New Work SE

XETRA:NWO

Earnings Call Transcript 2019-Q1

[Thomas Vollmoeller, Chairman of Executive Board & CEO]

Welcome to another conference call. This is Thomas speaking, and next to me is Ingo. Today, we would like to share the results and our achievements for the first quarter with you: A, all major financial KPIs are performing nicely. Ingo will provide you with details about our new P&L reporting structure and a few one-time items on Q1. B, as our most important operational KPIs in terms of member development B2B E-Recruiting customers continue to grow extremely strongly, thanks to our high innovation speed and wide variety of new product updates during Q1 '19.Moving on to quick overview of our financial -- of our key financials. As CEO, I'm in the happy position to cherry pick our numbers. And as you can see, we continue to deliver very solid growth metrics, with service revenues up 18% in the first quarter and EBITDA growing to EUR 17.7 million. In addition as usual, during our first quarter, we posted an extremely strong cash conversion of EUR 28.8 million. In a nutshell, the structural tailwinds like automation and digitalization, demographics and cultural change, continue to apply and complement our strategic initiatives.From a nonfinancial perspective, one important key metric is the size of our core B2C platform www.xing.com. To some extent, a wider -- a bit more detached, this also applies to our expat operations with InterNations. As you can see, we added more than 500,000 net new members to xing.com, which is a great success given that we already serve about 16 million members into that region. This also means that we grew by 1.9 million members during the last 12 months.And as I mentioned, we also grew strongly. In fact, we were not [ taciturn ] in terms of relative growth. Our international expat member base grew by 16% to 3.4 million, with substantial effort going into our new IOS and Android apps. Let's take a brief look at paying member development.By looking at our B2C segment, we see 14.6 net new paying members at XING in German-speaking countries, plus another 3,000 net new paying members at InterNations worldwide. At this point, I would like to note that on the back of an internal BI project, we have slightly adjusted the way we report our paying members. This led to a one-time increase of about 8,300 payers in Germany, Austria and Switzerland. This is mainly due to reclassifying non-DACH members as DACH members, meaning that organic net payer growth was around 6,300 in Q1.Now we can move on to an important nonfinancial B2B KPI. Our most important B2B KPI is the number of companies that bought one of our different HR solutions and as a 12-month subscription package. On the one hand, it provides an indication of the appeal of our tools, while on the other hand, it shows us where we stand in terms of market penetration, if given that there are more than 55,000 employers for whom our different HR solutions would be beneficial in terms of Employer Branding, Active Recruiting, et cetera.By the way, this number could be even higher, close to 100,000, in fact, if you also address smaller companies. So what you can see is that we continue to add more than 3,000 net new corporate subscription customers during the last 12 months, which translates into growth of 37%. So as of the end of March, we had about 11,700 companies using our B2B subscription products, plus around another 10,000 employers who only use our XING Jobs ad solutions to post their vacancies.So there is still significant scope for growth, both in terms of the number of customers and when it comes to pricing, which is not on our agenda yet, which needs to be set.So let's have a quick look at what we did, i.e., what we shipped in our key reporting segments B2C, B2B E-Recruiting and B2B Marketing Solutions & Events. Starting with B2C. It was a very special experience, when on the 7th of March, all of the guests of the sold-out Hamburg Elbphilharmonie performed the Ode of -- to Joy at the beginning of the New Work Experience event. More than 1,800 guests indulged in the experiment and filled the Elphi with sound, a great way to kick off a day full of new thoughts, experiences and encounters.Neurologist Gerald Hüther spoke about anthropology and what work can mean within life. New Work thought leader Frédéric Laloux, presented his thoughts on the subject, while former Foreign Minister Joschka Fischer, described his career starting as a taxi driver and working his way up to Foreign Minister. The aim of the event, which is likely the largest of its kind in Europe, is to provide a forum for discussing the future of work, one of the greatest challenges of our age. This topic is of interest to our members as well as also to our corporate customers: How do we want to work in the future? How is digitalization changing our working life? How can companies be attractive to talent? How can the world of work be improved?At the New Work Experience, our members also took advantage of the new Around You feature, which we introduced in January. Around You is available in the member search in the latest version of the XING app. Once the feature is enabled, along with Bluetooth, the user will be visible to other XING members within the radius of about 15 to 20 meters.Members who have also activated the feature will be displayed and can connect on the spot or start a communication via XING messenger. Recently-received