Zalando SE

XETRA:ZAL

Earnings Call Transcript 2020-Q4

[Operator]

Dear ladies and gentlemen, welcome to the conference call of Zalando SE regarding the publication of the full year results 2020. At our customers' request, this conference will be recorded. [Operator Instructions] May I now hand you over to Patrick Kofler, who will lead you through this conference. Please go ahead.

[Patrick Kofler, Teamlead Investor Relations]

Good morning, ladies and gentlemen, and welcome to our full year 2020 earnings call to kick off a packed day with our Capital Markets Day following immediately afterwards. Today, I'm here with our CFO, David Schröder, who will give you a quick wrap-up on our achievements of 2020, walk you through the financials and discuss with you the outlook for 2021. So -- also, let me quickly remind you of our upcoming Capital Markets Day, starting at 11:00 a.m. CET today. Therefore, we kindly ask you to focus your question afterwards only on full year 2020 and the guidance 2021.We also will rather keep that call short, so roughly 30 to 35 minutes. As always, this call is being recorded and webcasted live on our Investor Relations website and a replay of the call will be available later today. David, I will now hand over to you. Please go ahead.

[David Schröder, CFO & Member of Management Board]

Thank you, Patrick, and a warm welcome to all of you. Thank you for joining our call today. Before we start, let me first take this opportunity to thank all of our teams for their great passion and dedication that they've put into their work over the last year, while their personal lives turned upside down as a result of COVID-19. This has made us even stronger as a team and it allowed us to further accelerate on our journey towards being the starting point for fashion at a time of significant disruption for the fashion industry overall.Looking back at 2020, we are particularly pleased to report that we were able to combine significant progress on our strategic agenda with outstanding financial results. Our platform business model has demonstrated both its resilience as well as its growth potential in 2020, a year characterized by high business uncertainty and industry-wide challenges around customer demand and fashion supply.Let me call out some of the key highlights for you now. First, we made further progress towards our starting point vision by growing our active customer base to almost 39 million customers, fueled by strong new customer acquisition that came in plus 33% year-over-year in the full year 2020.Second, we accelerated our progress towards becoming a true platform business. Partner Program and Connected Retail nearly doubled their contribution year-over-year contributing around EUR 2 billion to our overall GMV and reaching 24% share of fashion store GMV in Q4 2020.Our Connected Retail program scaled at an unprecedented speed, and we were able to establish Connected Retail as an actionable solution for stores to go digital and to recover some of the lost sales due to the decreasing footfall in general and lockdown restrictions, in particular. The strong Partner Program performance has also been enabled by the significant progress we saw in our logistics service, ZFS, which shipped 51% of all partner items in Q4. For our Marketing Service, ZMS, 2020 proved to be a rather difficult year overall due to marketing budget cuts across the fashion industry as an initial response to the crisis. However, we were very happy to see a strong year-end performance of ZMS, growing more than 50% year-over-year in Q4.Third, we were able to fully capitalize on the continued strong online fashion demand momentum, resulting in an exceptionally strong and profitable growth in full year 2020. We saw our GMV grow by more than 30% during 2020, resulting in revenue growth of 23% and an adjusted EBIT of around EUR 420 million, representing a 5.3% margin. I would like to highlight that we were even able to deliver above our initial pre-COVID 2020 guidance on all 3 metrics and outgrew the online fashion segment in Europe by a factor of 2.5%. As a result, we overachieved our EUR 10 billion GMV target for 2020, which we had set back in 2017 by EUR 700 million. Last but not least, in 2020, we were able to further strengthen our balance sheet, successfully raising EUR 1 billion in additional capital through the placement of 2 tranches of convertible bonds. Going forward, this will allow us to further accelerate our strategy and to invest through cycle with even more conviction. Let me now dive deeper into our strategic progress. Back at our Capital Markets Day in 2019, we communicated 3 strategic priorities to you. Our first priority is to deepen customer relationships and to play an indispensable role in customers' lives. Our second priority is to grow our active customer base and to be relevant to a broad audience across Europe. And our third priority is to drive the platform transition and to be the digital strategy for fashion brands.Let me now provide you with more details on the progress with regards to these priorities. Starting with our strategic priorities to grow our active customer base and to further deepen our customer relationships, we see great progress when looking at our key customer metrics. During 2020, we were able to grow our active customer base to almost EUR 39 million, supported by strong new customer growth throughout the year. We also saw a continued decrease in new customer churns. Overall, visits increased to 5.4 billion in 2020. Despite the strong new customer inflow, average