Good morning, ladies and gentlemen, and welcome to the audio conference call that will review Embraer's First Quarter 2020 Results. Thank you for standing by. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions to participate will be given at that time. As a reminder, this conference is being recorded and webcasted at ri.embryair.com.br.
This conference call includes forward looking statements or statements about events or circumstances, which have not occurred. Embraer has based these forward looking statements largely These forward looking statements are subject to risks, These forward looking statements are subject to risks, uncertainties and assumptions, including, among other things, general economic, political and business conditions in Brazil and in other markets where the company is present. The words believe, may, will, estimate, continuous, anticipate, intend, expect and similar words are intended to identify forward looking statements. Embraer undertakes no obligations to update publicly or revise any forward looking statements because of new information, future events and other factors. In light of these risks and uncertainties, the forward looking events and circumstances discussed on this conference call might not occur.
The company actual results could differ substantially from those anticipated in forward looking statements. Participants on today's conference call are Mr. Francisco Gomez Neto, President and CEO Mr. Antonio Carlos Garcia, Executive Vice President, Finance and Investor Relations and Mr. Eduardo Couto, Director of Investor Relations.
I would like now to turn the conference over to Mr. Francisco Gomez Neto. Please go ahead, sir.
Good morning, everyone, and thank you all for joining our call today. I am Francisco Gomez Neto, President and CEO of Embraer. I'd like to make some initial remarks before passing to Antonio Garcia, our CFO, that will explain the results. We are leaving unprecedented times in the world with a COVID-nineteen outbreak this year that has brought meaningful impacts to our industry, productivity to the markets and uncertainties to our customers, employees and suppliers. I strongly believe that in difficult times like this, we need to stay focused on our strategy.
I have chosen 5 main areas that in my view will make Embraer to emerge even stronger of this crisis. And Slide number 3, we highlight them. 1st and most important one, the health and safety of our employees. Our priority is and will continue to be protect the health and safety of our people. We have been taking many measures to protect our associates who need to perform work on-site.
Measures such as sanitizing common areas and workstations, use of masks, adapting cafeterias and work areas to ensure appropriate social distancing and providing medical support and guidance in compliance with all the World Health Organization recommendations. 2nd, cash preservation. Embraer has launched a cash management team. We have daily meetings to discuss our current liquidity and define actions to preserve our cash. As for example, strict expense control, very high focus on account receivables, inventory reduction and a more robust investment approval process.
Such initiatives will help us to cross this crisis and will remain as new processes in our company after the crisis. 3rd, we capture synergies. We are already working to eliminate duplications and regain synergies in our commercial aviation. We will manage this business along with the others to be more efficient, eliminating redundancies in reducing costs. 4th, business plan update.
We are working with the leaders of each Q1 of our business units to review our 5 year projections in the light of market conditions, establishing strategic initiatives, potential partnerships, targets, KPIs and a well structured execution process with focus on growth, cash generation and profitability. And finally, our efficient area of focus is to build a lean and efficiency organization. Before the pandemic, part of my time was dedicated to visit Embraer sites around the world. I like to be very close to the teams and to where our products are made. I had lengthy conversations with leaders of different sites, different areas in many levels of our organization.
And I'm strongly convinced that we have a lot of opportunities to make Embraer a more lean and efficient organization, hosting initiatives as operational and commercial excellence, programs to reduce costs of our products and always keeping our innovation DNA. I'm very positive that Ingraham will exit this crisis much leaner, more efficient and competitive to grow profitably in the years ahead. Now, before moving to Antonio, I wanted to highlight some important initiatives related to social responsibility that Embraer has been performing in Brazil and abroad. At Slide number 4, we highlight that Embraer has been working with its supply chain to produce around 5,000 ventilator parts in Brazil. We made a partnership with the Albert Einstein Hospital to make 700 intensive care units available.
In the areas of producing face masks in Florida to be used in our U. S. Facilities. The Brazilian government is deploying our KC-three nineteen million to transport supplies, medical equipment and ambulance to several locations in Brazil. And Embraer has also donated 40,000 COVID tests to the Brazilian public health system.
With that, I conclude my initial remarks and would like to pass the call to our CFO, Antonio Garcia. Thanks for your attention.
