Good morning, good afternoon, ladies and gentlemen, and welcome to Besi's quarterly conference call and audio webcast to discuss the company's 2018 fourth quarter and annual results. You can log in to the audio webcast via besi.com. Joining us today are Mr. Richard Blickman, Chief Executive Officer, and Mr. Cor te Hennepe, Senior Vice President, Finance. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session, and instructions will follow at that time. As a reminder, ladies and gentlemen, this conference is being recorded and cannot be reproduced in whole or in part without written permission from the company. I would now like to turn the call over to Mr. Richard Blickman.
Thank you all for joining us today. We will begin by making a few comments in connection with the press release we issued earlier today. Then take your questions. I would like to remind you that some of the comments made during this call and some of the answers in response to your questions by management may contain forward-looking statements. Such statements may involve uncertainties and risks, as described in the earnings release and other reports filed with the AFM. For today's call, we'd like to review the key highlights for our fourth quarter and year ended December 31st. Also update you on the market, our strategy, and the outlook. First, some overall thoughts on the year and Q4 results. For the fourth quarter, revenue of EUR 92.5 million and a net income of EUR 22.7 million compared favorably to expectations.
A higher-than-anticipated gross margin of 56.4% and a decrease in sequential operating expenses helped us exceed operating profit guidance, despite a 20.7% revenue decrease versus the third quarter. In addition, net cash continued to build and ended the year at EUR 199.4 million. There were a couple of items to note in the fourth quarter results. The 11% sequential operating expense decrease versus the third quarter last year was aided by a number of favorable one-time year-end recordings. Such recordings included reductions in the warranty provision due to favorable experience in recent years, the pension curtailment benefit related to headcount reductions, and some favorable R&D grants received. As such, baseline operating expenses, which include all one-time items, variable compensation, restructuring, and Forex effects, declined by 2.3% to EUR 25.7 million in Q4 versus Q3 2018.
In addition, we had a net tax benefit in Q4, due mainly to EUR 4.8 million in tax credits associated with the Innovation Box program of the Dutch government for the period 2015 to 2018. This program is ongoing and related to R&D activities performed in the Netherlands. Besi's 2018 results reflected solid performance and strategic execution in an assembly equipment market significantly more challenging than 2017. Revenue in total of EUR 525.3 million and a net income of EUR 136.3 million, declined by 11.4% and 21.3% respectively, versus 2017. Our 2018 revenue development was primarily affected by a second quarter slowdown in high-end mobile demand, followed by broad weakness in memory and other end-user markets starting in the third quarter of the year. Revenue development was also adversely affected by Forex headwinds from a 4.5% average decrease in the value of the U.S. dollar versus the euro.
In retrospect, it appears that Besi's second quarter order weakness was an early indication of an industry downturn post an extended upward trajectory, which began in the second half of 2016. In the current downturn, we rapidly aligned production, supply chain, and personnel in response to adverse market conditions. As a result, Besi was able to maintain peer-leading metrics of profitability, such as gross margin and net margin of 56.8% and 25.9%, and a return on equity of 33.8%. In fact, gross margins exceeded 56% in each quarter of 2018, despite a revenue decline of 42.6% between the second and the fourth quarter of the year. Further, we successfully reduced costs in the face of decreased customer demand due to the ongoing execution of strategic initiatives, continued reductions of European fixed overhead, and the realignment of temporary Asian production personnel to a changing market environment.
Wanted to inform you of a minor change to our supplemental information presented. We are opting to present only orders from now on instead of backlog going forward as the preferred means of viewing Besi's prospects in future periods. Backlog is now much less meaningful as an indicator than previously given the significant shortening of cycle times to customers, which most often are less than three months. Periodic revenue volatility is nothing new to our industry. In fact, periods of less robust growth let us further hone our strategy and financial potential to capitalize on the next major industry upturn. As you can see in this next chart, we took action in Q2 2018 to scale back supply chain activities and temporary production personnel, once we saw that market conditions were weakening. We realized our objective to reduce total headcount by approximately 16% by year-end.