contact requests can also be confirmed directly. This feature helps establish real-life connections and strengthen our local value proposition.Furthermore, we worked intensively on our campus offering for students, the business professionals of tomorrow. We see quite encouraging member registration numbers here as well.Moving on to our E-Recruiting initiatives. Let's start with a little recap for those of you who weren't -- unable to attend the conference call on April 1 on the acquisition of Honeypot.We currently expect about 4 million ICT jobs to be filled in Europe every year. And when we look at Germany in particular, there are currently more than 80,000 unfilled ICT jobs due to a shortage of talent and lack of access to the right people.Honeypot brings IT specialists and tech companies together by turning the conventional job board principle on its head, with companies following a specific set of rules to streamline the process of applying to potential employees.This means that companies are required to supply certain details, such as a salary on offer and the programming languages required, and contacting candidates in order to ensure compliance to the quality standards put in place.Before their profile is activated, developers are subject to a brief expertise check and can enter their preferences in terms of programming languages, salaries and location, to ensure best possible matching.Honeypot is currently Europe's tech-focused job platform that brings global talent together with companies in German-speaking countries and the Netherlands. The platform currently enjoys the growth rate of around 1,000 new IT specialists every week. About 50 people work at Honeypot, which supports some 100,000 IT specialists and over 1,500 businesses.This is a perfect fit, as our E-Recruiting segment helps companies to reduce their time to hire, i.e., the time it takes to fill a position. This is also reflected in the product updates that are launched. Thanks to various improvements to our Messenger, recruiters now have many more ways to interact with potential candidates and this process is now sped up.To mention a few of the improvements, the much better -- there is a much better overview of the conversation history with candidates and messages can be flagged in a more logical way, with quick replies. Recruiters can select preformulated replies, potentially increasing the response rate. The correspondence tab has also been improved upon, so received messages can be structured in a better way.Last but not least, we introduced the labor market compass. This tool was launched in Q1 and is free to use. It provides recruiters with a full overview of the labor market in Germany, Austria and Switzerland. It's great as it analyzes nearly 1 million job ads, along with the information about more than 50 million members, with the results aggregated on an interactive map that provides lots of insight into the market as well as rankings that make the information easier to digest. For instance, top 10 list shows users which companies are the most popular employers and can be filtered by industry.Moving on to our B2B Marketing Solutions & Events segment. This segment has been quite busy as well and shipped several important services for our B2B customers. One offering really worth mentioning is our Brand Studio, which was shipped by the Marketing Solutions team. As you know, the tight labor market provides our E-Recruiting segment with ideal conditions for marketing Employer Branding Profiles. The launch of the Brand Studio enables us to take our service offering to the next level, even if the services provided by our different business units already cover the most important phases. However, we want and can diversify vertically by offering employer branding consulting and content creation, as no other player offers the depth of added value and sheer number of exclusive data points, turning this strategically valuable information.As a result, we have created an employer branding agency and accompany our clients throughout the whole employer branding process, ranging from analysis to conceptualization and content creation and on to campaigning.With the Brand Studio, we will examine the status quos of our existing our E-Recruiting clients' employer brand and identify the most relevant levers by collecting, crunching and interpreting data. Together with the client, we will investigate what it means to work for our client and devise an authentic and differentiating employer value proposition.We will develop the creative path that best conveys the client's employer value proposition, and we will create a media plan mapping out the journey of the client's potential candidates.In our Events business, we further strengthened our local presence by launching the new Xing Pulse event series in top 10 cities like Hamburg, Frankfurt, Munich and Stuttgart. Currently, most Pulse events focus on marketing and HR, with events on digital already in the pipeline. These will be held at trendy co-working spaces arranged by XING.We also ramped up our new Ambassador program, with 8 different event formats and wide-ranging topics from small XING Breakfasts to XING expert dialogues with up to 110 attendees, always focusing on high-quality events, including official XING branding along our local networking ambitions.And now, I'll hand over to Ingo, who will run you through the financials and the outlook.

