Earnings Call: H1 2018

Aug 1, 2018

Good day, and welcome to the Walter's Kluva Half Year Results Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Meg Geldens, Vice President, Investor Relations. Please go ahead, ma'am. Good morning, everyone, and welcome to the Wolters Kluwer Half Year twenty eighteen Results Call. Today's results release and the slides for this presentation are available for download from the Investors page of our website, volterskuhr.com. With me today are Nancy McKinstry, our CEO and Kevin Entrekin, our CFO. Nancy and Kevin will shortly discuss key features of our first half results. Following their comments, we will open the call to your questions. Before we get started, let me remind you that some statements we make today may be forward looking. We caution that these forward looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those indicated in the forward looking statements. You can find a discussion of the risk factors in our 2017 annual report. This year, we began reporting under the IFRS 15 standard for revenue recognition. Financials for 2017 have been restated. You can find more detail in Note 3 of the press release. As we have not restated 2017 organic growth, we have where relevant made year on year comparisons based on IAS 18. On today's call, we will refer to adjusted profits, which exclude non benchmark items. We also refer to growth in constant currency, which excludes the effect of currency movements, and we refer to organic growth, which excludes both the effect of currency and the effect of acquisitions and disposals. You can find reconciliations and more information on our website. With that, I'd like to turn the call over to Nancy. Thank you, Meg, and good morning, everyone. I will start by giving you the highlights. Kevin will then cover the financials in detail. And after that, I will come back and discuss divisional developments and give you a brief update on our strategic progress. So let's start with the highlights. We had a good start to the year with accelerated growth and an improved operating profit margin. Our strategy of focusing on expert solutions, extending our market reach and driving efficiencies has been fundamental to delivering these results. Our organic growth was 4% with digitals and services up 5%. Our adjusted operating profit margin increased to 22 point 3%. Cash generation was good and our balance sheet remains strong. We also delivered increased cash returns to our shareholders. It's been a good first half, and we are on track to meet our full year guidance. So now I'd like to hand it over to Kevin, who will talk through the financials in more detail. Thank you, Nancy. First, let's cover the headline figures. Organic revenue growth was 4%. Under prior year IAS 18 accounting standards, organic growth would have also been 4%, a clear improvement over the 2% organic growth of a year ago. Adjusted operating profit was €451,000,000 and our margin increased 100 basis points to 22.3%. As noted in our release, there were €16,000,000 of 1 time benefits included in this figure compared to EUR 4,000,000 in the prior period. Without these one time benefits, the margin would have increased by 40 basis points. Diluted adjusted EPS increased 22% in constant currency. Adjusted free cash flow was €263,000,000 up 15% in constant currency. Our leverage ratio improved to 1.7x net debt to EBITDA. Now let's take a brief look at the divisions. We're very pleased to report positive organic growth in all four of our divisions for the first half. As many of you are aware, this is the first time in many years that we're able to say that. Health is still tracking good organic growth of 5%. Tax and Accounting recorded 6% organic growth. Under IAS 18, the division would have reported 5% organic growth, a meaningful improvement over the 3% in the prior period. This performance was driven by the ongoing mix shift towards software and the upturn in research and learning and emerging markets. In addition, Tagetik grew double digits and became organic in the 2nd quarter. GRC recorded 3% organic growth. Under IAS 18, it would have been 2%, in line with the comparable period. And last but not least, legal and regulatory showed the most significant improvement in this period, reaching a 2% positive organic growth. This compares to a 2% decline in the prior period. The improvement was driven by accelerated digital revenues, a slower decline in print revenues, partly due to favorable publishing schedule and double digit organic growth at enablon. Recurring revenues were the key driver of organic growth. They now make up 79% of our total revenues and grew 5% organically. As a reminder, recurring revenues include digital and print subscription revenues, software maintenance and other revenues, which tend to renew year after year. Non recurring revenue trends were mixed. Print books declined 3% organically and account for just 4% of revenues in the first half. In the GRC division, legal services transaction revenues were very strong, up 9%, while financial service transaction revenues declined 4%, including a double digit fall in mortgage related volumes. Other nonrecurring revenues increased 5%. Here, we had positive organic growth in all divisions. Now turning to adjusted operating profits. Overall, we recorded a 100 basis point improvement in our operating margin to 22.3%. This included €16,000,000 of onetime benefits. In tax and accounting, we had a real estate disposal benefit of 6 €1,000,000 In legal and regulatory, we