customer order frequency slightly increased to a new all-time high of 4.8 orders per active customer over the past 12 months. When just looking at existing customers, order frequency increased to almost 6 orders per year over the last 12 months.Average basket size showed a year-over-year increase of 1.9%, mainly driven by a lower return rate as driven by a change in category mix. As a result of the increasing order frequency and the increase in basket size, GMV per active customer continued to grow by more than 4.3% over the last 12 months.When looking at customer development in the longer-term context, we see consistently positive long-term trend in the evolution of our customer cohorts. These developments are well reflected in this cohort chart, which may all look quite familiar to you, as we shared it with you a few times before already. It shows the total GMV per cohort and order year. The light gray bar at the bottom shows the GMV from cohorts we have acquired before 2014. Take it on top of that, you see the cohorts we acquired in years thereafter. During 2020, we were able to acquire a large and healthy new cohort to our Zalando platform. Over the past year, we saw more than 10 million customers shopping at Zalando for the very first time, resulting in a 2020 cohort, which delivered roughly 45% more GMV in the first year than the cohort acquired in 2019.When looking at the quality of this new customer cohort in more detail, we see that it shows very similar or even slightly better characteristics compared to previously acquired cohorts as indicated by their engagements, their reorder behavior and their pend with us. Furthermore, 2020 continued the positive trend we've seen regarding first year churn. Once we are in the third year of a given cohort, its absolute GMV contribution starts to grow again over time. It might be interesting to note that in 2020, we would have been able to grow Zalando at a double-digit pace, even if we had not acquired a single new customer.Let's now turn to our third strategic priority, driving the platform transition. This is a journey that we've been on for several years now. And over the past 12 months, we were able to accelerate significantly. More than ever, our platform strategy is aligned with the increasing preference of consumers for digital channels as the resulting need of our fashion industry partners to go digital, which will last well beyond the current health crisis.The accelerated demand shift from off-line to online has created a high level of urgency for many fashion players, especially those who are operating predominantly offline to further accelerate their own digital strategy. As a result, we were able to scale our partner facing services at an exceptionally strong pace. The Partner Program, including Connected Retail, which aim to connect partners and their inventory with European fashion consumers, has grown by more than 100% in 2020, resulting in a partner share of more than 24% in Q4, up 9 percentage points year-over-year.A particular highlight of the past year was the superfast scaling of our Connected Retail program, where we deliberately waived commissions to support the stores and allow them to recoup lost off-line revenues and to create a future-proof digital strategy. Connected Retail contributed around 12% of the German fashion store GMV at the end of 2020 with almost 2,500 active stores.Zalando Fulfillment Solutions, which allows our partners to leverage our European logistics network to increase their customer reach and satisfaction, while at the same time reducing complexity and cost, has grown even faster than our core offering over the course of the last year. Partner items shipped through ZFS grew by 164% and ZFS reached 51% share of all partner program items shipped, up 11 percentage points year-over-year.Zalando Marketing Services, our offering for brands to build their brand and increase visibility for their products, face a difficult first half of 2020 as a result of industry-wide budget cuts as an early response to the crisis. However, it rebounded nicely during the second half of the year. As per the end of 2020, ZMS revenues account for roughly 1.5% of our fashion store GMV, and we are now back on track to reach our long-term ambition of 3% to 4% of GMV. This concludes our wrap-up on the strategic progress we've made over the course of the year. Let's now turn to our financials, starting with top line performance. Group top line growth was exceptionally strong, with GMV growing by 30.4% to EUR 10.7 billion in 2020, resulting in the highest year-over-year increase since 2015, driven by a healthy demand across all markets as a result of an accelerated channel shift from off-line to online and fueled by the attractiveness of our platform business for brands and brick-and-mortar stores. I would like to highlight that we were able to not only deliver but to also exceed our 2020 GMV target set in 2017 by EUR 700 million. Partner Program showed a very strong performance throughout 2020 with Partner Program GMV more than doubling compared to the prior year, reaching a share of 24% of fashion store GMV in Q4. This also explains, to a large degree, the gap of around 7 percentage points between GMV and revenue growth of 23.1%. Looking at the segments in more detail. We see that our core sales channel fashion store delivered more than 25% GMV growth in 2020 across both regions. DACH recorded a very strong 25.4% GMV growth. The growth was particularly strong in our most mature and home market Germany with more than 27% growth, fueled