a few other functions. And yes, and this was then basically the decision we made and to make the company, in general, more flexible and more entrepreneurial, especially on the level of our CEOs. And we think that this is the right direction. There is one company in the U.S., Reliance, as you know, who's organized very decentralized. I think we might have a certain advantage going forward by, on the one side, decentralizing the operational business, but on the other side, we're keeping, of course, the resources for -- to digitalize Klöckner centrally. So digitalization will still be driven centrally into the organization and also IT standards will be driven centrally into the organization. But everything around the customer, the operational business around the customer, is now decentralized. And I think with this setup, we will be well off for the future.

[Operator]

Your next question is coming from the line of [ Faisal Qureshi ] from Jefferies.

[Unknown Analyst]

Could I just ask what pricing assumption is baked into your guidance for the U.S. business? Since the preannouncement, U.S. prices have moved upwards. So is there any upside risk to your Q3 guidance from U.S. contribution?

[Gisbert Rühl, Chairman of Management Board & CEO]

Thanks for the question. Yes, pricing, the assumption is that pricing remains stable for the second half. So there is, yes, some upside when -- depending now how prices are going to develop in the U.S. Maybe, John, we don't expect a sharp increase in price, right?

[John Ganem, Chief Executive Officer]

No. I think we're expecting more of a U-shaped recovery, primarily because obviously, we're heading into the second half of the year where there's the seasonal impact on volumes. And of course, we still -- we have a lot of capacity that has been added in the U.S., and I think that's going to kind of temper the upside potential, especially as we head into the fourth quarter. And I think the other thing that we have to be aware of, certainly for the Klöckner operations in the U.S., we have a high percentage of our business is contractual. And that contractual business tends to lag the market by about a quarter. So we won't see the benefits of the rising prices now in third quarter in our contract margins until sometime in the fourth quarter or even likely into 2020. So there's a bit of a lag effect, and it's hard to really calculate what the upside potential is if we don't know really how high prices could go. And we're being pretty conservative, I think, in our expectations that prices will move up and recover, but we're not going to see a dramatic rise.

[Gisbert Rühl, Chairman of Management Board & CEO]

This contractual price are linked mostly to the CRU. And therefore…

[John Ganem, Chief Executive Officer]

That's correct.

[Gisbert Rühl, Chairman of Management Board & CEO]

There's lagging effect going forward. Yes, thanks.

[Operator]

We have no further questions at this time. [Operator Instructions]

[Gisbert Rühl, Chairman of Management Board & CEO]

Matthias Pfeifenberger?

[Matthias Pfeifenberger, Research Analyst]

Couple of question. What -- can you quantify the windfalls in total so far this year? And also, what are you seeing on the volume front in terms of the current trading? Is -- has that improved a bit? Has the destocking gone away? Or is it still very, very weak?

[Gisbert Rühl, Chairman of Management Board & CEO]

Yes. Concerning windfalls, so we had -- for the first half this year, so far, we had about EUR 25 million negative windfall effects. And as mentioned, we will have some lagging windfall effects also in the third quarter, so that will be about EUR 20 million to EUR 25 million negative. So that would mean that, yes, it was probably windfall effects would end up by close to EUR 50 million, so for the full year. Yes, on the volume front, yes, volumes are currently not really strong. So demand is relatively weak currently. Okay, now it's -- in August, it's anyhow difficult to say. Most important now is what's happening in September. So when we're moving into the last month of the quarter, then we will finally have -- will have a better judgment how volumes will develop throughout the year.

[Matthias Pfeifenberger, Research Analyst]

Okay. And then maybe, can you just repeat what you said this morning about the Thyssen situation? Like you can imagine you want to be part of the consolidation in the industry, but you're not looking at a takeover of the distribution business anymore. Can you just share your thoughts on what you said this morning?

[Gisbert Rühl, Chairman of Management Board & CEO]

Yes. So the Thyssen strategy before the management change was, obviously, as we all know, to get out more or less out of the steel business. It was Tata first with its Tata joint venture. And then the second step, what in our point of view, most probably would have been the divestment of ThyssenKrupp materials. And we said -- at that point in time, we said, "Okay, whenever this is happening, we will have a look at it." We're not clearly saying that we are, in any case, interested to take over Thyssen materials, which we couldn't do anyhow because they are twice as big as we are. But we were saying, "Okay, we are interested." And when we are understanding it right, steel is now core business of ThyssenKrupp. And with this, ThyssenKrupp Materials is no more for sale. And therefore, yes, we expect -- don't expect that there will come up with an opportunity for us.

[Matthias Pfeifenberger, Research Analyst]

And what's the reverse move? Like you want to be part of the consolidation. So how could that look? And also, in light of -- I mean, the net debt has gone down successfully, but the leverage is still high. So -- and they want to keep a majority stake in the materials business. So how can this look? Is it going to be a -- I don't know, a joint venture? Or are you going to -- are you opening yourself up for a takeover? I mean what's the thought process there?

