Earnings Call: Q1 2016

Apr 28, 2016

Welcome to the America Movil First Quarter Conference Call and Webcast. My name is Stephanie, and I will be your operator for today. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session. I would now like to turn the conference over to your host for today, Ms. Daniel D'Aleucuana, Investor Relations Officer. Please proceed. Thank you. Good morning, everyone. Thank you for joining us this morning to discuss our Q1 results. We have on the line Mr. Daniel Hajj, Chief Executive Officer Mr. Carlos Garcia Moreno, Chief Financial Officer Mr. Oscar Bonjauske, Chief Operating Officer and also Mr. Carlos Robles, Chief Financial Officer of Cellmix. Daniel? Yes. Good morning. Welcome to America Movil First Quarter of 2016 Financial and Operating Results. Carlos is going to make a summary of the results. Carlos? Thank you, Maria. Good morning, everyone. On the Q1 marked, it was the beginning of the year for capital markets in general and for emerging markets in particular with renewed concerns about the sustainability of growth in China impacting commodity prices across the board. Oil prices were under severe pressure, reaching in net February the lowest level in at least 12 years. The depreciated sharply in the 1st months of the quarter, dragged down by oil prices. Finsibility in Mexico and other countries was very high throughout the quarter, making it difficult to manage the sale of dollar based products such as handsets. As part of this, economic activity was rather stable throughout the region with the major exception being Brazil. In March, fixed line RGUs reached 81,000,000, up 3.8% from a year before, while wireless subscribers were down 2% to 284,000,000. During the quarter, we added 729,000 postpaid subs with Brazil and Mexico accounting for just over 200,000 postpaid net adds each one and Colombia 69,000. Our contract base was up 6.2% year on year. Our prepaid subscriber base declined 4.1% year on year, following disconnection of 2,400,000 clients in the Q1, including 908,000 in Brazil, 700,000 in Colombia. On the fixed line platform, fixed broadband access lines led the way, increasing 9.3% from the prior year with both pay TV and voice accesses expanding between 1% 2% year on year. Our revenues totaled MXN 223,000,000,000 in the Q1, 1.4% more than the year before, with service revenues increasing 0.3% in Mexican peso terms and declining 1.1% at constant exchange rates. Fixed broadband and pay TV revenues were the main drivers of revenue growth, increasing 7.9% and 5.9% year on year as mobile data revenues decelerated, particularly in Mexico and Brazil. Mobile voice revenues were impacted by sharp reductions in interconnection rates in Peru, Colombia, Brazil and Chile. They averaged about 30% overall and also by stronger competition in some markets, especially Mexico. Central America continued to outperform all regions, posting 5.9% service revenue growth at constant exchange rates, followed by the South American block. EBITDA came in at ARS 52,000,000,000, down 9.6% from the year earlier quarter in peso terms and 8.8% at constant exchange rate. It was equivalent to 27.7 percent of total revenues. Operating profits fell 25% in peso terms, reflecting both the EBITDA reduction and the 10% increase in depreciation and amortization charges, an increase that for the most part reflected the amortization of goodwill basically intangible assets related to the acquisition of our stake in Telecom Austria. Our comprehensive financing costs amounted to ARS 21,000,000,000, 14.5% less than the year before, with net interest payments of ARS 6,900,000,000. Whereas our foreign exchange losses totaled ARS 1,800,000,000, all the financial expenses reached MXN 12,000,000. We obtained a net profit of MXN 4,800,000,000 in the quarter, equivalent to MXN 7 per share and $0.08 per ABR. Our net debt totaled ARS 5,780,000,000 in March, down from ARS 582,000,000,000 in December. It was equivalent to 2x last of months EBITDA. In flow terms, our net debt was reduced by ARS 14,000,000,000 with growth debt falling by ARS 23,000,000,000. Our capital expenditures, which included MXN 3,600,000,000 in spectrum purchases, most of them in Mexico, amounted to MXN 26,000,000,000 and shareholder distributions, but mostly share buybacks to MXN 2,800,000,000 in the quarter. With that, I would like to give the floor back to Daniel so that we can begin the Q and A session. Thank you. Thank you, Carlos. We can start with the Q and A. And your first question comes from the line of Daniel Federle from Credit Suisse. You may proceed. Okay. Good morning. Thank you very much for taking my question. My first question is related to the deceleration in the top line in EBITDA in Mexico. I'd like to understand if you could help us to quantify how much was the impact of the calendar effect and how much is increasing competition and the more competitive or attractive plans we implemented in the quarter, which was the reason for the deceleration? And the second question is related to CapEx. You see that the CapEx in the first quarter declining 26% year over year in U. S. Dollar terms. And this is an indication of lower CapEx in this year, Hestan? Thank you very much. Well, good morning. The first question in Mexico on the EBITDA. As everybody knows, we have been having new competitors since maybe 1.5, 2 years ago. They have been making their things. And I think Q4 of last year starts with big promotions and still