Earnings Call: Q2 2020

Jul 23, 2020

Welcome to Grupo Rotoplast Second Quarter 2020 Results Conference Call. Please note that today's call is being recorded and all participants are currently in listen only mode to prevent background noise. Today's discussion contains forward looking statements. These statements are based on the environment as we currently see it and as such there may be certain risk and uncertainty associated with such statements. Please refer to our press release for more information on the specific risk factors that could cause actual results to differ materially. The Company disclaims any intention or obligation to update or revise any forward looking statements, whether as a result of new information, further events or otherwise. Please allow me to remind you that the company issued its earnings press release yesterday after market closed. It can be found in the Investors section of its website. Also, the presentation for the call and the webcast link are in the Investors section. Today's call will be hosted by Mr. Carlos Rojas Abumbrad, Chief Executive Officer and Mario Romero, Chief Financial Officer. I will now turn the call over to Mr. Carlos Rojas. Thank you. Good morning. Thank you for being with us today. I hope you and your loved ones are safe as we continue to chart our way out of the current crisis and into the future recovery. It is clear that the COVID-nineteen pandemic has become major catalysts for change in our societies. The pandemic has brought about profound health and economic challenges across the globe, and the response to them is still evolving. However, these challenges have reassured us of our purpose, and we are thankful for the opportunity to continue serving and helping others. Throughout this crisis, we have focused on the well-being of our team members and our communities, as well as on providing support to our suppliers, distributors and the technicians that sell and install our products. Not only do we continue to provide much needed water solutions to our clients, but we are doing so while protecting the health and safety of our people by strictly adhering to all local regulations and the World Health Organization guidelines. And as we head into the new normal, we are working towards defining the protocols and workplace practices that will best enable us to ensure that our people stay healthy and safe in the later stages of the pandemic and into the future. We have also donated water purification solutions to hospitals that can purify over 3,000,000 liters of water yearly, storage solutions that can store over 1,000,000 liters in vulnerable communities, and we have installed over a 1000 hand washing stations in key locations across countries we operate in. In fact, we have made available the prototypes and operating manuals of these hand washing stations, so that any interested party, anywhere in the world, can replicate the effort and help fight the spread of the virus and overall public hygiene. In the same vein, we used our Plummer loyalty program, which now has over 7,800 members, to reach out to them and learn how we could best support them to get through the effects of the lockdown. As a result, we have provided them with new training opportunities, new communication channels, and material and logistical support when needed. Our Company's commitment to providing more and better water to our customers and our communities is now more relevant than ever, as it is our responsibility to promote sustainable development and protect the environment, effectively increasing our stakeholders' resilience when facing a crisis such as the current one. Our societies are learning, changing and adapting, and Rotoplast is embracing this transformation, as it is perfectly aligned with our company's mission. It is important to remember that, as I mentioned in our last call, Proto Plus is not the same company as it used to be. Through our efforts in strengthening and streamlining key aspects of our business, we continue on the path of creating value for our shareholders, and we remain on the track even through these uncertain times. We have a resilient and diversified constantly vigilant of our operation and always exploring new opportunities. And as our quarterly results show, our efforts are paying off. I would like to highlight, for example, that our e commerce platform in the United States successive record sales in April, May June, as we managed to address the changes in habits of our customers as well as the growing demand for agroindustrial water solutions in the market, we are also transforming our business in Brazil, where we divested our underperforming assets and are now focused on developing the service platform through water treatment plants, which represent an extraordinary opportunity, which will allow us to take full advantage of our presence in one of Latin America's largest economies. At the same time, we have managed to weather the effects of lockdowns and operating disruptions in some of our Central and South American markets. Furthermore, considering our performance as lockdown restrictions were eased in some of those markets in June, we now see a very encouraging run rate in countries such as Peru and Argentina, Honduras and Nicaragua as well, evidencing that the strength of our brand and the quality of our solutions are at the top of our customer minds in the new customer landscape. Even as growth in sales in Mexico remains strong and sales of our storage solutions prove their resilience, we are seeing a rising demand for our Bevya platform that underscores its potential to become a leading purified water solution for the country. In fact, the success of both Baby and our e commerce