In addition, Besi continues to reduce European overhead and has reduced fixed headcount in certain Asian locations post the large production ramp in 2017. In this way, we aim to keep net margins and cash generation well above prior trough levels. From a longer-term perspective, we're on track to further reduce annualized structural cost and reach our savings target of EUR 15 million to EUR 20 million per year by 2021. Our liquidity position improved significantly this quarter, with net cash increasing by EUR 39.3 million or 24.5% due to continued healthy profit generation and reduced working capital needs in the current downturn. We ended the quarter with cash and deposits of EUR 475.5 million or EUR 5.68 per share, equal to almost 31% of Besi's stock price of EUR 18.48 at year-end. In this next slide, you can see how Besi's cash generation has improved over the past five years.
Cash flow from operations has steadily improved from 19% of revenue in 2014 to 35% in 2018, even considering both industry upturns and downturns. It also underlines the enhanced flexibility and scalability of the business model in recent years. Strong cash generation continues to support a shareholder-friendly capital allocation program. For all of 2018, we returned to shareholders EUR 209.5 million in the form of dividends and share repurchases. We will have returned to investors a total of EUR 608.4 million or EUR 6.57 per share from 2011 to 2018, assuming the proposed dividend and share repurchases to date. During 2018, we also upped our quarterly share repurchases from approximately EUR 6 million to EUR 12 million per quarter. For the full year, EUR 35.5 million in share repurchases were made, an increase of 51% versus 2017. Share repurchases are continuing in 2019.
Given continued strong cash flow generation and our solid liquidity position, we propose to pay a cash dividend over the fiscal 2018 of EUR 1.67 per share for approval at our AGM, April 2019. This represents a payout ratio of approximately 91% or an approximately 9% dividend yield relative to our year-end stock price. I'd like to speak a little bit about the current market environment. VLSI Research now estimates that the assembly equipment market was approximately $4.6 billion in 2018 and approximately flat with 2017. They also forecast that the market will decline by 12.4% in 2019, primarily related to slowing global economic growth, trade frictions, cautious customer order patterns, and excess memory and smartphone capacity given the large build-out in 2016 and 2017.
VLSI expects a rebound in 2020 of almost 10% as capacity utilization rates will increase and new products are introduced. Despite challenging market conditions currently, there are many reasons for optimism about the direction of the assembly equipment market and Besi's prospects. We have a leading position in the advanced packaging space, whose outlook is bright as an important enabler of the digital society and the new applications which will be generated along with it. The advent of the 5G capabilities, artificial intelligence, and the ever-increasing amounts of advanced logic memory capacity necessary for the build-out of cloud infrastructure should be strong drivers of innovation and growth in the next customer investment round. The significant customer focus currently is in the development of die bonding and packaging solutions for ever smaller, highly complex, and feature-packed 5G-compatible smartphones.
5G connectivity could accelerate advanced packaging adoption over the next five years in the mobile internet and computing markets, and in applications such as artificial intelligence, automotive electronics, and the Internet of Things. Industry experts estimate that initial 5G subscriptions will be available by 2020, and that by 2024, 55% of North American and 43% of Northeast Asian subscriptions, including China and Japan, will have migrated to 5G. A few words about guidance. At present, the 2019 outlook for this assembly equipment market is hard to predict. There are many factors which could influence the outlook and timing of any anticipated rebound this year, such as slowing global growth and trade frictions between the U.S. and China.
Looking specifically to the first quarter, we estimate that revenue will decline by approximately 15% versus the fourth quarter last year, as difficult market conditions continue in what is traditionally our weakest quarter of the year. However, we expect that gross margins will remain in the 55%-57% range, as we further adjust overhead levels to customer demand. We anticipate that OpEx will increase by 25%-30% versus the fourth quarter, given approximately three and a half million of incremental variable compensation expense and the absence of favorable one-time recordings from the fourth quarter. In contrast, we estimate first quarter 2019 baseline OpEx will increase by only 5%-10% versus the fourth quarter, primarily due to increased R&D spending. Finally, we estimate that our effective tax rate will range between 10% and 15% for 2019, and that CapEx will be approximately EUR 4 million.
That ends my prepared remarks. I would like to open the call now for some questions. Operator.
Thank you, sir. Ladies and gentlemen, we're starting the question and answer session now. If you have a question or remark, please press star one now on your telephone. Star one for questions or remarks. Go ahead, please. Our first question is from Mr. Peter Olsen, Kepler Cheuvreux. Go ahead, sir, your line is open.
