Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the Azimut Holding third quarter 2019 results conference call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Gabriele Blei, Chief Executive Officer of Azimut Holding. Please go ahead, sir.
Thank you very much. Good afternoon to everyone. We will go through the presentation as always in a second. Just as a first statement, we have just approved the nine-month results, which show the highest profit in our history. We matched the result that we achieved back in 2015. This has been done thanks to the growth in the recurrent revenue component as well as the overall revenue of the group, as well as a good containment of the fixed cost. As we have had the chance to speak to some of you, we have been evolving our business model once again with the strong product innovation, which Azimut Libera Impresa will be bringing over the coming years. This is done with the clients in our mind, because otherwise we struggle to see how we will be able to deliver positive performance over the coming years.
Just as a reference before we start, we have organized a very large event last week on the private market segment, and over two days, we had 14,000 participants among professionals, entrepreneurs, and clients. Just as a reference, the Italian asset management industry, when it organizes a yearly event for the industry participants only, over three days, they have been able to gather the same amount of participants. We have been really enthusiastic about the results we have achieved so far. Turning to slide four, this is just simply a picture of what it means to evolve the business model, which is focused and centered on the integration between production and distribution. The distribution is a worldwide distribution, mainly through proprietary channels. The asset management platform is the main product factory, is located in Luxembourg and serves the global distribution. This system of working has started many years ago.
If some of you remember back in 1993, we offered the first introduction and innovation to the Italian market with the introduction of the flexible funds. We fast-forward the company to 2004. We listed the business after a management buyout, and the main shareholder of the company has been, since then, the people that work in the business through a fiduciary trust that holds the shares for a long-term commitment that we have all signed. In 2008, we started the international expansion, which is something that started to materialize from the beginning of 2011. Another big jump has been in 2018 or 2018-19, a big regulatory change with MiFID II, and the decision to change a pricing scheme that has been valid for the last 25-plus years.
Therefore, the consequent evolution in the business model, which we are discussing these days with the inclusion of the private market. This is really the business in a nutshell of how it has been focusing on the innovation and evolution of a very sound company. If we jump to slide five, in a nutshell, you see what we have achieved in the nine months so far this year. Consistent recurring net profit above EUR 50 million in three Qs. This includes a EUR 3 million one-off effect, which is linked to the movement in the interest rate curve, which has an impact on the indemnity charges that will be paid in the future to Financial Advisors. For the third or two and a half quarters in a row, we have stood up to our promise to deliver EUR 50 million as a recurring net profit ex performance fees.
If we look at the revenue side, you see that we have jumped from EUR 473 million to EUR 550 million in terms of recurring fees. Performance fees have been contributing to the tune of EUR 112 million in the results nine months 2019. Most importantly, of the revenue margin, what we have been able to achieve is a flat Q-on-Q margin, so avoiding any concern on our capability to retain the recurring margin, so the fixed management fee component. On the right-hand side, operating cost, as I was mentioning, there is a bit of a discipline here in terms of how we're managing SG&A, which is down 2% year-on-year to EUR 147 million. The increase in the distribution cost is mainly linked to the assets evolution and the recruitment of financial advisor, which is a key component to the business. Turning to slide number six.
This is just a quick snapshot on how our earning before interest and taxes has evolved over time. Clearly, the last three quarters of the year are showing a big jump linked to the repricing exercise that we have completed. Once again, excluding performance fees, the average margin of the last two quarters are 80 basis points or 84 basis points, of which between 23 and 28 basis points is performance fees on an annualized basis. Once again, a very good and constant evolution of the margin. Moving to slide number seven, the evolution in the assets under management. We have by now overcome the target we had with the five-year business plan of EUR 50 billion. We continue to see net new money coming in 2018. We stand at EUR 3.7 billion, with Italy on an organic basis up 100% year-over-year.
Internationally, the contribution continues to be strong and diversified. Just to give you an example, we gathered slightly shy of EUR 1 billion from Brazil and around EUR 400 million from Australia, while the Middle East express a number in excess of EUR 320 million in terms of net new money. Performance-wise, clients are enjoying almost +7% net of fees. Consider that basically over the year, so in 2019, more than 98% of our clients are showing a positive performance. Slide number eight, digging a bit on the highlights. Italy, the recruitment has been quite strong with 112 new additions year to date. We still have a solid pipeline. Probably this is a demonstration that Azimut continues to be an attraction pool for people that want to work within an independent asset management player that has a very good product range.