released a €6,000,000 provision. At the corporate level, we had a €4,000,000 in onetime benefits mainly relating to payroll taxes. Without these benefits, the margin would have increased 40 basis points. The underlying improvement was a little better than we had guided. Several key product launches, restructuring and investment projects ramped up late in the first half and will weigh more heavily on the margin in the second half. Now let's run through the rest of the income statement. Adjusted financing costs declined to €49,000,000 This reflects the redemption of our €750,000,000 senior euro bond that matured in April. Following further clarification and reviews of the U. S. Tax regulations, we now determine that our benchmark tax rate on adjusted profits will be in a range of between 25% 26%. We reported 25.5% at the half year to reflect this related updated view. The diluted weighted average share count decreased by 3%, reflecting the ongoing share buyback program. As a result, diluted adjusted EPS increased 22% in constant currency to €1.06 Now let's turn to cash flow. Our cash conversion ratio increased to 99% in the first half compared to 95% a year ago. CapEx included real estate disposals. If we exclude these onetime disposals, CapEx as a percentage of revenue was 4.8%, close to our normal range of between 5% 6% of revenues. Working capital outflows reduced to €10,000,000 due to currency movements. Cash financing costs increased slightly to €84,000,000 We had one final coupon payment on the euro bond that I mentioned earlier. Cash taxes paid increased to €124,000,000 This was the result of taxable gains on divestments, repatriation taxes and full utilization of our U. S. Deferred tax assets during the first half as expected. All in all, adjusted free cash flow increased 2% and 5% in constant currencies to EUR 263,000,000 Now a few comments on how we deployed this cash. As you can see from our debt movement schedule, €182,000,000 went to the payment of the final 2017 dividend paid to shareholders in May. Acquisition spending was only €22,000,000 This related to our Firecracker acquisition, the adaptive learning solution we acquired in the medical arena and earn outs on earlier acquisitions. Cash proceeds from divestitures were €302,000,000 reflecting the disposal of probation, Core Search and certain Swedish assets. We spent 2 €60,000,000 on share buybacks in the first half. As a result, we reported a 5% reduction in net debt compared with the full year 2017. This moved our debt leverage ratio a little lower to 1.7x net debt to EBITDA. A few words on the dividend and share buyback for the remainder of this year. As you know, back in February, we announced that we would start to pay out a higher portion of our dividend at the interim stage. We set the interim dividend at 40% of the prior year total. That means the interim dividend will be €0.34 which we will pay in September. Regarding the share buyback program, including the buybacks we executed in July, we now have completed €300,000,000 in share buybacks already this year. This morning, we announced that we now plan to repurchase €250,000,000 in the remaining months of this year, taking the full year total to €550,000,000 So to sum up our results. We're pleased to report improved organic growth of 4% compared to 2% a year ago. We delivered an increase in the margin, 100 basis points in total, including one time benefits. Even without these one time items, the margin was up 40 basis points. Adjusted EPS increased 22% in constant currencies, enhanced by reduced interest cost and tax rate and of course the lower share count. Our cash conversion was good. Free cash flow increased 15% in constant currencies, and our balance sheet remains strong. We've accelerated the share buyback program. We now expect to spend a total of €550,000,000 in 2018. With that, I'd like to hand it back to Nancy to cover developments in our divisions. Thank you, Kevin. Let me start with a brief update of our 4 divisions beginning with Health. Health delivered 5% organic growth driven by clinical solutions, which posted 10% growth. The margin increased to 25.3% benefiting from favorable timing of investments. In Clinical Solutions, we saw continued strong performance at UpToDate and in Drug Information. We have reorganized our clinical effectiveness units around major customer segments, enabling us to approach the market with a full suite of solutions spanning the continuum of care and enhancing our cross selling efforts. We also launched UpToDate Advanced, a next generation product, which I'll highlight shortly. In Health Learning, Research and Practice, we recorded 1% organic growth, driven by continued growth in digital revenues. Our medical journal business was soft overall as good growth in Ovid digital subscriptions was offset by declines in print subscriptions, advertising and reprints. In education and practice, we had positive growth overall driven by strong double digit growth in our digital learning and practice solutions for nurses. Tax and Accounting delivered 6% organic growth. Software products, which make up 74% of the divisional's revenues, continue to show mid single digit growth around the world. Organic growth improved from 3% to 5% under IAS 18 accounting. This improvement was driven primarily by Togetic and a good first half in research and learning. The margin declined to 25.1% due to the dilutive effect of TEGetic and increased investments in cloud solutions. In North America, we saw continued good