[Ingo Chu, CFO & Member of Executive Board]

Thanks, Thomas. Hi, everybody, this is Ingo, and I'm going to talk to you about our Q1 numbers in a little bit more detail. If we look at the first quarter all in all, we are fully on track. So let's start with a look at the key message points: number one, we're keeping up our strong member growth and that's good because our member base is the basis for our business in B2C as well as in B2B; number two, overall revenue growth amounts to 18% year-over-year, now purely organic; number three, EBITDA came in at EUR 17.7 million, that includes several special items, which overall balance out in the bottom line impact and I'll point them out later on; and number four, we have strong operating cash flows at EUR 28.8 million.Now before we start, I would like to point out a few accounting changes that we started to establish in 2019, in this year. Basically, there are 2 changes. Number one is, we have changed our P&L structure to increase transparency even further. From now on, we are explicitly showing capitalized own work, which basically is our internal capitalized software development in the P&L. Previously, we gave that information only in our notes in the report.You can see here an example of Q1 2018 in the old version and the new version of the P&L structure, and you can see that the main point is what we have underlined here in red, the capitalized own work.There are some consequential changes, because of that structural change, mainly in personnel costs and in other operating expenses, where we used to show personnel and freelancer cost after capitalization. We now, from 2019 on, show them before capitalization. That's basically 95% of the change. We also, related to the structural change, have a very minor change in other income line from that. Now let me be clear, this is purely a structural change. The bottom line, such as EBITDA, et cetera, remains unchanged.The second change is that from January 31 on, we are fully consolidating our kununu activities in the United States. So the impact of kununu US will be found all over our P&L and not anymore in equity in our financial results. So that's the changes with regard to accounting methods this year. If we go into the numbers, you can see now our Q1 P&L in the new structure. Revenues amount to EUR 62.6 million, which is up 18% year-over-year. Due to the accounting change, we're looking at service revenues only. The growth is only organic and Honeypot is not yet included in the Q1 number as we acquired Honeypot in Q2. And with that top line development, we are in our target range.EBITDA amounts to EUR 17.7 million, that's up year-over-year and with that, we're fully on track and as usual, our Q1 EBITDA is impacted by our branding campaign that we usually do in Q1.Q1 EBITDA margin is 28%, now calculated on the basis of service revenues. Q1 also includes a few special items that I would like to point out for your easy interpretation of our numbers. One, there is an impact of our new XING headquarters.We are currently growing out of our current offices and we have secured a new high-quality headquarters at very attractive conditions. We're going to move in 2021. Now that's earlier than originally planned, but it fits our needs as we are growing. In the context of these new lease agreements, we have negotiated incentives from the current lessee of the building we're going to move into, in the amount of EUR 3.8 million, which has a positive onetime effect shown in other income.On the other hand, we have minus EUR 2.9 million in our other costs, mainly accruals for future costs related to our new headquarters. That leaves a net effect of plus EUR 0.9 million in Q1. Now that effect will be used up by further project work within 2019, so that our EBITDA outlook remains at the EUR 84 million for the full year, including Honeypot that you know.Item number -- special item number two is as compared to other years, our costs this year are more front-loaded than usual. And in Q1, we have shown about minus EUR 1 million of cost, which we normally would have shown in Q2.And number three, as mentioned already, we fully consolidate kununu US now, which means that we have a negative effect on EBITDA of approximately $0.2 million for startup losses. That's it for the special items. We look at depreciation, amounts to EUR 5.9 million, that's up year-over-year. Please note that it includes approximately EUR 1 million of depreciation from purchase price allocation.Financial result is positive, with plus EUR 1 million, up year-over-year and it includes a positive non-operating one-time effect from the first consolidation of kununu US in the amount of plus EUR 1.3 million. The rest is basically accounting only noncash cost for discounting future [ unowned ] liabilities according to IFRS.Net income amounts to EUR 8.9 million, which is up 45% year-over-year and with that, EPS comes in at EUR 1.58. If you exclude the nonoperating effect in the financial results from the first consolidation of kununu, net income amounts to EUR 7.6 million and EPS would be at