Good afternoon, gentlemen. Quite a few questions, but I will limit myself to some questions on the adoption of new technology and potential demand drivers. Maybe starting on the mobile side of the business and specifically fan-out. What are you seeing in terms of the adoption of fan-out wafer-level packaging? Do you see that broadening beyond the big OEM that drove the investments a few years ago? What are you seeing in terms of traction with the new AP-800 series for fan-out that you launched last year?
Well, the answer is very simple. At this moment, we don't see any accelerated investments in fan-out. As we mentioned in previous calls, certain infrastructure has been installed, and that is apparently, at this moment, sufficient to support the demand.
Okay. In terms of Panel-level packaging, any traction there, or is that more for future years?
That's more for future, there are some very interesting development programs where we are involved, and our platform, already installed in the world, is widely recognized as the most advanced in the industry. For the future, we can expect very positive interest.
Okay. Maybe on the memory market, where historically you were a little bit less exposed. It seems there is an emerging trend towards flip-chip. Do you see that happening in a meaningful way this year? Is your positioning in flip-chip for memory as strong as in some other flip-chip segments?
I would argue even stronger. We have launched a new version flip-chip machine, which is currently being qualified by several of the memory manufacturers, and that machine is much faster than any other system on the market today. However, still, in memory, it is a very big cost battle, so any way to avoid flip-chip will be used by the memory manufacturers. At some point they will be forced, whether that is this year or next year, more likely next generation, in my view. Besi is in an excellent position.
Okay. That's helpful. Maybe finally on the computing side, with your large U.S. IDM customer looking to ramp up 10 nanometer production this year, is that potentially going to drive investments in die-attach and die sorting equipment this year?
Yes. Answer is yes. On the previous call, we mentioned that transition is now, you could say, finally underway, and we are very well involved in that. You could also argue, if that would not be the case, our numbers would look worse.
Does that mean there was already some contribution in Q4 and also in Q1?
Yes.
Okay. That's clear. Thank you.
The next question is from Mr. Nigel van Putten, Kempen & Co. Go ahead please, sir.
Hi, good afternoon. I have a question on the gross margin guidance. It's quite remarkable that you're guiding for a similar gross margin despite halving revenue year-over-year. I understand that you don't guide beyond the current quarter, but would it make sense to say that the gross margin should already see a bottom in the first quarter of 2019 and improve from then on? It sounds kind of weird that 56% will be a low point, but you've consistently delivered on margins north of 56% for the last eight quarters. With revenue at least seasonally improving, I'm just asking that, you see that as a likelihood or a possibility?
Well, the factors influencing gross margin are in the first place, product related. It depends very much on the product mix going forward. We have said in several calls that there is a difference between gross margins in the smartphone space, computer space, and automotive space. Also, there's a margin delta in the higher end versus the medium end. You have to define a certain scenario. At the same time, there's ongoing cost reduction. We are improving our supply chain, we are improving our cost structure in operations. Anticipating certain ongoing developments, it's very encouraging that we guided some time ago that the low end of the gross margin would be around the low 50s.
It appears to be somewhat higher, even taking into account a headwind from a U.S. dollar, still a major part of our business, over 50%, over 60% is U.S. dollar-based. Also the dollar has an impact on that gross margin. Will the dollar slide due to trade wars, et cetera? That will have a negative impact. All these variations, Nigel, it's hard simply to say, well, if this is the bottom, it's also the bottom of the gross margin. Yeah, you can say it looks very positive.
Yep. That's encouraging. Maybe a follow-up on advanced packaging activity at the subcontractors. I think the largest OSAT has hinted that they might enter a period of what they call disruptive investment. They point to various new introductions like SiP but also system in package. My question is, do you see any sort of renewed, because it's not in your order book, but do you see renewed early activity already maybe building in the year from that side?
I think it's more confirming a longer-term trend. At this moment, order activity across the board is as it is. That has to do with, as we said in the comments, the overall situation, uncertainty. Once that uncertainty becomes less uncertain, you may see investments in directions as you are indicating. When it will be really disruptive is always to be seen. Sometimes there's some wishful thinking.
Experience tells us this industry is not so fast in development, whether it's going from 14 to 10 nanometer or EUV or, well, name many examples. In our view, these new technology introductions will always go slowly. The key is that you have to be involved and in strong positions. If it comes, it certainly will help us.
Very clear. Thank you.