growth in our professional software revenues driven by CCH Access, while our information business, Research and Learning experienced increased demand for books and seminars covering the new U. S. Tax regulation. In Europe, we also saw continued robust growth in software and we continue to invest and roll out new cloud based solutions such as Genya in Italy. Asia Pacific, including China and India, saw good growth in software and other digital products, but this was offset by print declines and weakness in Brazil. In our new corporate performance solution unit, TEGETIC, which became organic in the Q2, delivered double digit organic growth. TeamMate continued to roll out its cloud solution to the market, delivering single digit organic growth in the first half. So now moving on to Governance, Risk and Compliance. GRC recorded 3% organic growth, while the margin increased 130 basis points. Legal Services delivered 5% organic growth. CT, which provides legal services to corporations and law firms, achieved good organic growth supported by robust growth in law firm search and filing transactions. Enterprise Legal Management, which provides spend and matter management software to corporations and law firms, recorded high single digit growth driven by new customer additions, recent product launches and prior year new license sales. Financial Services organic growth positive, but subdued as growth in recurring software revenues was offset by a decline in transactional revenues. Finance Risk and Reporting delivered good mid single digit growth driven by recurring software maintenance revenues. Lean Solutions managed to do well in a challenging commercial lending market by gaining share and expanding into new customer segments. And now turning to legal and regulatory. Legal and regulatory delivered 2% organic growth. This was a significant improvement on the comparable period when revenues declined 2%. The margin increased to 12 0.2%, benefiting from a one time release of a provision and favorable timing of revenues and costs. We saw positive organic growth in our European Legal Information Solutions unit for the first time in many years, driven by the acceleration in digital revenues. We continue to enhance our digital solutions and this year we are launching the first module of a completely redesigned legal research platform in Italy called 1 Fiscali. The decline in print abated, but this was largely due to a favorable publishing schedule, which we expect will reverse in the second half. Our Our U. S. Legal Information Solutions unit also delivered positive organic growth supported by digital revenues and an improvement in print related products due to a favorable publishing schedule. And in legal and regulatory software, we had a strong start to the year posting double digit organic growth at both Enablon and at our legal software unit. I now wanted to give you a brief update on our strategic progress. Many of you know we are now in the 3rd year of our current 3 year strategy plan. This plan has successfully supported our continued transformation. We completed several non core divestments, sharpening our portfolio. We've also extended our solutions into new geographies and market segments, driving strong growth in our digital business. We continue to evolve our business towards expert solutions, leveraging our deep domain expertise into productivity enhancing workflow tools. Increasingly, these tools are cloud based and use advanced technologies such as artificial intelligence to deliver even more value to our customers. At the same time, we continue our efforts to find efficiencies, rationalizing our real estate footprint, reducing our IT costs and driving the modernization of our back office systems. I'd like to highlight 2 very recent product launches. In Health, we launched UpToDate Advanced in the U. S. Market in the Q1. This next generation product is an add on to the core UpToDate product and introduces patient specific guided treatment pathways, enabling the doctor to personalize the treatment to his patient's specific circumstances. It's very early days, but we are seeing a lot of interest in the market and we already have some paying customers among individual doctors who tend to be the early adopters. We are ramping up the sales and marketing effort and investing in further product development. The second recent launch that I'd like to highlight is 1 Fiscali launched by our legal and regulatory group in Italy just a few weeks ago. 1 Fiscali has been built in house in close collaboration with our Italian customers and utilizes the core technology components curated by our global platform organization, which is our centralized technology team. 1fiscali brings the most advanced research technologies to tax research in Italy. It has an intuitive, customizable interface that delivers quick answers and significant time savings to the tax advisor. Now I'd like to wrap up with the outlook and the summary. Health for the full year, we continue to expect Health to deliver good organic growth similar to prior year's levels. With investment expected to be weighted to the second half, we continue to expect a stable adjusted operating profit margin. Tax and Accounting for the full year, we continue to expect improved organic growth and including one time benefits recorded in the first half, we now anticipate a modest increase in adjusted operating profit margin for the full year. For governance, risk and compliance, we continue to expect good organic growth and an