platforms highlight the need to constantly innovate and address new customer needs and habits. We believe that loyalty with our team members, distributors, and the people who recommend and install our products is a two way street. We'll look after them and they look after us. And we extend that vision to our customers and communities, as we believe that solidarity is and will be in the times ahead will begin the times ahead. We're grateful for the opportunity to leverage our innovation and client driven ethos and to help address what has proven to be one of our most urgent challenges of our time. And as our societies chart the new way forward, we are confident we will continue to play a key role both in containing and mitigating the effects of the pandemic and building the road to recovery. Thank you for your time and attention. I will now turn over the call to Mario, so that he can go over the quarterly results in more detail. I look forward to your questions. Thank you, Charlie. Good morning, everybody. Thank you again for joining us. I hope you have been safe and healthy these past few months. As Charlie pointed out and as we mentioned in our last call, rotoplasm entered this phase of the pandemic strengthened and with a clear purpose and objectives. Even as there is still a certain level of uncertainty about the future evolution of the crisis and its full impact, we are confident that our quarterly results evidence our resilience in the face of systemic shocks and more importantly our ability to continue to serve our customers at a time when the availability and quality of water is crucial. In fact, as mentioned, even in those markets where we experience disruptions due to local pandemic restrictions, we are already seeing very positive signs as those restrictions are lifted whereas in other markets such as the United States, Central America and Mexico, we experienced significant growth throughout the period as consumer habits are changing. Residential water consumption has increased as families are spending more time at home and also industries and business are preparing for the new normal in which it is estimated that more water is going to be needed to fulfill health protocols. Providing more and better water is therefore not only our reason for being but it is also a sound business vision. In fact, in spite of the widespread economic shock associated with the pandemic, net sales grew 1% year over year during the quarter and 2% during the 1st semester. Likewise, sales of our water as a service platform grew 22% during the last quarter driven by double digit growth in treatment plants, Bevia and drinking water fountains. Moreover, we remain focused on our employees and clients' health, safety and well-being, while creating value for our shareholders. To that end, we have maintained a watchful eye on our cash through our cash flow control tower and have continued to strengthen our balance sheet which closed the quarter with a 0.6x leverage. Most importantly, we have reached a return on invested capital of 8.8%, an increase of 90 basis points year over year. As we make progress in our transformation process flow, implementing new initiatives and streamlining our operations, we continue to advance towards our goal of having a weighted average cost of capital below our ROIC by year end. The ROIC shows a decrease compared to the immediate previous quarters due to the impact on the generation of operating income from the closure of operations because of the pandemic, the recognition of expenses for implementation of flow and the readjustment of workspaces to comply with health guidance. Without the impact of the disruption or closing of operations in Peru, Argentina, El Salvador and Honduras, the ROIC will stand up at 9.6%. Now please allow to discuss some of our quarterly results in further detail. As for Mexico, our sales grew 3% during the 2nd quarter and 7% during the 1st semester due to a solid and resilient demand for our storage solutions and to the prioritization of access to water for hygiene and workplace safety. In fact, as Charlie already highlighted, Vevia, our drinking water service experienced record sales throughout the quarter, proving its value and potential in a changing landscape. As of June, we doubled various installed units reaching more than 31,000 purifiers and more than doubling the 14,000 installed units as of June of last year. We also continue to innovate with Inflow's framework, introducing new storage products and strengthening our marketing efforts, including of course our plumber loyalty program but also our sales team's productivity. It is worth noting that while we registered significant growth in the sales of water fountains, government sales as a percentage of total revenue remain well under our 10% target amounting to 2.8% during the Q2. We are also seeing very little correlation between our sales and the construction industry trends, which are both signs of the success of the diversification that anchors our resilience. Furthermore, as we have already mentioned, our e commerce platform in the United States has had 3 consecutive record breaking months, evidencing that it is the perfect channel to reach and serve our customers in the new normal in that country. Sales in Central America also increased by double digits. In spite of the lockdown measures and the disruptions to our operations, thanks to the optimization of our sales force productivity and the incorporation of new products to our portfolio in the region. This growth compensated the losses sustaining Peru and Argentina, El Salvador and Honduras, which amounted to COP275,000,000 as we face restrictions that severely impacted our operations in those countries