we have this first quarter big promotions there. And what we deciding is to follow the competition. The competition has been strong. And I think the good news there is that when we get closer to the prices and the competition and the promotions, things our distribution network, our brand, they'll sell our dealers, our customer care centers and our capacity and quality are so good that people is reacting very good. So what we decide is to defend our customers as to do what we need to do in terms of pricing. And while that's hitting us in the EBITDA, other good thing is that minutes of use are growing a lot, data volumes are also growing a lot. And that means that people that are staying with us are using more and more the phone. So those are the things that are happening. I think eventually things are going to be a little bit more rational in the future. But today, the promotions that are in the market are very aggressive. So other thing that hit us in Mexico is the telecyte. We used to have tele site inside America Movil. Today, with the spin off, we're paying a render. It's more or less 1 0.5% to 2% of the EBITDA, what we are paying to in Mexico. In Mexico, what we are paying to So percentage points. So that's more or less what is hitting us. We're growing good in postpaid and well, the market is reacting good on the Telcel brand. The CapEx, the second question is on the CapEx. The CapEx is well, we said that we're going to invest a little bit less, less than last year and is what you are seeing this first quarter. Number portability also in Mexico, number portability is decreases at the end of last quarter, is starting to increase as the February March. So while the competition is tough in promotions, but the market is reacting good. Okay. Just a quick follow-up on the first question. So the calendar effect with the Easter holidays in March represented a very minor effect. That's correct? No, it's not correct. Particularly in Mexico, it's very strong. As you know, it's practically 2 or 3 business days that are taken off. And over the weekend, there's much less usage. So now the calendar effects in terms of holidays are very strong in several markets, but more importantly in Mexico. And they if you look at Easter holidays were in April last year, this year they were in March, so they were captured 100% in here. I'm not going to be an acting that's exactly what the impact that it is has very important impact, and you can see it it historically in our reports, there has been a difference in terms of when the Easter holiday takes place. There is a very significant change. But overall, that is what Daniel said. I think that we need to look at the distribution of revenues. There's on the fixed line platform, where you don't really see the seasonal effect, You see an improvement of revenues. They have been recovering, I would say, since the middle of last year. They've been trending up. And I would if the trend continues, they should be on a positive path year on year, probably as soon as next quarter. So on the fixed line side, we did not see this kind of seasonal effect. On the mobile side, you do have the seasonal effect. And as I said, I think there's a big history of evidence of when this happens, how it's affecting the revenues. But then the other thing is what Annette said. I mean, it is the case that we have had a lot of promotions in place that began towards the end of last year that have been in place also all of the full the 1st full quarter and they have had an impact. Yes, in terms of driving MOUs, for instance, MOUs, as you have seen in the report, 3 19 minutes. That's, I believe, the record. I don't think that we have ever had, I think the record before was something about 250. So we are seeing very significant increases in users that have been driven by the promotions that we have put in place. And your next question comes from the line of Richard Dina from UBS. You may proceed. Thank you very much. Good morning, everyone. Thanks for taking the question. Just two questions, if I may. Firstly, if you could perhaps compare and contrast your competitive strategy in Mexico and Peru Mobile, given that you're facing a similar situation with new competitors in both markets. In Peru, you've been pretty aggressive with discounts and subsidies to try and defend share, which has obviously impacted the margins quite significantly over the last several quarters. But in Mexico, I'm just wondering, does it make sense for you to defend share less aggressively given that you have potentially a lot more value at stake there and plus losing share in Mexico arguably helps you in the eyes of the regulator. So just wondering how you think about that kind of philosophically market share versus margin in these two markets. And then secondly, just if you could give us a quick update on fixed line local loop unbundling in Mexico, which seems to be the only major regulatory measure missing from that market. Just wondering what stage is that discussion at? Is it just a discussion about pricing at the moment? Or are there other things that might need to be resolved, which might take some time? I guess, yes, anything on the kind of road map over the next few quarters would be fantastic. Well, there's a lot of questions. Let me start with the first. I think it's totally different what is happening on Peru than what is happening on Mexico. It's not the same market. It's different competitors. It's different what