improved margin for the full year. Legal and Regulatory, the division faces a comparable challenging comparable in the second half and as a result, we expect organic revenue to be flat to slightly positive in the full year 2018, including one time benefits realized in the first half and with restructuring weighted to the second half, we continue to expect the full year margin to be stable. So today, we reiterate our guidance for the group as a whole. We continue to expect the adjusted operating profit margin to be between 22.5% 23%. And to be clear, this includes the one time items we recorded in the first half. We continue to expect adjusted free cash flow to be between €725,000,000 €750,000,000 in constant currencies. We expect return on invested capital between 10% 10.5 percent and we expect 10% to 15% growth in diluted adjusted EPS in constant currencies. So in conclusion, we had a good first half and we remain excited about the prospects for our business. So thank you and we can now turn it over to Q and A. Thank And our first question comes from Nick Dempsey from Barclays. Your line is now open. Please go ahead. Hi. Good morning, guys. Three questions, please. So first one, you were clear there Nancy about the $22,500,000 to $23,000,000 not being changed despite you have a 16,000,000 one off benefit. That looks to me like 35 to 40 basis points on a full year basis. So is this really an underlying cuts to your margin guidance excluding those one offs? Or are you just not changing things because it's a range you still need to execute in the second half, but including that one off benefit you'd hope to come in the top end of the range? Second question, you delivered 4.1% organic revenue growth, I think, in the first half when we look at the back of the statement. If you were showing that without having IFRS 15, I know there are a few benefits first half, second half, what would that have been? Last question, if FX stays where it is now, what will the net financing cost be for the full year? Okay. So I'll start and then Kevin hand off on the 3rd question. So just on the margin question, we feel obviously good about the top line growth we delivered. We also as you can see, the mix continues to shift to digital, which is again a positive overall for the long term development on margin. We give a range. We still have some investments that begin to ramp in the second half. So we still have the second half to deliver. But again, we feel good about the underlying health of the business. So I think the range stands. On the growth, what you can see in the back is it's actually the growth was a little bit higher than what you said. If you calculate it's more closer to 4.4% organic growth under IFRS 15. So again rounded to 4, if you calculated that under IAS 18, it would still round to a 4, but it would be rounding up from the high 3s to a 4. So there is a bit of a difference there. But all in all, rounded to a 4. And then on ForEx? On I think your question was on financing costs for the full year, Nick. I think we've given you guidance on Page 2 of the press release. We expect it to be about €70,000,000 excluding movements in currency. Yes. Sorry, Kevin. My question was there have been some movements in currency. If currency stays where it is, roughly, what would it be for the year? In other words, what's the impact of currency on that 70? We haven't given you that, but you should expect that 70 assumes that there won't be movements in the balance of the year. Okay. Thank you. Our next question comes from Chris Collett from Deutsche Bank. Please go ahead. Your line is now open. Good morning. Yes, thanks for taking the questions. So I had one question was just on Health and ME where you said that was soft. I was just wondering if you could give some more explanations as to why that is since it seemed like a pretty attractive fast growing underpenetrated market. Second question was then just on tax. Certainly, it looks like some benefit in areas like research and learning being strong, although generally that's been a sort of fairly soft area. I guess there's some benefit there from the tax reform and also benefit from tax reform on some of the print business within tax. So just wondering, could you just sort of give us an idea as to perhaps what the overall one time benefit, if you like, from tax reform in the U. S. Was on the Tax and Accounting division? And then thirdly, could I just come back to Nick's question about the €90,000,000 of organic growth? Could you just give us the figure of what that would have what that €90,000,000 would have been on an unchanged accounting basis? Okay. So I'll start and then hand off to Kevin. So on the Health business, again, overall pleased with the 5% organic growth. Softer first half new sales in softer first half new sales in 2018 in part due to the fact that we have now reorganized clinical effectiveness so that we can buy customer segments. So now our salespeople will sell the entire product suite of up to date drug information and Emmy. So we now expect in the second half of twenty eighteen to see improved new sales at Emmy because we're essentially expanding the sales force. So we're overall quite still quite pleased with having acquired this. It allows us to be again to have this broader product suite across the whole continuum of care. So I think you should see this as a bit of a reaction to just having the reorganization take place. And then on tax, the benefit as you point out coming from the tax reform relatively