as I will explain next. Net sales in Argentina totaled MXN322 1,000,000 for the quarter, but we estimate that the disruptions to our operations, which were limited or stopped for 33 days in the semester reduced our sales by MXN 125,000,000. However, as Charlie pointed out, we are seeing a really positive run rate in JUUNS as restrictions have been eased with sales growing double digit in local currency and exports increasing 81%. Sales in Peru decreased significantly due to the lockdown measures implemented in the country which closed down our operations for 81 days, negatively affecting sales by an estimated MXN 139 1,000,000. However, following the reopening in June, we are already seeing a solid recovery trend, increasing sales double digit across all business lines. The intermittent closures of our distribution centers in Honduras and El Salvador had an estimated negative impact on sales of MXN 11,000,000 for the quarter. Our operations in Guatemala, Costa Rica and Nicaragua continued throughout the quarter without interruption. And finally, the divestment of our product unit in Brazil on May 1 netted us COP 134,000,000 and will significantly contribute to our ROIC while enabling us to strengthen the presence of our water as a service platform in that key market for our treatment and recycling plants. In terms of our portfolio mix, sales of products during the quarter accounted for 92% of total sales. Testing to the growing strength of our water as a service platform and we entered the new social and economic landscape brought about by the pandemic. Regarding our P and L results, it is worth pointing out that our quarterly operating profit totaled MXN 178,000,000 and MXN 4 56,000,000 in the 1st semester. These results are 32% 17% lower than those of 2019 due to the operating restrictions I discussed before with reduced cost and expense absorption. We estimate that the impact of these restrictions in Argentina, Central America and Peru amounted to COP67 1,000,000 during the Q2 and COP79 1,000,000 during the 1st semester. We also have to undertake additional expenses to recondition our plants and offices in order to fully implement the relevant workplace safety protocols, which amounted to COP 7,000,000. Additionally, we made one time expenses totaling MXN21 1,000,000 related to the implementation on flow and we invested heavily in advertising compliance to promote Vebya. Our quarterly adjusted EBITDA totaled COP294,000,000, 13% reduction year over year due to the operating restrictions that I have already discussed, which affected the result by an estimated MXN 83,000,000. Finally, we've reduced our quarterly net loss of MXN 59,000,000 before accounting for discontinued operations. This is a result of the decrease in our operating profits due to the lockdown disruptions as well as FX losses on our dollar denominated positions and accounts receivable in local currency, totaling MXN 99,000,000 for this effect. We also faced higher interest expenses and a negative effect of MXN 16,000,000 for our monetary position in Argentina. However, net income still increased 87% in the 1st semester. Furthermore, the gains in derivatives and FX positions in the Q1 compensated for the FX losses in the 2nd quarter. In regard to the strength of our balance sheet, as I have already mentioned, our net debt to EBITDA ratio is 0.6x, well below our 2x ratio policy. During the quarter, we took a COP 65,000,000 or Ps. 10,000,000 loan from the government in Peru, which is meant to help alleviate the pressure caused by the total lockdown. The loan has a 12 month grace period. It yields 1.46 percent annual interest rate and it is under a 3 year tenure. Apart from the loan, our debt position also considers a sustainable bond of ARS172X, which as we discussed in our last call net MXN 4,000,000,000 has a maturity date of June 16, 2027 and was issued at an 8.67 percent fixed rate in Mexican pesos. It is important to note as well that we have decreased the cash conversion cycle by 16 days driven by an improvement in accounts receivable and a decrease in inventories. This is a direct result of the negotiation of better terms with clients, an initiative that originated within the flow program and is closely monitored by the weekly cash control tower. CapEx remains at 7% of total sales which we believe to be a very sustainable level. 33% of that CapEx is allocated to water treatment plants in Mexico and now in Brazil as we redefine our value proposition in that country. Charlie has already gone through the most important actions we have undertaken in the ESG space. I would only like to add that some of you may know, rotoplasm has been included in the S and P VMD Total Mexico ESG Index, which substitute the S and P VMD IPS Sustainable Index. The index includes 29 issuers and REITs with the best ESG performance and attest to our commitment to ensure that we are there to the highest standards in bringing more and better water to our customers and communities. We are also very proud to share with you the ESG KPI dashboard which is available on our website and details our most relevant environmental, social and government results since 20 16. The dashboard and our new sustainability management system platform will strengthen our efforts to measure and improve our ESG performance as well as our commitment to transparency and accountability in this matter. In conclusion, I'm sharing this Economist cartoon by Kevin Gallagher. It describes and as we discussed in our last call, we expect that the pandemic will have an impact across all of our major markets. However, we also expected that our strong balance sheet and the flexibility that will allow us to continue serving our clients and to