is happening in Peru. What is keeping us a lot is the interconnection rates. The interconnection rates, we they reduce a lot and it's around 60 still subsidies are high. I think still subsidies are high. I think they should be more reasonable in the future, but today it's subsidies are high. In Mexico, we have not been so aggressive in subsidies. In Mexico, we are more aggressive on rates, in promotions and these promotions have some time. I don't know exactly what is the when they're going to be more reasonable, the promotions. But in terms of subsidies, we have been more careful. We are losing a little bit of market share in Mexico on the prepaid. We are in a very good position in phosphate. In phosphate, we're maintaining or gaining a little bit market share. So it's totally different. So it's different competition. Here we have AT and T and Telefonica. In Peru, we have Intel that it's a new entrance in the market and we have also Telefonica. So we cannot compare different strategies, different markets. So it's different. The other question about the unbundling on Telmex. Yes, Daniel. Basically, on December of last year, if a tail issued the final conditions for the unbundling including the tariffs. And at this moment, we are speaking with a different interested operators to be able to implement the unbundling in Mexico. And well, it is difficult to envision or to see what the effect of the unbundling would be. But just as we have been doing, what we are doing is we are further increasing the speed and the quality of our products. And therefore, within that, we are in a good position to face this new competition environment. And just to finalize on Mexico, it makes sense to we are losing some customers in prepaid, but the promotion was too aggressive. So we have to do something in the market, terms of promotion. So we are going to be aggressive in postpaid. And we have a very good net work. We have a good quality on the network, good coverage, good distribution, customer care center. There is a lot of good branding. So as we get closer in the promotions, people is reacting on favor on Telcel. So that's a very good news for us. In the other side, well, they are using people, they're using lot more data, lot more minutes, and I think it's also very good for the Mexican market. And your next question comes from the line of Michel Martin from Morgan Stanley. You may proceed. Yes, good morning. Thank you. I just wanted to see if you can elaborate a little bit more on the statement you made in your prepared remarks and also in the earnings release around the impact of the FX volatility in terms of your ability to manage the business. Did that was that reflected in some of the cost pressures that we saw? I mean, was there a material or visible impact on margins in some markets? And then the second thing is around your leverage. It's picked back up to about 2 times net debt to EBITDA. And I'm wondering if you can update us a little bit on how you're thinking about your leverage levels and also whether or not you're seeing any pressure from rating agencies to bring that down a little bit faster? Thank you. As Carlos said at the beginning of the call, there was a lot of volatility during the Q1 of this year, also the Q4 of last year Q1 of this year. And in terms of the operation, yes, it hit us a lot because you have to pay handsets, handsets are in dollars, you have to pay software, you have to pay some operating expenses are in dollar terms. So it's very difficult when you have a due date to pay some things and at what the rate is in, let's say, the Brazil or the peso, the real peso or the Colombian peso. So will change you a lot. It's difficult to budget all those things. And that's why it hits you a little bit because, let's say the dollar against the peso gets in the quarter from 70, 20 to 18, 90 and then goes down to 18 and then to 70, 60, well, but in those days, you have to do something. So it's difficult and then you have to manage that and it's going to hit you always in your results. So that's what is happening and it's depending on the country, hit you depending on the exchange rate and the volatility. So that's there's a lot of things that are denominated in dollars and you have to pay in dollars, And Carlos can talk a little bit about the The increase in the ratio, Michel, is basically the result of the decline in ARPU for the last 12 months because of the reduction that we had in this quarter. In my prepared remarks at the beginning, I mentioned that in terms of flow, we had actually reduced growth debt by MXN 23,700,000,000 and net debt by approximately MXN 1,400,000,000. So there's a lot of noise with the FX volatility, as we have pointed out. So that probably will not allow you to see all of this the reduction in net debt in terms of pesos was approximately EUR 4,000,000,000 but in loan terms was approximately EUR 14,000,000,000. So I expect that throughout the year, as we continue to reduce our debt, which is what we have said that we would be doing this year, that we will maintain the leverage ratio within the ratio that we want to keep it. And thank you. That's very helpful. And has there been any conversations with the rating agencies? Or is there any pressure as from their perspective? We have stable ratings today by S and P and by Fitch. We have a negative outlook by Moody's that came roughly at the same time that Mexico was put on credit watch as well. So there could be something