As you have seen, we have now hired more than 900 new financial advisors since the IPO. This is a key component of our business, because through the hiring of advisors, we contribute to the growth and to the value creation that we want to achieve. As I said, in Italy, net new money is up significantly with EUR 1.4 billion year to date. Lastly, we see strong client growth despite the MiFID II impact as well as the new pricing scheme, which some may have been concerned on how we could have been able to retain or even gather new clients. Private markets, as I was saying, the event was done during last week. 14,000 entrepreneurs were interested in joining us, we continue to focus our delivery of the 15% of AUM by 2024, with EUR 2 billion due by end of 2020.
Moving to slide nine, a big snapshot on our international operation. The trends are improving both from an asset perspective as well as the contribution to the group P&L. There is a good diversification across geography with Europe and MENA accounting for 29% of the AUM, 37% or EUR 6.2 billion coming from Americas, mainly South America, and then EUR 5.7 billion coming from Asia Pacific for a total of EUR 16.7 billion. Moving to slide 10, just a bit of a snapshot of the event. 14,000 participants. Just for you to know, the biggest statistic we all watched was the fact that these participants drank almost four coffees on average. Despite this, 1,500 of the 14,000 participants registered directly. We hosted more than 200 one-to-one, and there have been at least 5,000 prospect clients that joined during the two days.
We are quite confident, moving to slide 11, that we will be able to use and exploit all the products that we have been launching so far. Just as a quick reminder, Demos 1 is a private equity fund with EUR 350 million of capacity. It's the first private equity fund with a minimum subscription of EUR 5,000. We are now live also with the Global Invest, EUR 300 million fund of fund in the private equity managed by Hamilton Lane. We are in the process of leveraging on few investment that we have done in the past. Just to name a few, Gellify and Italia 500 with the launch of the fund, which is in cooperation with the P101.
These are partnership and initiatives that will be instrumental in the future to provide a true diversification to the clients, reduce the distance between clients and the real economy, and ultimately provide positive return over the long run. One note, we are in the process by year-end of launching a very interesting product for corporates to manage their treasury reserves. This is something that we will be discussing more in detail in the future. On the right-hand side, you see where we stand in terms of fund launch and capacity. There are a number of different initiatives under structuring, which will enable us to reach EUR 2 billion by 2020. Moving to slide 13. Net performance to clients, very much in line with the industry.
We managed to reclose the gap that has been created over the summer, and we now stand in the region of 7% net of fees. For page 14, we continue to be above the industry, and we're able to deliver a nice stream of flows over the last years. Moving to slide 15. Focus on Italy, as I said, 112 FAs that have been hired so far. We do have a number of initiatives with potential candidates on the way, which will enable us to hit the target that we typically have of 100, 150 hires in a single year. Slide 16. I'll turn now to my colleague, Alessandro, for the financials.
Thank you, Gabriele. As we usually do, we go to the consolidated reclassified income statement. As usual, we start from the bottom line, the consolidated net profit, EUR 237 million, as already said, the best result ever. Two times higher compared to the ninth month of the 2018. Looking to the results and also looking to quarter-on-quarter, I think that is now the time to appreciate how it change our P&L. If we remove the effect of the performance fee, you can see how is solid our business and how is changed our P&L, and how we are able to confirm the evolution and the solid level of EUR 50 million that we told you in the past, when we met also in London.
These results also on the quarter to 2019, the EUR 50 million has been reached, even if, as already said by Gabriele, we are affected by EUR 3 million that are linked to the evolution of the interest rate curve that has been applied to the indemnity that we will be paid to the Financial Advisor. Back to the number. As you can see, total revenue increased by 28% with a variation of EUR 148 million. This thanks to the evolution of the recurring fees, EUR 77 million compared to the 2018, with an increase of variable fees of EUR 67 million and EUR 12 million more in insurance revenue. Here you can remember, as we discussed also in the last calls, this variation is also explained by the IDD effect.