strengthen our water as a service platform, all the while ensuring the well-being of our people. As Charlie pointed before, we are now beginning to realize the scope of the social and economic changes brought about by the crisis. And even as we are still dealing with its dire effects, we are already thinking about the way forward as well. Our business model has proven resiliency. And we have managed to reach out and support our stakeholders during these challenging times while continuing to advance towards our value creation goals. We will continue ahead in this path relying on our capacity for innovation and our adaptability and we will continue to keep you informed of any relevant events as we have been doing to date. We are confident that our societies adjust to the new realities in front of us. Our company will play a key and increased role in helping our customers address their water needs. Thank you for your time. Now we will move to any answer follow-up with questions you may have. We have the first question from David Seaman. Can you please share earnings per customer behavior in Bevyag given your survey result of 40% of consumers being open to filters. Is that a worrying statistic? It's actually positive that people in Mexico, where we are currently offering Bevia are willing to move from bottled water to purified water. The reason we came up with the Bevy as water as a service or purification purified water as a service was that there were lots of pain points in the customer journey for purchasing, installing and servicing a water filter at home. So we decided to do that same model where we are responsible from end to end service. And so we're actually seeing tremendous growth in interest for Bevia. It is still very new. There's still a lot of work to do in terms of brand awareness and service awareness. But we're seeing great opportunity to increase investment in marketing efforts to continue to grow new subscribers per month. And that has just to give you an idea, June growth of new subscribers per month grew around 200% as compared to June of last year. So it's going very well. We have another question from Regina Carrillo. Hi. Is there any guidance you can give us for the second half? Hi, Regina. How are you? Good morning. Thanks for joining. At this point, we are not giving any guidance given the such volatile environment that we are living. As explained during the call and the press release, The good news is that the company is having a strong demand for most of their products and services. The things that we cannot control are like the lockdowns like the ones we saw for in Argentina and Peru and parts of Central America which has explained it really affects our profitability levels. Because as a company we have decided to keep the whole team, employees and staff in place. So having said that and as mentioned during the call, in June, we saw a very impressive month. Just to give you an idea of magnitude, sales were 50% higher than in April where all the countries were open. And if the second half is to remain the same as June where all the countries are open, then we'll have a better second half than the first half. But again, there are too many variables out there moving day by day. We are doing our best efforts to work them out. Our strong cash position, the good demand that our products and services is showing in such an environment proves that we have a very resilient portfolio. So if things play well, you might see a better second half than the first half. The next question is from Rodrigo Salazar. I have actually three questions. I will start with the first one. Could you elaborate more on the $20,000,000 expense on flow? What impact did you saw on Mexico products due to a pandemic? And if that's why we saw a more pressured margin? [SPEAKER JEAN PIERRE CLAMADIEU:] Did you want to finish with the questions, Marina? Sure. And also, if you could explain a bit more on the U. S. Dynamics, how are you seeing it behaving in the coming quarters? And if you are planning on reporting separately on the future? Hi, Rodrigo. I'll answer first part of your questions and then Mario will complement. The 20,000,000 peso expense on flow, I'll allow for Mario to explain in further detail on how we're registering this. In terms of Mexico, most of our solutions are much more related to water needs, and those performed very strongly. There's a few products such as piping, which were affected in part by the construction industry in Mexico. The construction industry in Mexico had an important reduction during the 1st semester, and so that did pressure margins partially in Mexico. Also part of our solutions service places of work, such as offices, where we did see also a reduction in demand as a consequence of people staying at home and not going to the office to work. In terms of the U. S, we do see that there's great opportunity to continue to transform the traditional purchase habits from people going to a physical store to purchasing more online. So we do see great possibilities to continue to transform the business model from purchases at physical stores to doing more remotely, where we are the leaders in terms of e commerce for this line of products in the U. S. Today, it is not large enough for us to report separately, but we do hope that it will be the case in the future. Mario, would you like to answer the ARS20 1,000,000 allocation for the Sure, Charlie. Thanks Rodrigo for joining us in the call today. Just to complement on the U. S, a couple of things. U. S. Was close to be the 2nd largest market of rhodoplasts in the 2nd quarter. Probably, it's going to be the next year's case that we will need to report to U. S. Because of the magnitude and