EUR 1.35.Let's have a look at the segments. Let’s start with B2C. In Q1, the B2C segment contributed EUR 7.5 million in segment EBITDA, which is down year-over-year as planned. The reasons are continued investment into our B2C base as well as new B2C base businesses.Now please remember to not only look at our segments on a stand-alone basis. Our B2C segment is not only a business in itself, but it's also the basis for our B2B businesses. So any investment in the B2C segment is also an investment in our B2C -- B2B business. And the B2B businesses, generally speaking, have higher margins because they have marginal byproduct economics because they are based on our B2C assets.Now if you look at B2B E-Recruiting, this segment contributed approximately EUR 21.6 million to profitability, that's up year-over-year. Return on sales is up as well. Here you can see, as just mentioned, marginal byproduct economics.The B2B Advertising & Events segment contributed EUR 1.8 million to profitability, so up year-over-year, margin is up as well, although we are investing in that segment, too.kununu US now is fully consolidated. In Q1, the startup losses according to plan amounted to minus EUR 0.2 million. As announced earlier this year, we expect a very small single-digit million loss in that business on a full year basis for 2019.If we look at revenues, B2C revenues came in at EUR 25.4 million, that's up 5% year-over-year. This segment is developing according to plan. A little over half of the growth was contributed by XING based B2C business, the rest was contributed by InterNations.Let's look at E-Recruiting. B2B E-Recruiting revenues came in at EUR 31 million, which is up 31% year-over-year. All of our E-Recruiting revenues streams are growing double-digit, strongest drivers again are the modern forms of E-Recruiting, Active Recruiting and Employer Branding. And also, our 360 packages continue to sell well and support our growth.Finally, Advertising & Events, revenues amount to EUR 6.1 million, which is up 22% year-over-year. We also have a good development, driven by both advertising and events, which are all up double-digits. If you look at costs, on this chart, you can see an overview. As mentioned earlier, we have consequential changes here from our new P&L structure: personnel cost as well as freelancer costs in our other operating expenses costs line are now shown before capitalization. In Q1, personnel cost before capitalization amounted to EUR 30 million, that's an equivalent of EUR 44 million -- 44% of revenues. And if you deducted capitalization, personnel cost would amount to around 38% of revenues. Costs are up year-over-year and this development is fully in line with our expectations. Year-over-year, we added 252 full-time equivalent employees. Thereof, 12 from the full consolidation of kununu US.We added 240 full-time equivalent employees in the other businesses: 150 in B2C, mainly product and engineering; 32 in B2B E-Recruiting, they're mainly sales and marketing, also some product and tech; 15 in B2B Advertising & Events, they are across all functions; and 43 in the rest of the organization.If you look at marketing. Overall marketing cost amount to EUR 9.2 million, which is 14% of revenues, up year-over-year. As you know, we have big branding campaign in Q1 and again, we are very happy with the outcome of the campaign.Last cost line and other operating expenses. You all know it includes as usual external services, legal, audit, consulting, payment processing, sever hosting and other costs. In Q1, other operating expenses before capitalization amount to EUR 16.1 million or 24% of revenues. It's up year-over-year. If you deduct capitalization for freelancers, other operating expenses would amount to around 21% for revenues.As mentioned earlier, in Q1, other operating expenses were impacted by minus EUR 2.9 million of cost for our new headquarters and approximately EUR 1 million for front-loaded cost which normally occur later in the year.Lastly, let's have a look at cash flows. Operating cash flows, excluding organizer cash, amount to EUR 28.8 million. That's up year-over-year and as usual, Q1 is seasonally strong with key drivers being EBITDA and changes in net working capital.Cash-outs for operating investment amount to minus $8 million, slightly down year-over-year. No particular reason for that. Cash-out for acquisition amounts to minus EUR 2.5 million and that's for an earnout installment for Prescreen, which is developing very nicely. And then you have cash-outs for interest paid, FX and rent in the amount of minus EUR 1.3 million. These are mainly cost for our rent. With that, free cash flow excluding organizer cash amounts to EUR 17.1 million.To sum it up, overall, we've had a very good start into the year. We're keeping up our strong member growth. We have strong revenue growth. Our bottom line develops according to plan, and we are confirming our EBITDA outlook for the full year, adapted for the Honeypot acquisition of approximately EUR 84 million.That's it for the numbers and now we're happy to take your questions.