To the level of the operating cost, the variation is around EUR 33 million plus 8%, mainly explained by the evolution of the distribution cost, where we have an increase of EUR 34 million. This is completely, let me say, linked to the recruitment, also in particular with the evolution of the asset under management and our growth in Italy. The increase of the recurring fee is partially it's offset by the increase of the cost of the distribution. At the level of the personal and another cost, we can see a positive variation in terms of a reduction of cost. It's around EUR 4 million. This is coming also to the restructuring that we perform in Italy. We can starting to see the first result. We are also setting the evolution of the business that we did outside Italy. Moving forward at the level of the interest income.
You can see, let's say, a positive and big number because we are EUR 12 million positive. This is the result of what we discussed also last year. If you remember, we were impacted by the market at the level of the liquidity invested by the group in our funds. The market evolution impacted negatively and also a fair value option. We completely recovered. You can see that in the quarter, there is no particular impact. At the level of the net non-operating cost, we have a variation of EUR 4 million. Here, we reclassify, obviously, the cost because it's a one-off linked to the restructuring that we perform in Italy. It's around EUR 3 million-EUR 4 million. Also EUR 1.5 million are linked to one-off of legal and professional and operating costs that we will not have in the future.
We are not going to consider it as recurring. Finally, at the level of the interest expenses, we have a slight variation of EUR 2 million around. This is just explained by the new credit line that we submit at the end of February. Moving to next slide, we are going to look to the net financial position. As you can see, we reduced our negative level of the net financial position. We are now EUR 47 million negative with EUR 30 million variation. The debt is almost in line, and we have an increase in cash and cash equivalent of this EUR 30 million. The simple reconciliation that we can perform is just simply taking the results of the quarter and then decrease the amount of EUR 16 million linked to the stamp duty and tax paid during the quarter, and EUR 20 million of acquisition to NME.
I'm going to leave to Gabriele for the other part.
Thank you very much, Alessandro. Turning to the outlook on page 20 and 21. By now, it's been the third consecutive quarter we have delivered on the transformed P&L. Recurring net profit excluding performance fees have been consistently at EUR 50 million, albeit even higher if we exclude the one-off in Q3. Italian business is showing strong signs. We continue to see a good pipeline of potential candidates that we can hire from the industry. The private market kickoff has had a very big success. Fundraising of the first two funds has already taken place. We expect an acceleration in terms of the flows coming into these funds following the event. Net performance, once again, at a positive 7% net year to date. This is the greatest response we could deliver to our financial advisors as well as our clients after a very challenging 2018.
The international business continues to grow, and to contribute to the group figures. Going forward, our focus will be mainly on the private market initiative. We confirm the target to reach EUR 2 billion by 2020. We aim to reach at least 15% of total assets by 2024, which will be the end of the forthcoming five-year business plan. We think the combination of these two short and medium targets will bring value both to our clients as well as our shareholders. Net profit is seen above EUR 300 million in 2019, and we will be further delivering targets for the foreseeable five years business plan over the next months. Continue to improve the efficiency in the core Italian business, and our focus remains to extract margins from the Italian operations. Last slide on the outlook is the private market evolution.
A quick summary of where we stand, where we want to be in three years and Sorry, in one year time and in five years time. EUR 2 billion by 2020 and more than EUR 10 billion by 2024. This is going to be done through the existing client base. We will be attracting new clients. It's been incredible to see how there is a growing interest from non-clients of Azimut into what we are deploying as strategy and product. We think that it's going to be interesting for both retail as well as institutional clients. Last slide, turning to page 22. It's just a quick summary of the business plan, which will end in 2019. We are now simply more positive on reaching, if not overcoming, the EUR 300 million net profit target in 2019. We're now available for question. Thank you.
Excuse me. This is the Chorus Call conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. The first question is for Mr. Alberto Villa of Intermonte. Please go ahead, sir.
Good afternoon. A few questions from my side. The first one is, if you can update us. Well, there was no update, so I guess this is the answer, but on the change in methodology to calculate performance fees, it's pretty strange that you started the process nine or more months ago, and still no conclusion of it. Can we assume the new methodology will be enforced by the beginning of next year? You are still discussing with the authority, there are still potential uncertainties about the way you will calculate the performance fees into next year. The second one is a slight margin erosion for management fee we have seen in the third quarter. I was wondering if there are specific reasons and maybe, I don't know, product mix more skewed towards low-risk products and so on.