there. But again, I don't think there's anything immediate. We have today the best credit ratings in the telecom sector. I will say that in the world, I don't know about Japan, but outside of Japan, I think that we have the best credit ratings of any telecom company in the sector, and we intend to hold on to them. And your next question comes from the line of Amit Grohvodelsky from Barclays. You may proceed. Thank you very much and good morning. Good morning. Good morning. I was wondering if we could talk about the reverse side of some of the increased competition in Mexico. If we think about some of the pricing declines that have occurred from a regional perspective and some of the increased competition, do you believe this puts you in a better position to benefit from easing asymmetric regulations going forward? And then second question, with your CapEx down, which is a theme that you had mentioned in your analyst update late last year, I suspect that the expectation is improving cash flow conversion. And with that, how should we think about the priorities for cash at this level? Is it to focus on some of the debt? Is it potential increased return to shareholders? How should we think about your strategy going forward? Thank you very much. On the second one, I could see a little bit related to what Michel Guarregarrest. Well, the intention our intention is to reduce debt net debt by EUR 3,000,000,000 EUR 3,000,000,000 to EUR 4,000,000,000 this year. That's the intention, and that means that some of the savings that we will have on the CapEx side will be utilized mostly for debt reduction, okay? The so that will be the priority for this year as opposed to, say, paying an extraordinary dividend as we did last year. And the first question, we're in the process where Ipetl is reviewing all the asymmetric, what happens the last 2 years as we don't know what they are going to decide. I think in my personal that there's effective competition in the market. The competition means that we don't they should see that we are not putting prices in the market. So when you have competition, you don't decide the prices in the market. So what is happening, it's what you could see the last 8 months. There is much more aggressiveness in the market. We don't decide that. We don't decide what the market is going to do. And that means that there is effective a competition in the market. So still we don't know what the Ipatel is going to decide, but I hope there are going to be more relaxed regulations in the future for America Movil. That does not mean that we're going to be out of being a preponderant player, but means that there should be more relaxed regulation for Telcel and Telcos. Thank you very much. And one follow-up, if I may. Switching gears a bit, how do you think about your opportunities for a TV license at this juncture? Well, we in Telmex, we ask for the to renew the concession. And we don't know what they are going to decide. Still, they are reviewing that. And let's see what those the Ipatel is going to decide. And your next question comes from the line of Andre Bahia from JPMorgan. You may proceed. Hi, good morning. So, 2 years ago, AMX tried to get out of the preponderance by trying to divest some assets. And we now see an opportunity that we have a very aggressive competitor that is probably AT and T. And but we are seeing that American Airlines is trying to fight back like trying to follow like the price discounts or more aggressive campaigns that we see from competition. So why not simply giving up market share that would expedite American Mogul getting out of the preponderance status? Well, it's a very complicated question. So because it's you need to defend your customers. You need to be also competitive in the market. And well, we don't know even if there's America Movil doesn't have any offer of selling customers at this time. So there is at this stage, what we want to do is we want to defend our market. And I think as we're saying, it's very good for all the teleminutes. And I think that's a very good visualization for the customers for the future. So we are as I'm saying, we're losing market share in the prepaid business. And well, I think we're going to lose market share in the next year. So of course, AT and T and Telefonica are aggressive and they are going to get more customers. But in the other side, the market in Mexico is also going to grow. Still the penetration in Mexico is low. And I think we're going to have more growth in the market in Mexico. So that's what we are the strategy for Mexican market. And do you see any signs of change in this competitive position like order should we just expect the market to get more and more competitive over time? Well, I think we are at a very competitive pricing right now. I think much lower than in a lot of countries than in U. S. So we are at a much lower price than what my competitor is having in their market, no, in their so I don't know. And I'm not the one who is deciding at which stage we're going to go. We're deciding to compete and that's what we're doing. But if you are asking me if the market today, the market today is really competitive at a very low pricing today, much lower than what you see in the United States. One thing, Andre, that is interesting to look at this, how the structure of subscribers of America Movil in Mexico is changing. We have been losing share in prepaid. We are continuing to gain, I think, in postpaid. The