by strong customer growth as well as a strong platform contribution with 34% partner program share, already getting close to our 40% Partner Program share target for 2023, 2024. Rest of Europe continues to outperform DACH with 32.9% GMV growth. The growth has been particularly strong in our Southern European markets, supported by the ongoing strong new customer acquisition in these markets.Our Offprice segment recorded 47.3% GMV growth in 2020. It has been a particularly successful year for Zalando Lounge, which crossed EUR 1 billion in GMV for the full year 2020. This development was driven mainly by Southern and Eastern European markets. In our other segments, we saw revenues decrease by minus 22.3% in 2020. This is in line with previous quarters as our private label activities have been significantly downsized in Q1 2019 and are no longer reported in the other segment but are now part of the fashion store. A like-for-like comparison would have resulted in a revenue of EUR 196 million in 2020 and a growth of the other business segments of around 5.5% in 2020 versus 2019 pro forma revenues. When purely looking at the Q4 performance, we saw the other segment grow by 21%, with strong performance in ZMS, growing 50% year-over-year, partially offset by our personal style advice service salon, which suffered from lower interest in occasion-based shopping from consumers and the introduction of a styling fee. Looking closer at Q4, in particular, we had an outstanding strong finish to the year with the strongest quarter in terms of year-over-year growth since Q3 2015, growing plus 38% year-over-year and reaching EUR 3.5 billion in GMV in Q4 alone.Let's now take a look at our profitability. In addition to a very strong growth momentum, we were able to achieve an exceptionally strong profitability in 2020. We ended the year with EUR 421 million adjusted EBIT at the top of our adjusted EBIT guidance of EUR 375 million to EUR 425 million.When looking at the regional profit distribution, we delivered strong profitability across DACH and Rest of Europe, both being able to increase their absolute and relative profitability year-over-year. Especially, the improvement in profitability in Rest of Europe is noteworthy, as we were able to increase profitability significantly, while at the same time, making deliberate and over-proportional investments into customer acquisition to drive growth and market share gains. OffPrice and other businesses also increased their profitability, both in absolute and relative terms. Let me now give you a bit more detail on the main effects that led to the positive development of profitability, both in absolute and in relative terms this year. For 2020, overall, gross margin remained flat to last year's level. Improvements in the form of better buying conditions and less price investments, thanks to very strong customer demand were offset by product and country mix effects. In Q4, we saw a strong 1 percentage point increase in gross profit as a result of a strong full price demand. Our fulfillment cost ratio improved year-over-year, as a result of a higher level of utilization, driving efficiency across our logistics network and improved order economics benefiting from a lower return rate. The Q4 development was in line with full year development. Q4 results clearly demonstrate that our fulfillment network is both scalable and cost efficient once fully utilized. In 2020, our marketing cost ratio increased year-over-year, as we stepped up our game in customer acquisition and engagement investments supported by our ROI-based marketing approach. In Q4, we accelerated our marketing investments to capture the full demand opportunity resulting from the ongoing demand shift from off-line to online, especially during Cyber Week. Last, but not least, admin costs continued the positive trend observed throughout the year, as a result of increasing economies of scale, continuous process improvements and slower-than-usual hiring. As a result of these cost line developments, our adjusted EBIT margin increased by 1.8 percentage points year-over-year to 5.3% in 2020. Excluding the temporary positive impact from the lower return rate, the pro forma 2020 margin would have been 3.8% in 2020. Before we move on, let me briefly use this opportunity to comment on the development of our net income as well. Net income and earnings per share more than doubled year-over-year, equally driven by a notably higher EBIT and lower effective tax rate, which came further down to 29% in 2020. To conclude our section on 2020 financials, let us now also take a look at the development of our cash flow. Net working capital continued to be negative, but increased year-over-year. The main driver behind this development was the relatively higher increase in receivables and inventories than in payables, reflecting the stronger demand and growth in our business. With regards to CapEx, we spent EUR 250 million last year, well in line with our guidance range of EUR 230 million to EUR 280 million. Overall, our free cash flow in 2020 increased by EUR 243 million from EUR 42 million to EUR 285 million in 2020. As a result, our cash balance at the end of Q4 amounted to EUR 2.6 billion, roughly EUR 1.7 billion above last year's level. Currently, our cash balance includes EUR 375 million drawn down from our revolving credit facility last spring, which we intend to return by the end of March. Before we focus on 2021, let me quickly look back on the last 2 years of our platform transition phase and how we performed compared to