The next question is from Mr. Robert Sanders, Deutsche Bank. Go ahead, your line is open.
Yeah. Hi, good afternoon. My first question is just if you could give an update on the tariff situation in China and how that is affecting your business. Clearly, we've heard some stories about companies moving out of China into the Philippines and into Thailand. I've also heard that some customers are actually even taking their tools and ferrying them out of China. I'd love to get a sort of sense of where we are on that, and I've got a couple of follow-ups. Thanks.
Well, we can only confirm what you have heard, and not only from Semiconductor, but I was sitting next to a person in an airplane from Chengdu to Taipei, and they were moving production of lawnmowers out of China back to Taiwan for the U.S. market. Anyway, Yes, that's happening. Our customers clearly are developing more plans for future productions, expanding, but also new products outside of China. There's clear evidence that the investments of China in semiconductor is slowing down. You would expect it to increase, but it's slowing down. The part of the negative sentiment is due to that uncertainty. Will that ignite a lot of CapEx outside of China? That depends enormously on GDP. Sooner or later, you will have a different landscape, and we are excellently positioned for what's happening in both areas.
Got it. When you think about the VLSI, I know you don't tend to guide, but when you think about this year, 2019, even if just at a high level, clearly in the previous years when you've outgrown the VLSI growth, it's been driven usually by smartphone cycles. In years where there hasn't been a major smartphone upgrade, you've tended to undergrow VLSI. Given that they're now putting a number out there, do you think this is a year more of a kind of transition year and 2020 is the big year for you guys? How are you thinking about it just at a high level?
Well, at a high level, if you follow the, let's say, information out of the high-end smartphone universe, it's pointing towards 2020 next generation. That's not unrealistic because if you look back in history, there's always a two, three-year lapse. That would fit the-
The conference is no longer being recorded.
Okay. Anyway,-
Please wait while the recorder is connected.
Can you still hear me, Rob?
I can hear you.
Okay.
I think the moderator wants to be able to record you.
Go ahead, sir. We have a problem with the technical part.
Recorded or not, doesn't make much difference. Anyway, is 2019 a transition year? It's always hard to tell. This industry is extremely, let's say, sensitive to GDP, et cetera. My biggest, clearly, guidance is more what's happening in the world. VLSI is always behind the facts. They record their observations, which is fine, but, we're prepared whether we have a recovery soon, it would be excellent, and we have been able to ramp 60%, even 80% quarter-on-quarter. If it stays somewhat softer a quarter longer, you've seen our gross margins, you've seen our net margins, you've seen the guidance of the OpEx. That's also fine.
Got it. Just last one on the OpEx. It looks like, I wasn't forecasting that correctly. You're guiding the headline OpEx up 25%-30%, but that includes a EUR 3.5 million one-off, correct?
Yeah.
Beyond that, it should go back to whatever you're guiding minus EUR 3.5, correct?
Correct. Yes.
Okay. Just want to check that. Thanks.
Yeah. The increase is due to some higher R&D spending compared to Q4.
We have a question now from Mr. Mark Hesselink, ING. Go ahead please, sir.
Yes. Thank you for taking the question. My first question would be on the application driving demand for the 5G, which you mentioned also in the press release. I can imagine that that is more the 2020 story you talked before on the call. Could you explain how it's going to drive demand for you? Is it purely that it is driving the replacements for the smartphone, or is it also that the change, the chipset in 5G is driving that demand for you?
Well, the answer is not only smartphone. Probably the sequence will be other devices first and smartphones thereafter. You first need a network, and that's now being rolled out in many countries, cities to start with. First you have the networks, 5G, and then you have the applications. These modules were involved already since four years in the development. We've installed at several customers already equipment to build those modules. But not a switch from one quarter to the next.
No, it's building up over time. Okay.
The transition period, as we said, you can expect in the next five years, the next three years of rollout, that's how it typically happens.
Okay, the earlier comment you made on the increase in the R&D spend. Is that something particular that you have to invest in or is that some request from the clients, or it's just the usual, you want to open up new opportunities going forward?
All of our R&D programs are directly customer-linked. The number of programs and the size of the programs vary. In the last three, four quarters, it has been relatively stable. It's not because we are increasing for a certain application, but it also has to do with, let's say, the program execution. For some of the three of the programs, they will become in a more critical phase to be launched, and then the costs simply increase. That's very natural, and it could decrease again once certain programs come to an end.