I wanted to understand if you have indications about the margins on management fee going forward. The third question is on cost. We have seen a significant reduction of personnel and SG&A in the third quarter. I was wondering if there were also seasonal effects. What is the new normal that we can assume for the coming quarters in terms of costs? The last one, if I may, is on the hiring. You mentioned 112 additions this year and still a strong pipeline. Can you give us any indications about how is the cost of hiring? We have had comments about quite aggressive cost of recruitment on the market, so I wanted to understand what's the position of Azimut on that, and if you can give us an idea of what is the mix between organic and recruitment net inflows in the first nine months of this year.
Thank you.
Thank you. Okay. Change of methodology. Unfortunately, we stopped being surprised by timing in terms of feedback from the regulators. However, besides this, we think that the methodology has been consolidated by the regulators. Actually, we have received an informal approval from the CSSF in Luxembourg. It's just a matter of obtaining the visa on the prospectus, which includes a number of different amendments, including the performance fee methodology. Honestly, we are very, very positive and quiet about this simply because we don't see any further delay in the approval. We still expect to implement the new pricing from 1st of January 2020. It's just a matter of receiving the visa from the Luxembourg regulator. Slight margin erosion in Q3.
Honestly, if the margin erosion refers to the one basis point erosion, I would love to actually speak in detail about the one basis point erosion Q on Q. On the contrary, I think we had quite an interesting summer, whether you were living in Italy or in the U.K., from a political point of view, and with the potential volatility that this has created. We were a bit more conservative going into the summer, going into the month of August. This probably may partly explain the one basis point Q on Q erosion. On cost, we have implemented, as you have been aware, some actions in Italy in terms of cost containment and reduction with the reorganization that was done at the beginning of the year in the head office. This has obviously produced some results.
Negative because we have one-off, positive over time from two perspective. Over time, you have a clear saving, and this has a material impact in terms of the number. The immaterial component is that people are much more focused, much more committed than ever at every level, and depending on the task that they have to perform. The group is incredibly solid, and we all look to achieve our targets, whether these are short, medium, or long-term. Over time, we expect, at least for Q3, you can say it's typically a low-cost quarter relatively to, let me say, first quarter and fourth quarter of every year. You might see a slight uptick Q4 versus Q3. Overall, we will be looking to maintain the quarterly average of 2019 in the region of EUR 50 million.
On the hiring, yes, we have hired some good number of people so far this year. We do expect to be able to hire 120 or more advisors before year-end. The cost of this recruitment continues to be in the region of 2.5%, can be slightly lower or slightly higher depending on the profile of the candidate, the speed at which he's able to move the portfolio, as well as the profitability of the portfolio itself. In terms of the split of inflows year to date, is 50% organic and 50% coming from recruitment.
Okay, thank you very much.
Not clear.
The next question is from Filippo Prini of Kepler. Please go ahead.
Yes, good afternoon. Three brief questions, if I may. The first one, could you give us an update on the inflows that you will expect for the month of October? Second is on performance fee, performance fee that could be possibly generated abroad. Should we expect something from the assets abroad, notably in Brazil, that last year had been quite generous in the second quarter in performance fee delivery? The last one is on costs. If you can get back to your explanation on the previous question on costs. What should we expect for the operating costs for 2020 versus 2019? Thank you.
Update on October flows. We are still in the process of finalizing the numbers, as you know, because we have numbers coming from 17 different countries. We need a couple of days to be able to consolidate the group figure. We do expect positive flows from Italy as well as from the international business. We are looking at a number that is at least in line with what we have achieved in September. Performance fees coming from the international business. I would wait the 31st of December before I will be willing to disclose any figure, especially bearing in mind what happened in 2018 in the last two and a half months. Honestly, I don't know if it's worthwhile discussing now. We do see some performance fees coming from the international business, especially from some regions. We do have performance fees on the Italian funds.
Once again, it's probably better to wait and see how the year will be shaping up. Cost for 2020. It's not that I want to avoid the question, but the thing is, we are in a situation today in which despite a very strong growth of the business, we have contained cost. This has been a clear message that we sent out at the beginning of this year, because we believed we had room to recover some efficiency with simple but immediate actions. We are seeing the benefit of this even after just few quarters.
Going forward, we do have in our mind to be able to continue to address the cost in a proactive manner, meaning there is probably the potential, as we have discussed during the Investor Day in London, to contain some of the fixed cost and then act on the variable component that is implicit in all the cost line that we have. Over the medium to long run, 3-5 years, we will be willing to recover some efficiency, which can then be either saved, and therefore it goes to the bottom line, or it will be financing the investment that we will be making, and we will continue to make in the business, whether it's from an operational perspective or because we will be willing to invest in M&A transactions.