quality of the subscribers is improving overall. I think that the quality of the network is a key element. We have seen that as we move our prices closer to the competition without even having to match them, This immediately attracts more people back to our network. The just and in the care of this is that in February March, we had the highest numbers ever of portings under number portability. And that is basically what we have seen already in other markets, including in Europe, that the main driver of your competitiveness visavis oil operators is the quality of service. We have the best quality of service. We have the best data speeds of any network. We have the best coverage. And that's not going to change anytime in the future. So we expect we will be able to hold on to this competitive advantage and that we and that should continue to allow us to gain in votes in the segment of the market that we're more interested in. And in this regard, if you look at our plans for CapEx this year, it's basically, in the case of Mexico, basically meant to allow us much greater capacity, to allow us again to process much greater volumes of data so that we can continue to service the high volume clients the way that we want, okay? So I think that's how you should look at that. We have an installed infrastructure in Mexico. That is a key element of competitiveness going forward and we intend to maintain it and strengthen it. And your next question comes from the line of Carlos de la Regarda, the GBM. You may proceed. Thank you for taking the question. I noticed in Brazil there's a substantial contraction in operating profitability. I was wondering if you can comment on that because that seems to be mostly explained by depreciation charges. That's the first question. Thank you. Let's talk a little bit about Brazil. I think in Brazil, well, we know what's happening in the economy. It's been fact that has increasing a little bit. We have been a little bit more careful on what we're doing there. But all overall, we are gaining market share in most of our markets. In the pay TV, we're doing well. In the broadband, we're doing well. Also in the PICs, I think in the corporate customers, we're doing well. So we are investing and we're preparing. When Brazil recovers, we are well prepared to take more market there. So that's what is happening in Brazil. It's a special condition. The economies are not doing so well. And what we want to do is to be cautious on what is happening. We're seeing that bad debt is increasing. A little bit of our DTH customers segment C and D are disconnecting. So what we want is to be more cautious on all our offers that we are giving. So that is what is happening right now in Brazil. But all overall, our company has a very good strategy. We have peaks, we have mobile. We are doing also cloud, we are doing applications, we're doing more on the cloud business in the corporate side. So we are well prepared in Brazil. Thank you, Daniel. I mean, I'm very aware of the integrated offering that you guys have in Brazil. But I don't think that explains the actual decrease in the operating profit. I mean, EBITDA is increasing by 1.2%, whereas operating profit is declining by more than 60% year over year. So I don't know if there's a specific reason for that. Yes. I don't know. I can Daniela can tell you I don't have it, why the depreciation specifically is growing in Brazil. I don't know, Oscar, if you have the number exactly. But if not, Daniela can give you exactly what's the reason why is the reason why the depreciation is growing in Brazil a little faster now. And your next question comes from the line of Walter Assuming one question, just to go back to the prior question, we have now the answer. We changed the policy for depreciating the set top boxes in Brazil. It used to be for 5 years. So we moved forward to 3 years because that's more consistent with the life of that type of hardware. And obviously, it's more reflective of the real value of the hardwood that we are buying. So it is appreciated more rapidly. That's the reason. Thank you, Carlos. And your next question comes from William Walter Piecy from BTIG. You may proceed. Great. Thank you. This is a question for Carlos. Carlos, the leverage, obviously, because of the movement in EBITDA is up. I see that your share repurchase is obviously a lot lower than it was back in early 2015. Just curious, just given the trajectory of EBITDA, does it make sense to perhaps suspend the share repurchase program at this time? No. I think that we can continue with the ability will depend on the prices. As you know, we have not always had a linear share buyback. So very often the share buyback plan is sensitive to the kind of prices that we see in the market. So I would say that, yes, we do have some amount year marked for share buyback this year. And in principle, we will continue with that at what pace will depend on what prices we see in the market. Understood. Also Verizon was talking very positively about TracFone as a good prepaid channel for them. I know, you use a number of different operators. Have you been shifting, and you have the ability to shift your traffic between operators. Have you been shifting a significant amount of traffic to Verizon and away from the other U. S. Operators? No, I think Verizon at this stage has a good share of our traffic. And yes, if Verizon is giving us a more competitive offer, of course, we can move more traffic to