[Gisbert Rühl, Chairman of Management Board & CEO]

No. We are not opening us up for a takeover. Our thought process is here relatively easy. So whenever there is a proposal, then we would have a look at it, and then we would have to see. But we are not opening up ourselves. We think yes, despite the fact that there -- of course, that the market needs to have some consolidation going forwards, that we are well off also on our own. Okay, market situation is currently difficult, but in -- but going forward, things look at least somewhat better. And also, what -- where we are clearly -- I have to say, clearly, very positive is with our platform strategy. So this is not really seen so far. But when you really see how huge the interest is to sell through our platform and how many leads we have and that we, meanwhile, also are having vendors in countries where we're not doing any business, for instance, in Italy or also in Spain and now with Severstal, there might come up opportunities in Russia. So they -- that has -- and there is still no competing platform in the landscape. So we are very positive here. And we are also positive with the digitalization of Klöckner itself. We will here see much more significant effects going forward when we now drive this digitalization from the front end into the back end. We have now a couple of very modern front ends, but we still have a gap to our back-end systems. And when we close and get to the back-end system -- and this, by the way, one reason why I took over the responsibility for Europe because I want to manage this now directly into the organization, then we will see also significant impacts hereon for Frankfurt and France.We will now -- in the second half, this year, we will put -- we will -- all small customers then have mandatory to go on our platform because we will serve this small -- very small customers only through our online channels anymore and not more to the typical fax and phone and e-mail channels. So there will be much, much higher impact going forward. And with this, we are clearly much more positive concerning the development of Klöckner that you might think.

[Operator]

We have no further questions at this time. Actually, we have question from [ Rafael Norru from Emerald ].

[Unknown Analyst]

So 2, 3 questions on my side. First one is a clarification on the decentralization strategy. I just wanted to clarify that the negotiation with steelmakers will still be centralized, I mean, in terms of conditions, but the actual purchasing will be done…

[Gisbert Rühl, Chairman of Management Board & CEO]

That's right. That's true, exactly.

[Unknown Analyst]

Okay. Okay. How are you changing the incentives of your local managers now they -- that they have this additional responsibility?

[Gisbert Rühl, Chairman of Management Board & CEO]

Yes. We will -- also here, we will have beginning next year, significant changes. We -- currently, the bonus payments are mostly calculated through the budget -- compared to the budget. But going forward, we want to do it more on a -- really on KPIs. So for instance, the problem is always, look, when someone is paid by EBITDA compared to the budget, okay, then our CEOs can make a lot of money, or also other managers when prices are heading up. And when prices are heading down, they can make no money whatever they do. And so we want to link their payment much more to operational KPIs. And with this, we're also changing -- making significant changes also in our controlling. So the typical -- we will have a complete new budgeting process going forward. Much more lean budgeting process. Because of this price valuations, typically, we can throw our budget in the basket after 2 or 3 months anyhow. And yes, and so a couple of other changes, but it will be much more KPI-driven and much more operational KPI-driven, also their remuneration.

[Unknown Analyst]

Okay. And in terms of capital employed, it will be part of the KPIs?

[Gisbert Rühl, Chairman of Management Board & CEO]

Yes, yes. Capital employed is -- will be part of the KPI, but more in a sense that they have to increase the turn rates. So because of the net working capital is impacted, of course, very much by price development and to strip this out, we want -- the KPI is here, finally, the turn rate of the inventory. So they have to increase the turn rate.

[Unknown Analyst]

Interesting. Okay. And second question is on debt reduction. So here, you have 2 components. Do you have any idea of how much -- by how much you could reduce working capital by the end of the year? That's the first part. And are there more asset sales to come like the London one?

[Gisbert Rühl, Chairman of Management Board & CEO]

Yes. There are here and there always minor asset sales because we consolidate our setup. Also, going forward, yes, we expect a significant increase of our cash flow. So it will be clearly 3-digit positive cash flow by the end of the year. And so we have here some very ambitious targets and so that also net debt will be down significantly by the end of the year and with this, also leverage.

[Unknown Analyst]

Okay. So another additional more than EUR 100 million reduction by the end of the year, at least?

[Gisbert Rühl, Chairman of Management Board & CEO]

Yes, yes. Yes, yes, at least.

[Operator]

We don't have any further questions at this time. Please continue.

[Gisbert Rühl, Chairman of Management Board & CEO]

Yes. Thanks very much for today, for listening and for the questions. And then talk to you latest in 3 months from now or…

[Christina Kolbeck, Head of Investor Relations & Sustainability]

Or on the road or conferences.

[Gisbert Rühl, Chairman of Management Board & CEO]

Or on the road.

[Christina Kolbeck, Head of Investor Relations & Sustainability]

Yes.

[Gisbert Rühl, Chairman of Management Board & CEO]

All right. Good. Thanks very much. Bye-bye.

[Operator]

That does conclude our conference for today. Thank you for participating. You may all disconnect.