Okay, thank you.
My pleasure.
The next question is from Elena Perini of Banca IMI. Please go ahead, madam.
Yes. Good afternoon. I've got two questions. The first one is about your distribution costs. I was wondering about the level we could expect for the fourth quarter. I was thinking about EUR 100 million level, I was wondering whether this could be considered as the new normal on a quarterly basis, reaching around EUR 400 million for next year. The second question is about the level of performance fees you have recorded in October, if you can provide us or give us some flavor about it. Thank you.
Okay. On the distribution cost, we have achieved EUR 93 million in Q1, EUR 93 million in Q2, and EUR 97 million in Q3. In Q3, as we mentioned, we had the one-off effect, we should be probably landing in the region of EUR 94 million. I would be surprised to see a level close to EUR 100 million. I would be very surprised. It would mean that potentially we will have an incredible hiring phase. In any case, even if this will happen, you will not see it in Q4 immediately as a cost impact. Honestly, I would stay below the EUR 100 million mark. Probably this is the best guideline I will be able to give you and to provide you now. As far as performance fees in October, it's a single-digit figure. Nothing so meaningful to be worth mentioning.
Consider we have a bit more upside on during the month of November if markets continue to be as benign as they have been.
Okay. Thank you very much.
The next question is from Federico Braga of UBS. Please go ahead, sir.
Yes, good afternoon, everyone. Thanks for taking my questions. Two question, actually. The first one is again on the new performance fee methodology. I was wondering if you could give us now a little bit more color and detail on the actual benchmarks and that you will apply based on different asset classes. If you could give us a little bit more detail in terms of numbers there to understand how easy or difficult could be for you to generate performance fees from next year onwards. The second question is on the new clients that you reported year to date, the 11,000 new clients that you reported on the slide. I was wondering if you could give us an idea about how much of this was driven by new clients brought by recruited advisors rather than new clients brought into the company by existing advisors.
If I do a rough number, even assuming 100 clients average per new recruited advisor, you would end up around the 11,000 clients that you reported. I was wondering if you could give us a little bit more color here. Thank you.
Okay. As far as the new performance fee methodology, vis-a-vis what we mentioned at the very, very beginning when we started the discussion and the disclosure on the topic, we did not have to change the underlying assumption of the new methodology. It means that the new methodology is very in line with what we have on our Italian fund range. What the Bank of Italy approved back in 2005, was simply transposed into the Luxembourg funds, including the back testing and the confirmation of that back testing that was hinting at a 50 basis point on average repricing in terms of recurring fees. The benchmark Sorry, the performance fee runs on a yearly observation, so we will have to wait and be patient during the year before we can have concrete performance fee, which will be booked in Q4.
The spread over the benchmark depends on the type of funds, and can range from as low as 200 basis up to 400 basis. If you want, you can take it really as a reference, the Italian fund range. As far as the new clients are concerned, this has been a priority since the very beginning of the year. The reason is very simple. In 2018, we were less inclined to go out and make new clients, as far as our Financial Advisors are concerned, simply because when market turn quite negative, it's harder to convince clients to come on board.
The transformation of the fund range and the restructuring of certain products that is under completion now has improved or re-established the trust between distribution and production that is typical of our distribution system. To that extent, existing and new advisors have been able to generate new clients. If I have to give you a rough indication, probably existing advisors are responsible for one third of the new clients.
Thank you.
We have a follow-up question from Mr. Alberto Villa of Intermonte. Please go ahead, sir.
Yes, thank you. It's just a question on the decision to issue this bond, which is pretty big in terms of size. Given that you currently have a very small financial debt, your business model is cash generative and so on, can you give us an indication why you decided to go for this issuance? Is that because of the market opportunity? How we can figure out you will use these proceeds going forward, given that you already have around half a billion EUR of cash in your books. How you are imagining to deploy the proceeds, apart from the reimbursement of part of the debt of this new bond? Thank you.