Verizon, but it's going to depend on the offers that we receive and that's what we have been doing for the last 2 or 3 years. Verizon has been very aggressive and that's why they have been growing with us in the last 5 years. So they have a big share of our market and I hope we have in the future very good offers from them and we can increase the market. But that's the business and that's what we're seeing there. Depending on the offer, it's going to depend on with whom we can go. It's not only Verizon, it's also T Mobile, it's also AT and T will have a business with them. And that's more or less what you have been seeing in the last 3, 4 years. And your next question comes from the line of Gregorio Tomasi from Itau BBA. Please proceed. Yes, good morning. Thanks for taking the call. I have actually two questions. The first one is of the local lube unbundling in Mexico. I want to go back a little bit there. I understand there are any rules that allow you not to unbundle for a certain period of time the fiber that you have deployed in some accesses, some of the fiber accesses that you have deployed. Is that in place? What's the time window? And basically, I think it was 2 years, but it's not in place and have you and what percentage of your access network actually would fall into the category that would not be forced to be unbundled? That's the first question. And the second question is about, again, the depreciation charges. Can you give us a refresh as a guidance in terms of percentage of revenues? Where should depreciation and amortization on a consolidated basis converge? Yes, Gregorio. Speaking about the cash flow of unbundling, yes, the measures that Ifatel established 2 years ago regarding the unbundling, they specified that there was a few years for new development of fiber. And basically, this is one of the conditions that is defined in the measures that were established on December of last year. Regarding the number, I don't have the numbers right now, but basically, there's a portion of those that would be exempt from the unbundling at this moment for 2 years. On the precision amortization charges, well, I would expect them to be similar to what we have in this quarter. They had been always around 13% of total revenues. I'd say that what is being reflected in this quarter that's a bit higher than what before was on account of what was your cost in Brazil that we are accelerating the depreciation of the set top boxes. But on the other hand, what we are now doing, which we did not have in the Q1 of last year, was the amortization of goodwill intangible assets associated with our consolidation of Telecom Austria. So that leads to this amortization that has increased the item the line item of depreciation amortization charges. So the comparison year on year was high because in the Q1 of last year, amortization of goodwill was not taking place. But this should normalize for purposes of quarter over year on year comparisons that should normalize next quarter. But in terms of percentage of revenues, I think that we will expect to continue to be close to around 14% of revenues. Thank you very much, Carlo. Thank you. Thanks. And your next question comes from the line of Ric Crantes from Raymond James. Please proceed. Thank you. Good morning. Thanks for taking my question. Couple if I could. 1 on Telecyte, you mentioned it was about 1.5% to 2% of your EBITDA in Q1. I think it was also about 1.5% in Q4. So this really is a year over year difference, I guess, not a quarter over quarter difference for Telecyte's impact. Is that correct? That's correct. And the 1 point 5% and 2%, it's on the Telcel results. I was saying not on the Mexican results. So I have to check exactly what is the percentage of all the Mexican results because I was giving you only on the wireless side. So if Daniela can give you exactly the number on the Mexico. And it's also year over year, not quarter over quarter, as you are saying. Exactly. Good. Thank you. Thanks. And coming back and on Walt's question earlier, obviously Verizon made a nice mention of you, but the results in the U. S. Were very tough in the Q1. Can you talk a little bit about the competitive environment in the U. S? Usually Q1 is a good quarter with the income tax season, But how do you view the competitive dynamics in the U. S, please? Yes. What we're seeing in TracFone is a lot of competition in the prepaid side. And I think also the U. S. Market is really competitive. And what's happening, we're an MVNO. So we have to be as the market is changing faster their rates, then we have to negotiate new offers with our carriers. So that's why it has been more costly for us because there's a time where you need to give a new promotion and then you have to negotiate with all the carriers and new rate. And that's more or less what it has been happened for the last 6 months, 8 months. And that's really we're really happy, as you said, that Aison is mentioning in us as our prepaid business. We have a big market, a big size of our market with them and we're really happy to with that mention. At this time, there are no further questions in queue. I would now like to turn the call back to Daniel Hash for final remarks. Please proceed. Just to thank you everybody for being in the call and thank you. Good morning. Good morning, everyone. Ladies and gentlemen, that concludes today's conference. Thank you for your participation. You may now disconnect and have a great day.