the midterm guidance issued at our Capital Markets Day 2019. Back then, we guided for top line growth of 20% to 25% GMV and 15% to 20% revenue growth, growing 2x to 3x faster than the European online fashion segment. In each year since this communication, we delivered at the top end of our guidance range or even above. For profitability, we guided for a flat margin development in the range of 2% to 4% in terms of adjusted EBIT to provide us with the flexibility to invest in our growth and to successfully manage our platform transition. Again, over the past 2 years, we delivered on this at the upper end of the range, even when adjusting for the temporary return rate benefit in 2020. On cash, we expected a negative cash flow during the transition period as a result of continued investments in logistics and technology to enable our long-term growth. In both 2019 and 2020, we were actually able to be clearly free cash flow positive, thanks to strong profitability levels, but also due to postponed investment plans in 2020, as an initial reaction to the COVID-19 pandemic.Overall, we are very happy with this extraordinarily strong performance across all key financial dimensions, both pre and post COVID. 2020 has clearly confirmed the immense opportunity that remains for Zalando. We observed an accelerated consumer shift from off-line to online in changing customer behavior and brands, turning to digital channels by leveraging our platform capabilities to access the European digital consumer. In this new reality, the advantages of our platform business model has become even more evident. For 2021, we thus expect these same strong consumer demand and platform dynamics to remain in place. To capture the opportunity that this presents to us, we aim to continue to grow at an accelerated pace, while focusing on and investing into our strategic priorities to become the starting point for fashion in Europe. For growth, we expect to grow GMV by 27% to 32% and to add more than EUR 3 billion additional GMV in 2021 alone, driven by continued strong customer acquisition and the deepening of existing customer relationships. This growth is not going to be evenly distributed across quarters. We've seen an extraordinarily strong start to the year, heavily impacted by continued lockdowns across Europe, a strong end-of-season sale and a very promising start to the spring/summer season. As a result, we expect Q1 to deliver GMV growth of around 50% year-over-year, significantly above our full year guidance.For Q1, this implies a strong 2-year CAGR of 32%, similar to Q4, yet at an extraordinary year-over-year growth against low comparables in Q1 2020, where GMV growth was only at 15.9%. Given the remaining uncertainty around the further evolution of the pandemic, the remaining quarters of the year are harder to predict. In general, we do, however, anticipate a continued tailwind due to the ongoing COVID-19 pandemic in Q2, while we assume a gradual return to the new normal in the second half of the year as a result of accelerating vaccination efforts.As communicated previously, we expect revenue growth to trail GMV growth as a consequence of our ongoing platform transition and increasing partner program share, resulting in revenue growth of 24% to 29%. However, we anticipate the gap between GMV and revenue to be smaller than in 2020 as we will deliberately also leverage our wholesale buying model in order to provide sufficient supply to capture the demand opportunity and as we expect an even stronger adoption of our partner-facing platform services, ZFS and ZMS, which contribute revenue but no GMV.For profitability, we expect an adjusted EBIT of EUR 350 million to EUR 425 million, which at the midpoint represents a 29% increase in absolute profit when compared to the previous year after normalizing for the temporary return rate benefit. This increase is mainly driven by our increase in overall scale as well as the increase in profit contribution from high-margin platform businesses. At the same time, we continue to invest significant demands into customer acquisition, customer experience improvements and the platform transition, effectively laying the foundation for strong growth and market share gains in the future.These investments are partly offset by ongoing benefits from lower return rates in 2021, leading to a significantly elevated profitability in Q1, even when compared to a pre-COVID year like 2019. Our broader-than-usual adjusted EBIT range for the full year thus reflects both the full range of growth scenarios as well as the uncertain future evolution of the return rate.For cash flow, we continue to expect a negative net working capital and CapEx of EUR 350 million to EUR 400 million to fund our investments into logistics and technology, which are the key enablers of platform growth. As a percentage of revenue, CapEx will be higher compared to 2020, reflecting the growth acceleration and allowing us to catch up with major investment programs, which we deliberately postponed in spring 2020 in an early response to the crisis.Let me close this presentation by reiterating that based on our vision to be the starting point for fashion on our strategy to transition to a truly sustainable platform business model and on our strong track record so far, we approach the coming years with even more conviction. We will share a more comprehensive strategy update and lay out our significantly upgraded mid- and long-term growth ambition during our Capital Markets Day today. That concludes our presentation. Let's now go into Q&A.