Okay, you can see that you're designed in more now at this stage.
Yeah, there's no structural. My comment is a good question. It's not that our R&D is structurally increasing. It is increasing in first quarter versus the fourth quarter, just because of the stages several programs are in. If it would increase structurally, I would certainly inform you that we will have a higher spend in the next quarters going forward to adjust your model, but your model should not change.
Okay, thanks. On the revenue guidance of 15% sequential decline, looking at the order intake, I guess most of the weakness is still in smartphone, offset by some strength in cloud applications. Is it fair to say that automotive is then somewhere in between those two?
Also there's a seasonal aspect there. The first quarter, as we mentioned, is always slower, and key is to see what happens in April and May, and that will determine very much what will happen in Q2. That's too early to tell. The biggest factor, to repeat that again, is how will this U.S., China negotiation settle.
Good. Thanks. Final question on, still want to ask a bit about the M&A. I know in previous calls you said that the valuations were not right yet. Obviously, I know that you cannot share anything likely imminent or anything, but just in general, what are you seeing on the side of potential sellers?
Well, I could answer it maybe as follows, that we are still, as always, very much interested to expand our product offering to the leaders in this industry. If an opportunity along those lines occur, then we are able to act, and that will determine then whether something will happen or not. It's not just because prices are interesting. As you said, of course, if something will occur, we will timely share that. What often happens in downturns, certainly customers realign their strategies. Also, the suppliers, like us, look at their strengths and weaknesses, but also the others. In those downturns, sometimes opportunities arise. Again, customer-driven because it has to, in the end, improve our product position vis-a-vis our main customers. At the same time, due to 100% integration, like KLM and Air France, that should reduce our cost.
Okay. The acquisition that SHINKAWA did, was that something that could have been interesting for you? Because it's in the Japanese supply chain, that was not really something for you anyway.
First of all, you have to ask the question, would that improve our position with our current customers and offer better positions with other customers? Well, the answer to that question is negative. If you look at the entire transaction where SHINKAWA and Yamada have joined, I think for Japan itself, it is a very good development. For us, it's very far away.
Thank you very much.
We have another question from [Mr. Pieter Olsthoorn], Kepler Cheuvreux. Go ahead, [Pieter].
Yes, thanks. I had a few follow-ups. Maybe first for Cor. Following the tax credit in Q4, does this affect the effective tax rate going forward?
Yeah, there will be a slight effect. Usually, we guide between 12% and 15%. Now we can say for the rest of the year, between 10% and 15%. Fluctuations are simply because of profits in jurisdictions and certain facilitations or arrangements, but it's between 10% and 15%, so there will be some effect of this credit.
Okay. There may be a follow-up on one of the earlier questions on China. At the annual analyst meeting in June, you set out some ambitious targets to grow the revenue share of China. Can you disclose what proportion of revenues in 2018 did come from China?
Well, first, China, there are three different sets of customers in China. One is the China customers set, Chinese companies. Number 2 is joint ventures with outside China companies, and three is outside customers having factories in China, like an STMicroelectronics, like an Intel. If you look at that landscape, clearly Chinese semiconductor industry will continue. Over time, we will gain certain market shares. The question is, of course, with the outside companies, that situation has, I would say, changed in anticipation of whatever outcome. That part will be affected. On the other hand, for us, there's no difference whether these machines are installed in China or in Philippines or in Thailand or in Vietnam. We're happy to install anywhere. As a percentage, China will change, but as a total, probably not.
Okay. Maybe another question on your revenue exposure. In the past, you have disclosed your exposure to mobile computing, automotive, et cetera. Is it already something you can disclose, or are you still compiling those data?
We're still compiling the data. To your earlier question, China, what is very interesting, our revenue, with some exceptions, but on average in China has been about 20%-25% of revenue. Our main competitor and peers for over 50%. Bottom line, it can also have a very positive effect on us.
Yeah. It's a big opportunity for you.
Yes.
Yeah. Okay. On the end market disclosure, that is something that will follow at a later stage then.
My guess would be that smartphones, high-end smartphone communication, which was 35%, maybe is now around 30%. Computing is definitely 25%, and auto may have gone up from 17%-20%. That's the different mix. Spare parts has gone up, spare parts has gone to 15%, but we will confirm that data once it is fully settled.