modest but did improve the results in research and learning, largely again through books. So in total, it's $3,000,000 to $4,000,000 of incremental revenues from training and books in that area. And now I'll turn it back to Kevin on the last question. Yes. Chris, on organic growth, if you go to the tables in the back of the press release, obviously, you've got to take disposals out, but the organic growth calculation would come to around 4.4%. So that's a rounded down 4% organic growth. Under IAS 18, we've given you some indication on the tax division and GRC that the organic growth would have been about a 1% less under the old accounting standards. Health and legal and regulatory, the change is immaterial. So you can kind of work out what the organic growth would be there. So again, still rounding to a 4% but rounding in the different in the opposite direction, if you understand, yes? Right. Okay. So it's about a 1% impact, which is coming partly in GRC and then about a 1% impact in tax? It's not a big decision. So, about So about $15,000,000 to $60,000,000 to $60,000,000 Right. Okay. Thank you. Yes. Okay. Our next question comes from Guido Nunez from Kepler Cheuvreux. Please go ahead. Your line is now open. Good morning. Thank you for taking the questions. First question on tax and accounting. We haven't seen an improvement like this in quite a while. I get a feeling that the Gediq is a big contributor of this. Would you say that the 5%, 6% is more of a structural growth level we can expect from the division? Secondly, also on the financial costs of €70,000,000 guided, €20,000,000 for H2 seems pretty low for the balance sheet size you have, so maybe a bit more color there. And lastly, I just I noted that the adjusted operating profit, why do you leave in the one time effect? Thanks. Okay. So on tax and accounting, yes, I think you should see this as the underlying growth trajectory of the division improving in a structural way and that's really coming from a couple of elements. One is this is our this is the division that has the most software solution revenues of all the 4 divisions. And obviously those products grow very nicely and continue to grow around the world, particularly as we're launching cloud. So that's one factor. And then the second factor is that both TeamMate and Tagetik continue to grow at higher organic growth rates. And so that is again creating a positive lift overall. So we're pleased with where we stand and again we continue to invest here to grow the business. And I'll hand it over to Kevin for the two questions on finance and operating margin. Certainly. On the guidance on the $70,000,000 on the finance costs, one thing you have to remember is we do strip out non benchmark items. And if you go back to Note 5 in the press release, there's a reconciliation there that will help you see what those are. And on the adjusted operating profit margin, the onetime items we include, but we wanted to highlight them for you, the things that we exclude from the adjusted operating profit margin are largely things related to acquisitions and divestitures. But if there are onetime items of another nature, like we've highlighted today, we want to make sure that you're aware of that. And then on the adjusted operating? Okay, good. Our next question comes from Matthew Walker from Credit Suisse. Thanks. Good morning, everyone. I've got a few questions, please. The first is for Nancy, which is obviously you're coming to the end of the 3 year program, which has obviously been very successful. But I guess the question is what do you think about what's coming next? Do you think the priorities or investment levels or ambitions are going to change materially from what you've already laid out? Second question is when you gave the organic growth guidance by division at the beginning of the year with the full year results, Were you anticipating the benefit from I think you just quantified it in the first half of roughly 50, 60 bps on the group from IFRS 15, which is impacting tax and GRC. Did you when you gave those guidances, did you implicitly include the benefit from IFRS accounting in the guidance or not? And finally, on legal, I think at the beginning of the year, you guided to stable margin. Now I think you're guiding to stable margin, including the one time items, which I think are about 70 basis points of benefits. So if you could just explain, does that mean that you're reducing your underlying legal margin guidance? Thank you. Yes. So just on the strategy, obviously, we are quite pleased with where we stand today as a business. The portfolio is healthy and we are very encouraged by the good growth, particularly obviously on the digital side of the business. So you shouldn't you should see that the next 3 year plan will build on that foundation and really be an evolution. But I think you'll begin to see that we'll be moving more and more to a higher percentage of our products or our revenues coming from expert solutions and global solutions and improved ways that we go to market on the go to market. So I think from an investment perspective, it will be we'll continue to invest at the same rate of 8% to 10% of our revenues going back into new and enhanced products. But I think you'll see us so I don't think the investment levels will change materially. I just think that you'll begin to see us have, the mix will shift more and more towards expert solutions and more of those being global in nature. And more to come. We're still obviously continuing to debate