[Operator]

[Operator Instructions] We'll now take our first question from Sarah Simon from Berenberg.

[Sarah Simon, Analyst]

I've got several questions. And none of them -- and not very sort of consistent pattern. So first one was on the Brand Studio business. It sounds like it's something to do with the corporate branding, so why is it not in B2B? And Thomas, the way you described it made it sound a bit like kind of Universum Global, so can you just explain a bit more on exactly what it is? Second question was just on Honeypot. You gave us some of the financials associated with that on the last call. But how does the costs of that business kind of split down? And the third one was Google for Jobs, which I believe has now gone live. Can you talk about what you're seeing in the market and how it's affecting your classified business, and whether you're seeing any impact on the broader classifieds market in general?

[Thomas Vollmoeller, Chairman of Executive Board & CEO]

It's Thomas. Third question as first one. Google for Jobs is not live yet, they postponed twice now. They're coming out in the end of May, so no news yet. Reason, I'm not sure, but they obviously had internal delays and so I think it's now -- it's supposed to be -- it had to be after Easter. First before Easter, then after Easter, now it's the end of May. Let's wait and see. We are prepared, we are launch partner and we're looking forward. For us, we only expect positive news. On Brand Studio. Yes, in a way, it has something to do with Universum, even though, obviously, we are doing it -- we are not buying it, but we are building it. We are Germany-based, we are not international. We don't want to make losses, we want to make gains. So this is the general idea. It is a consulting business, so yes, it's transactional and not really a SaaS business or a subscription business. But why is it interesting? It's interesting because obviously, we can have better content in our advertising business. So what we want to do is, we want to make or help companies build their employer brand, make a good campaign and then leverage this campaign also through our network. And as you know, we are doing native advertising. This is obviously the best type of advertising we can have. And that's why on one hand, yes, it's employer branding, which has a lot to do with the E-Recruiting and obviously, part of the guys that are paying for it are the HR department. Sometimes it's also the marketing department because employer branding is somewhere in between marketing and HR. But the important part is that the leverage of it. It does not come by the consulting fees. The main leverage is that we can have better advertising than today because we want to have this employer branding content within our native advertising. And that's why the Marketing Solutions guys are leading this exercises, even though obviously, in close cooperation with the HR guys. I hope that helps.

[Ingo Chu, CFO & Member of Executive Board]

Honeypot brand -- Honeypot cost structure is basically -- it's similar to our cost structure, but it has different weightings. So what you will have is, you will have a higher marketing component and you will have a little bit of higher cost component relative to personnel cost, because the way the business works is that Honeypot builds a global IT community on the basis of content and on the basis of SEO and SER and make marketing. And then markets, if they are interested in finding new job markets, then to -- in time-based marketplaces, towards interested employers, where employers have to apply to the engineers.

[Sarah Simon, Analyst]

And who are your main competitors? Who are the main competitors for Honeypot?

[Thomas Vollmoeller, Chairman of Executive Board & CEO]

Well, there's the biggest one is obviously the U.S., hire.com. As you probably know, it is a deliberately a network which is for IT specialists in the U.S. In France, you have talent.io, which is a Paris-based company. They are coming from Paris and going international and Honeypot is the biggest German one. There's smaller ones, but Honeypot is by far the biggest one so far. We serve an international community, only 30% of the people of the 100,000 IT specialists on Honeypot are German. They're coming from all over the world, also Eastern Europe and wherever, but the main clients of those 1,500 businesses are in Germany, also in Switzerland. There's also -- there's, in the U.K., you have Hackajob, that's a U.K.-based company.

[Operator]

We will now take our next question from Patrick Schmidt from Warburg Research.

[Patrick Schmidt, Analyst]

Could you give us maybe an indication of how we should think about your own capitalized work going forward? So is this slowdown we saw in Q1 now sustainable or should we expect any seasonality throughout the year? And also, how should we think about D&A in this context? So you stated in your report that you extension your -- internally generated software for another 12 month. So it has an effect of about EUR 0.75 million. Is -- will this also be the case in the quarters to come? Or how should we approach the full year in this respect?

[Ingo Chu, CFO & Member of Executive Board]

Okay. When it comes to -- let's take this, the simple part. When it comes to depreciation and please always remember that we already have before Honeypot, EUR 3 million to EUR 4 million in depreciation not coming from our operating businesses, but coming from purchase price allocation, and depreciation from acquisitions and then Honeypot might add maybe EUR 1 million to EUR 2 million, depending on, we're in the process of doing the budget allocation. But based on that, you would see depreciation around 13%, 14% of revenues maybe for this year. And the other question, I'll answer as I used to answer it, when it comes to capitalization of own software, when you look at our -- in our cash flow statement and our -- at the operating CapEx, about 2/3 to 3/4 of that is own capitalized -- is own capitalized work.