Thank you, Alberto. Yes, you summarized in a nutshell our thinking behind the bond. Basically, we have always tried to manage the capital in an efficient way. In the past, we did a couple of bonds, whether convertible or senior. In this situation, we are simply exploiting the low interest rate environment, which we can probably benefit from by reducing the cost of debt. We want to use part of the proceeds to reimburse the credit line we took out in the beginning of the year. Most importantly, we are envisaging the use of this excess cash as financing the growth of the business over the coming five years. The idea has been to increase the duration of our debt, try to reduce as much as we can the cost, and not being in need of divesting some of the investments in which we are in.
The business can work with this level of debt in a very efficient way. We do think, and we do confirm that with the recurrent fee component that we can deliver, we will be able to manage a higher debt exposure that we currently have. Let's see how the roadshow goes, and then we will certainly communicate to you the details.
Thank you.
My pleasure.
The next question is from Hubert Lam of Bank of America. Please go ahead.
Hi. Good afternoon. Most of my questions have been asked. Just one question on the dividend. Last year, you had a dividend of one and a half. This year, your earnings are much higher than last year. Should we think about the dividend at least being maintained to be the same as last year? How should we think about the dividend policy for this year? Thank you.
I was actually expecting a question on the dividend, given that we are approaching the end of the year. We're delivering a good level of profit. Listen, it's probably still early to provide a strong guidance on the final dividend that we will be paying in 2020 based on 2019 net profit. Our reasoning is, once again, very simple. We want to provide good remuneration to shareholders. Remember that this year, we paid a higher dividend than what most expected, simply because we were anticipating part of the profit that we were generating in 2019. In a way, you can expect that a component of what we paid back on 2018 numbers is recurrent. Whereas another element should be considered as an anticipation of the payout, which we will have delivered to investors on 2019 numbers.
Let's see how the year closes, as well as we have a good element of performance fees still to be able to cash in. We do want to have our hands free when it comes to finance the growth and the acquisition that we can potentially target. Putting everything in the context, we do expect to remunerate shareholders in a proper way. However, take into consideration all these other aspects that I just mentioned.
Okay. Sorry, if you don't mind me asking another question on the use of cash after this fundraising that you're going to be imminently doing. Are you also looking at M&A? I guess there hasn't been as much M&A this year as there's been in previous years. Is this something you're still closely considering? Is it mainly on the distribution side and manufacturing? What are your thoughts on potential use of the cash that you could be getting? Thank you.
Okay. The ideal scenario would be a scenario in which we could have a very interesting target that will enable us to increase our distribution capacity in Italy to a great tune, maintaining the cost base of the business as is. Unfortunately, nothing of this is real for the time being, at least in Italy. We do see some potential acquisition in some international markets. We expect to be able to announce something in the short term related to a greenfield project that we have been studying for quite some time. There are a couple of other things that potentially could materialize between now and the next, say, three, four months.
For any further questions, please press star and one on your touch-tone telephone. We have a follow-up question from Ms. Elena Perini of Banca IMI. Please go ahead.
Yes. Sorry. I have two other questions. The first one is on the minorities, which are lower than last year. I imagine that this is due, not to a worsening of profitability for foreign countries, but due to the fact that you are increasing your stake due to the put and call agreements that you had on these acquisitions. Can you confirm it? The second question is on your extremely low tax rate, which was approximately 6% in the quarter. I was wondering if you can give us any medium long-term guidance on your taxation. Thank you.
Okay. Minorities. We had EUR 3.5 million of minorities in Q3, EUR 3.4 million in Q2, and EUR 3.7 million in Q1 2019. Q3 2018, EUR 3.5 million of minorities. Honestly, I don't see a big variation in terms of the level of minorities. If you compare nine months 2018 vis-a-vis nine months 2019, what you have to consider is that in Q2 2018, because in Brazil they cash in performance fees twice a year, in June and December, you have to consider that element when it comes to the minority component. As far as the tax rate is concerned, it has been a quarter in which obviously you estimate taxes. There might be some year-end adjustment when it comes to the final full-year tax rate. In any case, we do see our long-term tax rate or medium-term tax rate always in the region of 15%.
Some years and some quarters, we have been below that. Some years we've been in line. We prefer to maintain this as the long-term guidance for the tax rate.
Okay. Thank you very much.
Mr. Blei, at this time, there are no questions registered, sir.
Okay. Thank you very much. If you have any further follow-up, please don't hesitate to ask. Have a very good day. Bye-bye.