Okay.
in the annual report.
Okay. This is.
These are my guesses.
Okay. Thank you.
Thanks.
Our next question is from Mr. Edwin de Jong, NIBC. Go ahead, please, sir.
Good afternoon, gentlemen. A few questions left on 3D sensing. Has there been any developments in the last quarter? Your Austrian client is, I think, saying that Android is also adopting this technology. Does that require equipment from your side, or can you tell a little bit about that?
Well, there's an ongoing development on a next generation in that 3D sensing, where we are certainly involved, and that is likely to be part of the next generation, for 2020.
Okay.
You will have some further testing in early 2019 or late 2019, models.
Model, then a full rollout for our next generation in 2020. That's what we hear. We're involved in many of the development programs.
Maybe also on working capital, you've had quite a large inflow in Q4, EUR 31 million in working capital. Of course, that's for a large part due to the decrease in revenue. Is there also a seasonal effect in it? If so, can you maybe give a little bit of a feeling how much that would be?
Usually there is a seasonal effect. We always look at, those numbers you can calculate. You look at the DSO net inventory turn. In a rapid declining market, as we've seen it now, inventory turn usually worsens a bit before it goes up, then when all inventory is worked out. DSO usually stays flat or increases a bit when business is down. Customers tend to sit on their money somewhat longer. There's a seasonal effect. When revenue goes down, your working capital will be less. If you look at the metrics, they will go up a bit before they'll be back to normal. Specifically looking at the inventory, once the inventories are back on a normal level. We are organized in a way that there's no risk for obsolete stock. It's not a big topic.
We do see relatively some higher revenue as compared to earlier days, that will be back to normal in the course of 2019. If you look at the development of Besi net cash, we always see three quarters of growth, we pay out the dividend. Of course, net cash is back to the levels where we would like it to be, it goes up. There's nothing specific about that.
Okay. Thank you. Maybe on the Innovation Box tax benefit.
Yeah.
That was one for a couple of years, I think, you said in the first half.
That's a technicality. Once you start to apply for Innovation Box, you have to do that when your tax loss carryforwards are reducing. When you do the application, you can go back to the years that haven't been assessed finally. Those years are always lagging behind reality, lagging behind the current filings. We could go back to 2015 because that was still not finally assessed. That's normal. That's a normal term.
Okay. That's also something that we can expect going forward.
This is, of course, as you can see, for 2015, 2016, 2017, 2018. Going forward, it will have, as we mentioned earlier, an effect on the ETR. That's why we now say the range that you can expect is a bit wider, but it's between and it used to be between 12 and 15. There is some effect, yes.
Okay. Finally, one last. We talk regularly about the developments in solar. Is there anything new there?
No, there's continued evaluation of our technology at those major solar companies. There are some programs in a well advanced stage, and it could be that they will materialize this year. There's no adverse development. It's market acceptance, it is cost, it is life cycle and lifetime guarantee, and that is the testing that takes very long. The interest is still very positive.
That could be an issue for later this year, maybe.
Yeah.
Okay. Thank you.
We have a question from Mr. Robert Sanders, Deutsche Bank. Go ahead, please, sir.
Thanks for taking my call. It's just a few housekeeping ones. One is on the dividend payout ratio. You're averaging, I think, 96% over the last four years on your dividend payout ratio. Should I start modeling this going forward? Because I think you've said historically it's a 40%-100% range. Just from a modeling purposes, that would be good. The other question is just on if you can give me an update on your activities in silicon photonics. Are you doing anything there? Your competitors moving forward, so I'd love to get an initial view on that. Thank you.
Well, dividend is very much depending upon our continued performance. If we continue to perform as we are doing, also in relative terms, there's no reason to change our allocation policy. It may go up and down, our profitability, but the policy is as it stands. On the second question, I already answered. We are very much involved in photonics. Also, the photonics related to the 5G modules are in a very good position. A major installed base already. Yes, that's a very interesting segment of the market.
Okay, great. Thank you.
Gentlemen, we've no further questions. Please continue.
Well, I thank everyone taking the time to listen to this call and your questions. If there are any further questions, don't hesitate to contact us. Goodbye.
Ladies and gentlemen, this concludes this event call. Thank you for attending. You may disconnect your line now.