IFRS compliance. As for the flow expense, as you all know or most of you know, the company is running a transformation program named Hello. We have studied 14 different companies that have run similar programs in the past, all of them public companies. And 75% of those companies have presented these one timers every quarter to give transparency and make it a comparable base to investors and analysts. We will be presenting in the coming quarters the same information of the flow program And these one timers are mostly one offs that the company is deciding to do or consultancy fees which are paid because of the program. I will probably go with Alan James' question. Thanks for joining us. We actually paid a dividend on May of $0.80 per share. So for the remainder of the year, there's no plans for additional dividends. So that answers to your question. Mariana, would you like to read Liana's question, please? Yes. Could you please give us more color behind EBITDA in services? With that Growth in sales, it seems that it was not enough to improve profitability. Is there something particular this quarter or maybe the mix or vega related expenses that have affected EBITDA growth? I will allow for Mario to respond in a little bit more technical terms, But I would mention that Bevia and Citesa require quite a bit of investment to generate growth. Bevia, the way it grew, since we take the entire customer acquisition cost and the cost of the product and installation as a cost in period 0 when we install a new customer. And it takes a little bit of time to get a return on that investment. The quicker we grow, the higher the impact negative impact on the EBITDA. So it's a little bit counterintuitive, but it's actually a reflection of this negative impact in EBITDA. It's a reflection of the positive trend on Baby's growth. In terms of unit economics, we're not disclosing the details, but I can tell you that it offers positive return and way over our weighted average cost of capital. So we're very happy to be growing this business unit as aggressively as possible. Santiago, Elion is asking, could you give us more color on your service segment? Just a second. I don't know whether Matti want to complement something. I was just complementing Charlie's answer. As Charlie mentioned, we believe it is a time to think and go big after Bevia. So we're making a lot of commercial and marketing efforts to push that business. 2nd, as we mentioned, we divest the products division in Brazil, but we kept a team in Brazil which is building the Citesa business. That business in Brazil is burning cash today because they're building the water treatment plants as we speak. So both of those are dragging on Citesa's Mexico's EBITDA. So that is why profitability in services is not there. But as our CEO mentioned, we're very confident on the IRR returns on a unit economic basis And these are bold moves of the company's future and its investment and expenses are being allocated to that. Santiago Elion is asking, could you give us more color on your Service segment? What do you expect going forward? And do you expect the EBITDA margin will be after the pandemic? Regarding development and water treatment plants, could you give us an update on that? How many plants do you expect to have at the end of the year? Again, I'll answer on general terms and Mehdi will complement with the details. But in terms of wastewater treatment plants for Mexico, we have seen a slowdown on investments in industrial projects or large construction projects, which impact the demand for new plants. It's not that it has been reduced indefinitely, but some projects are taking longer to materialize. So our time from prospect to execution is taking a little bit longer. In terms of projected margins where we can take into account the investments we do to grow these services in a longer period of time, they will continue to get stronger as we get higher levels of revenues. Mario, would you like to comment in more detail in terms of numbers? Sure. Thanks, Santiago, for joining us and for your good questions. Before COVID and with the transformation program we have spoke about in place, we were aiming to reach EBITDA margins in the neighborhood of 20% on the year. As you know, this pandemic changed everything and our different business segments have been affected and countries as well. So the target is still there. Once we are over this health crisis, we believe that the normalcy of growth and margins should be there as well as ROIC. Just something additional to wastewater treatment plants. We are seeing a very strong demand in Brazil. There seems to be more interest in investment in Brazil today, which is very exciting for us to be participating in. And then if I may to Rodrigo's question. Just quick thing regarding that. It's related to the projection to the guidelines for the second half of the year. There's tremendous uncertainty. If it's not for that uncertainty, we could say that we would be getting very close to that rate being equal to WACC, which we mentioned at the beginning of the year as a target. But there's lots of variables that are in play today. So in normalized terms we would be very confident that we will be getting there. The plan that we have today is very it continues to be a relevant plan considering how the world is shifting, how the world is evolving with the pandemic. So we're very happy to have a very strong detailed plan with very detailed initiatives, each initiative having owners, every initiative having milestones with milestone owners, all of these milestones and initiatives with very clear due dates. And we're making very good progress with this transformation of flow, which is the main driver to