the strategy and we'll talk to you more about that in February. Kevin, do you want to talk about the underlying margins in Legal and Sure. I would say that I think one of your questions was on the organic growth guidance. The guidance that we've given you by division at the beginning of the year, yes, that did include the conversion over to IFRS 15. With regard to the margin in our legal and regulatory business, yes, indeed, we did have a onetime item in the first half of the year. I would say in the second half of the year, I think we as I said in some of my commentary, we will be stepping up some of our investments in product and restructuring in the second half of the year. So it will wait a little bit more. Those items will wait more to the second half. So effectively, you're using the additional benefit of the one time items in the first half of the year in legal to basically use that money to spend because you're going to have a you were basically targeting flat margin anyway. So you thought, okay, we might as well spend this to make the division better. Is that a fair? Yes. That's a fair characterization. Yes. Yes. All right. Okay. It's not unusual for us to accelerate certain investment programs throughout the year. So that's pretty common. All right. Thank you. Our next question comes from Patrick Wellington from Morgan Stanley. Please go ahead. Your line is now open. Good morning, everybody. Three questions. EMEA has gone a little bit off the boil. Enablon went a little bit off the boil just after you bought it. You've made some relatively high multiple acquisitions. So are you happy in your sort of future targeting of acquisitions that you're sort of you're targeting is on the mark, if you like? I mean, I know it's a slightly awkward question, but 2 out of the 3 have not quite performed to expectations. So some general commentary around that. Secondly, I think in the statement, it might be a standard statement, but you say that there could be disposals in the second half, which could impact earnings. We've had a lot of disposals already this year. So is that just a generic statement that you throw in for completeness? Or are you going to, again, sort of be looking actively at disposals in the second half? And then thirdly, sorry to go back to the €16,000,000 of 1 off items, but at a very simple level, when you set your guidance at the beginning of the year, did you know about the $16,000,000 of items at that point? Were they in the guidance at that point? Or has effectively the guidance changed with that 16,000,000 dollars Yes. Okay. So I'll cover the 2 and then Kevin will pick up on the last question. So on EME, if you look at the acquisitions that we've made, they've been very fundamental to pushing us into adjacent segments that connect to our core business and the adjacent segments have underlying higher organic growth rates. And so we're very pleased that we made those moves. And if you look financially, Patrick, the acquisitions including ME and Enablon, we're still earning a good return from those relative to our criteria. So overall, still makes sense for us to continue to think about bolt on acquisitions again very much in sort of the adjacencies to where we sit today. So what happens when something goes gets off to a slow start? I would say that each case is different. I think with Enablon, the shift to SaaS was much, much more pronounced than we had expected. And so what you now see with Enablon having double digit growth through the first half of twenty eighteen is you're seeing the benefit of now those SaaS contracts coming through. And we continue to add very multinational blue chip kinds of customers to Enablon. And I think you can see that Enablon is really helping to remake the legal and regulatory division along with some of the other software. On EME, again, patient engagement, fast growing segment now that we've reorganized with us being able to leverage all the salespeople we have out there for up to date in the drug business, we expect that the new sales will pick up nicely. So I'm still quite happy with these being brought into the Wolters Kluwer family. On the disposals, we it is sort of a stock sentence that we put in the press release. But as you know, we there are areas in the portfolio that we would like to trim if we can. So we continue to think about disposals, but until something happens, we don't talk specifically about them. And with regard to the $16,000,000 in one time items, we were actively pursuing a sale of the building. So that was anticipated, but not necessarily didn't know what would happen in the first half. The other two items were not included. Okay. And so the other two items, effectively, as Nick opened the call, detract from your guidance in the sense that they're one off, but the guidance hasn't changed. Are these are you just as I go back to his original question, are you just being a bit conservative there? I mean, those items aren't big enough, you really feel to make it worth changing your guidance? I would say that the guidance is a range, Patrick. So keep that in mind. And I would say that we still are looking to deliver a good second half. So it's still halfway through the year. That's great. Thank you. So, yes. Appear to be no further questions. So at this time, I would like to turn the conference back over to, Nancy for any further or additional closing remarks. Thank you very much everyone for joining us and thanks for your questions. We look forward to speaking with you again soon.