[Operator]

[Operator Instructions] The first question is from Aneesha Sherman, Bernstein.

[Aneesha Sherman, Research Analyst]

My question is about your profitability guidance for 2021. So am I right to understand that you -- in making this guidance, you were stripping out the entire benefit of the return rates that you experienced in 2020? Meaning, you are anchoring to return rates that are similar to 2019? And if that's the case, then do you expect that if return rates were to remain low, at least through the first half of the year, you would see some upside on that EBIT guidance?

[David Schröder, CFO & Member of Management Board]

Yes. Thank you very much for your question. So our 2021 EBIT guidance reflects both the return rate developments that we have seen in Q1 so far but also our outlook for the return rate development for the rest of the year. And as shared during the presentation, we actually have seen continued return rate benefit in Q1, and we also expect some return rate benefit for the rest of the year, though, at a decreasing rate. And therefore, that's fully accounted for in our full year guidance.

[Operator]

The next question is from Rocco Strauss, Arete Research.

[Rocco Strauss, Analyst]

I guess I have 2. I mean, the first question is on the EUR 30 billion GMV target for 25% and the 10% market share target a few years later. I was just wondering if this is actually comparable to each other? Or if it is a bit of, kind of, like, apples and oranges with respect to the EUR 30 billion, also including tapping into luxury goods or like the premium segment into beauty, home and living and so on? So first question is actually what's included here? Or do these adjacent categories actually provide some additional insights -- sorry, upside potential?And then the second question is on CapEx. Is there anything you can share around, like potential locations of additional hubs, like either U.K. or Eastern Europe? And also, is there some potential for CapEx going, kind of, like, into OpEx with Zalando renting out more kind of like inner-city space or locations to expand at same-day or next-day delivery proposition?

[David Schröder, CFO & Member of Management Board]

Yes. Thank you very much. I would like to defer your first question on the mid- and long-term growth ambition to the -- either the Q&A that we have after the keynote at the CMD today or towards the end when I present the financial section because I think that's really the place where we would like to talk about what is mid- and long-term ambition. But I can assure you, we are happy to answer that question then. On the second one, regarding CapEx, I cannot share exact location would be. What I can share, however, is that we'll obviously use the opportunity when we build new facilities to not only create new capacity for the platform overall but to also close existing wide spots in the network. So what you obviously can see by looking at the map is that we are very strong, especially in Central Europe, when it comes to our network. So you will definitely see us use the opportunity to also go into additional countries with our network.The -- I think inner-city locations are not so much driving our CapEx investments compared to the investments that we typically do in a full-fledged fulfillment center, which are, yes, triple-digit million investments. Those investments are on a very small scale, and therefore, they do not materially impact our CapEx guidance and trajectory going forward.

[Operator]

The next question is from Charlie Muir-Sands, Exane BNP Paribas.

[Charlie Muir-Sands]

Congratulations on a strong year. It was very helpful that you provided that breakout of the returns rate benefit in 2020. I just wondered whether you felt there was any additional benefits, perhaps marketing effectiveness on the tailwind side. And on the flip side, whether you had any particular COVID-related headwinds in terms of additional costs you'd incurred in 2020? And how we should think about those flowing through or reversing back out in 2021? And then also on your 2021 guidance, I just wondered if you could update us on how many more months you will be waiving commission on connected retail and how much effectively in terms of profit, that means, you are foregoing?