[Operator]

[Operator Instructions] We will now take our next question from Nizla Naizer from Deutsche Bank.

[Fathima-Nizla Naizer]

I have a couple. The first is on the 2019 guidance for revenue. Could you just confirm that it is still the 20% organic growth for the business? And then the EUR 4.5 million or so of revenue from Honeypot on top of that? My second question is on B2B E-Recruiting growth. Would the run rate for the full year also be at that 30%, 31% type of levels, based on what you can see in the market and what is really driving that growth? Is it more the XTM product, is it the XING 360, some color around the growth and where it's coming from there would be great. And the last question is on brands and advertising. Growth was much stronger than what we had expected. So would this also be the momentum for the rest of the year? Or is this -- is Q1 seasonally a stronger quarter for brands and advertising? So just some color on that would be great.

[Thomas Vollmoeller, Chairman of Executive Board & CEO]

This is Thomas. The 20% plus-minus guidance we had is still out there. I mean, this is the kind of magnitude we are expecting, whether it's 19% or 21%. It's hard to say, but somewhere in this area is absolutely correct. And yes, the split that you see currently is what we're seeing. We're seeing at least 30% on E-Recruiting, you will see a single digit on B2C and you will probably see somewhere in this area of 20% plus, I would say, in the area of Marketing and Events. And that should up in somewhere in that area. So we feel very happy with the guidance. And obviously, Honeypot comes on top. This is EUR 5 million for the year, but you only take 3 quarters of the year. So that's, what is it, EUR 3.5 million or whatever. So this is the kind of -- that's the kind of size we're having.

[Fathima-Nizla Naizer]

Great. And if you can just comment a bit on what's driving the B2B E-Recruiting growth [indiscernible]?

[Thomas Vollmoeller, Chairman of Executive Board & CEO]

Sorry, B2B growth. Obviously, our subscription business is driving it. As you see the numbers, you have seen that we have an increase in subscription customers by 37%. So market penetration is what it really drives. So it's not pricing, it's really -- further penetrating the market, you see, we're going from 8,500 to 11,500 subscription customers. We believe there is a runway of another 4,000, 5,000 every year for the next years. Because I mean, there's something like 50,000 customers we can target. So we do not see any kind of reason why we should believe that penetration is going down. Obviously, we are increasing our sales force. So we are keeping our relative growth in this area. And we see that HR departments see us as the key player to work with when it comes to modern types of recruiting and employer branding. So the one moment which drives us is really penetration of the market. We have -- obviously, we have more 360 on one hand, then we have smaller customers on the other side, which levels out in terms of ARPU, but the key driver is penetration.

[Operator]

[Operator Instructions] We will now take a follow-up question from Sarah Simon from Berenberg.

[Sarah Simon, Analyst]

Yes, just to follow up, generally, in terms of the environment. Obviously, the economic growth has been slower in the DACH region for the last 2 quarters. Are you seeing any impact on your classifieds business? Or on any of the -- either the on the B -- well, to say the B2B business, it's obviously, been quite a significant dilution in terms of spend per customer, but I guess it's really just kind of averaging down. But any comments on economic sensitivity?

[Thomas Vollmoeller, Chairman of Executive Board & CEO]

Nope. The cold, short answer. We had at the beginning in January was a little bit weak in advertising. We said, okay, let's see whether this is having an impact. But as you see on the numbers, advertising came back. So we're still so small in advertising and obviously, Google and Facebook are still taking so much, and we are still the tiny guy. So as long as the -- even if the advertising market itself might be staggering, as long as social media advertising is growing, we continue to get our share and market share increase there. And on the jobs side, the economic downturn is totally compensated by the demographics in Germany. So all numbers that I've seen so far in hiring delay, in rising time to hire, is still on the grow -- on the rise, which is really the driving factor behind our B2B growth.

[Operator]

As there are no further questions at this time. I'd like to turn the call back to our hosts for any additional or closing remarks.

[Thomas Vollmoeller, Chairman of Executive Board & CEO]

All right. Thanks to all of you. Thanks for your time that you had in XING. And hope to hear you, see you again soon. Thank you. Bye-bye. Have a nice day.

[Ingo Chu, CFO & Member of Executive Board]

Bye.

[Operator]

Ladies and gentlemen, this concludes today's call. Thank you for your participation. You may now disconnect.