get us to have a ROIC above WACC. It's just a matter of when it will be reflected. If it is the case that one of the unforeseen variables impacts this in a short term. Mario, anything that you'd like to complement? Yes. And to that, we have different we have 3 scenarios going on inside the company. Good news is that independent of any of the 3 scenarios that we are running as of today, none of them take us out from our medium and long term strategy. The company is very well funded. Debt maturity is until 2027. The growth path is clear. So probably 2020 will be kind of a bridge year but medium and long term strategy is intact and we feel confident on that. So, I don't know if there's any other questions. We'll give a few seconds. Thank you very much. Mariana, will you help us with the final comments? Thank you very much, everybody. We hope you will join us again next quarter. Until then, we'll be sure to keep you updated of any relevant news as they happen. There's one more question, Mariana, from David. If you want to read it just before? Yes. Thank you, David. A few cash flow questions. Is there a mix effect that explains the source of working capital gains? What are there for gains in inventory? You mentioned higher investments in Zitesa, yet CapEx is lower year on year. Are you deferring maintenance spend? Thank you. Matti, would you like to comment? Yes. Thanks, David. Well, I'll go from to TESSA what part of the transformation we are being more helpful on maintenance CapEx. We are managing that on a weekly basis. We are asking people to present business cases. And this is part of the transformation that we are running. What has happened is that we're getting better at making maintenance CapEx decision and you can see the CapEx trend sequentially how that is moving. And that is good and that is explained by Phil. On your working capital days, is there a mix effect that explains that? Well, one thing is that we are working closely with our clients and accounts receivables are getting lower. Inventory, it's a little bit tricky because of all these volatility that we are experiencing in 14 different countries. We do have a very interesting initiative going on as part of the transformation to do better inventory management. So some gains will be obtained from these, but I think those will be really bankable once the situation gets more normal because as mentioned one of the previous questions from Regina, just by looking April June and a different sales of 50%, imagine the adaptability that the supply chain needs to handle with such swings. So, once we get into a more normalized level, I think those gains in inventory will be reached. There's another question from Jose Cebeda. Hello, Charlie and Mario, congrats on the results. And I have one quick question. We have seen a fast reduction in the mobility restrictions at last time. This makes you believe that the 3rd quarter report could be could have a low recovery that we have seen during the end of the second quarter? [SPEAKER CARLOS ALBERTO PEREIRA DE OLIVEIRA:] Hi, Pepe. Thanks for your question. Not necessarily. The biggest restriction was when we couldn't operate at all. This was the case for a few countries in Central America, for Peru, for Argentina, for periods of time. It will benefit the business if construction picks up a little bit, but again, the products haven't shown to be as strongly correlated to construction, just a few of them. But in terms of water solutions, people are actually finding that if they need a water solution, they won't wait. They want it now. And Rotoplast has figured out ways by being very agile, very flexible to service those needs. And what we do see is that people will continue to be very conscious about their availability of water and the quality of that water, and they will continue to transform their habits and their demand for our products. So that will continue to be a trend. But rotoplasm has been very, very agile in adapting to whatever the new normal is. And we've already seen a very strong June. I think we can continue to see months similar to June with the increase or the development of the business as a consequence of the evolution that we're having through the transformation of flow. Anything that you'd like to add additional to that, Mario? I think you got it right. If there are not massive lockdowns like the one suffer in Q2, we might see a good Q3 because demand there, water needs are there. But again, that Charlie, we don't know. Mario, just there's one last one from Liliana regarding CapEx for Vebea. Can you explain a little bit better the technicality on how we register for product installation? There is no CapEx in Bevia. There is but it's only for the institutional products, the ones that go into large, large places such as offices and hospitals and hotels. But for the residential, it goes everything flows into expense. In the moment that it's serviced? And in terms of geographical expansion targets, I guess what we'd like to share is that there will be some resource allocation to service demand in wastewater treatment plants in Brazil, but won't be necessarily the most relevant moving forward. Strategically, we are focusing on capital allocation more towards North America. That will be the main focus of capital allocation moving forward. Thank you, Liliana. And thanks everyone for connecting now on this occasion via Zoom. I think it went very well in terms of logistical terms. Mariana, please, I think we're ready to now move to the final statement. Perfect. Well, thank you everybody for joining us and see you next quarter. Thank you very much for your time and interest. Have a very good day. Danny, could you please end the meeting? Thank you.