[David Schröder, CFO & Member of Management Board]

Sure. So on 2020 tailwinds and headwinds, I think we broke out the by far most significant tailwind, which was around the return rate. As you rightfully noted, though, there were some less significant tailwinds. For sure, obviously, we benefited from the strong organic consumer demand and that also made our marketing investments more efficient. We saw that resulting in higher ROIs for our marketing investments. And therefore, we felt compelled to ramp up our marketing significantly over the course of the past 3 quarters. I think another benefit that I mentioned in the presentation was around our overhead costs. So we definitely saw that the business grew much faster than we could even attempt to hire additional people, letting alone that we instituted a hiring freeze in response to the crisis and back in March before we then became much more confident again over the course of Q2. So that, for sure, also added a bit of benefit for 2020. But as you also rightfully noted, we definitely also faced some headwind or additional costs, so there was definitely a double-digit million amount that we spent on additional safety measures in our logistics network and another double-digit million amount that we spend on additional bonuses to thank our employees for their great dedication and contribution throughout this crisis.As we look forward, I think we've already talked about how we see the return rate benefit unfolding. I think I would expect the overhead benefit to at least partly unwind because we are now trying to catch up with the hiring. The safety measures are still in place to this very moment. So we still do sounds of tests in our logistics centers each week. And we -- obviously, we'll keep that in place until the situation has fully resolved. So these are also still part of our guidance 2021.Now turning back to your second question on Connected Retail, our commission waiver is in place until the end of Q1. As of Q2, we'll gradually start to move back to our standard commission tables. We do that gradually because we want to continue to support partners in what is still a difficult situation for most of them. But eventually, we'll end up in the same range that you know for the Partner Program, which is 5% to 25% commission rate depending on the price point and also on the category.

[Operator]

[Operator Instructions] And the next question is from Anne Critchlow, Societe Generale.

[Anne Critchlow, Equity Analyst]

Could you update us, please, on the number of units per basket for FY '20? And whether it was up or down on FY '19? And also talk a little bit about the salon styling fees that you mentioned? Just your thinking behind that and any implications we need to bear in mind?

[David Schröder, CFO & Member of Management Board]

So on the basket, I don't think we break it further down for you into unit and price impact. But I think we've sketched out the main effects that we've seen last year, which is really around the return rate, and that obviously flowed through our fulfillment cost line and created a nice benefit. Under salon styling fee, I think the intention behind that fee was to make -- yes, to make it an even more premium service and also make clear of what the value proposition of that service is, which is, really, yes, providing personal style advice, high-touch advice, for customers that don't have the time or want some additional inspiration. And therefore -- I think we took some inspiration also from models that you see elsewhere in the world, like [indiscernible] that also charge styling fees because it enables them to provide an even more premium advice and that's also what we do with our service salon.

[Operator]

And the last question is from Simon Irwin, Crédit Suisse.

[Simon William George Irwin, Director]

Can you just talk a little bit about inventory, both in terms of your own current inventory levels, given the strong 1Q and also what sense you have for kind of channel inventory at the moment as to whether you're kind of concerned that brick-and-mortar retailers are sitting on a lot of stock and will have to promote hard as they reopen?

[David Schröder, CFO & Member of Management Board]

So I think we shared with you several months ago that we were becoming quite concerned about the inventory situation for the overall industry as we saw more suppliers and producers becoming much more less reverse in response to the crisis they had seen last year. So we've seen that many brands have cut the breadth of their collections and have also reduced the volume for each single item, quite considerably. And so was our key priority actually in approaching the spring/summer season this year and also in planning for the fall/winter season this year that we can leverage all available supply channels to make sure that we get sufficient supply to serve the still increasing consumer demand.And I'm happy to report that by now, we feel very comfortable that we are in a solid position to capture the full demand opportunity because we've increased our wholesale commitments. We've also found a great way to do joint planning with partners in the Partner Program so that they hold inventory for us available; and also Connected Retail, obviously, will continue to play a big part of our strategy. And therefore, I would rather see the inventory sitting in stores that might -- yes, it might go our way as an opportunity and not really as a risk to our continued positive trajectory.

[Operator]

And this concludes today's Q&A session, and I hand back to the speakers for closing remarks.

[Patrick Kofler, Teamlead Investor Relations]

Yes. Thank you. Thanks, everyone, for attending today's webcast. This concludes our presentation on our full year 2020 results. It was a bit rather short compared to the other ones, but that has more reason because we're excited to welcome you all again at 11:00 a.m. at CET for our 2021 Capital Markets Day. You can access the presentation and documents through our website and the stream we are offering. I hope to see you rather soon, and in the meantime, stay safe. Thanks.

[Operator]

Ladies and gentlemen, thank you for your attendance. This call has been concluded. You may disconnect now.