So thank you, Francisco. It's a great pleasure to talk to all of you. Now moving to Slide 6. As Francisco mentioned, we are operating during unprecedented times with developments regarding to the COVID-nineteen pandemic, evolving almost daily and growing risks to the global economy, our industry customers and other stakeholders. Despite our uncertainties, Embraer's liquidity position remains solid with our continuous cash discipline.
At the end of the Q1, we finished with a total cash of $2,500,000,000 and a good debt situation with no major maturities coming due until 2022. We are also in discussion with local and international banks to bring additional financial lines to further strengthen our liquidity in short term. I cannot give you details now, but I expect to have news to share with the market in the coming weeks. On a different subject, during the Q1, we finished the internal segregation of the commercial aviation business, which basically shut down the whole company during the month of January as we transitioned all of our operating system, which impacted our deliveries during the quarter. Then, as we already disclosed around a month ago, we received notice from Boeing regarding their interest to terminate the strategic partnership between our 2 companies in the commercial aviation business.
Embraer has been in compliance with all of the conditions under the agreement and we will work in the arbitration process to pursue any and all remedies available to compensate Embraer for the wrongful termination of the agreement by Boenje. We will not make further comments on the arbitration procedures, giving its confidentiality aspects. By the way, the COVID-nineteen and the termination of the EMEA caused a delay in our closing procedure and we should be fast in the coming quarters with our report. With respect to the COVID-nineteen impact, we are seeing the biggest impact in the commercial aviation business, while executive jets so far remain fairly resilient as well as defense and security. We continue to discuss deferrals with our commercial customers and up to now we haven't received any cancellation request.
The good news is that key marketers for commercial aviation in Europe and United States are already resuming operation and in many cases using smaller regional jets that should lead the aviation recovery. So in Slide 7, let's talk about the measures for cash preservation. We create in March beginning of March a cash management team and we have daily discussion about our cash position and it's a forum where we have the whole management team take a decision with the one subject, one target is the cash preservation. In regards to our order book and cash inflows, you have been daily monitoring our orders and market conditions with an increased focus on receivables collection. We are also rightsizing our production plan with the real time planning and direct supplier negotiation to check the parts delivery and postpone payments.
We were able to reschedule deliveries with all of our main suppliers and we thank our supplier for it. Regarding the workforce, our HR team and the leadership did an outstanding job. We reached an agreement with our unions for furloughs and workday salary reductions. It's important to highlight that the salary reduction has included all of our leadership, including senior management and our Board of Directors. We have more than 50% of our Brazilian workforce under this program and I'm proud of the speech with which we responded to the COVID pandemic with the steeper workforce adjustment.
We will continue to evaluate the structure of the company following the termination of the emitter of Seabournik and work to Embraer as efficient as possible and capture our synergies. Finally, we are reducing inventory levels, cut investment and expenses with a strong discipline and cost control. I'm very proud of Embraer's team's response to the cash preservation excellence so far. Moving to Slide 8, we show highlights for the commercial aviation business. During the Q1, Embraer delivered 5 ejets.
It's important to note that the Q1, it's always seasonally weak. And this year, we were closed during the month of January as we work to finish the carve out of the commercial aviation business. As far as orders, we didn't have any cancellations since COVID-nineteen outbreak, and we are working closely to our customer to adjust our deliveries to their current needs, which will bring deferrals to our deliveries. In terms of new orders, SkyWest placed an order for 20 E175 aircraft, which brings the total number of orders for SkyWest to the impressive mark of 108 plants since 2013. We also display the E195E2, which recently entered service in the second half of twenty nineteen at the Singapore AirAsia, prior to the worsening of the COVID-nineteen outbreak.
And finally, we would like to reinforce the statement of the International Air Transportation Association, IATA, that expects regional aviation to lead their travel recovery in the upcoming months. Slide number 9, some highlights about Executive Aviation. During the Q1, we delivered a total of 9 business jets, of which 5 were large jets and 4 were large jets. We are proud to see the new enhancement Finno 300e received triple certification from FAA in the United States, EASA in Europe and ANAC here in Brazil. In terms of sales activities, our business customer reconfirmed their orders for the year with few deferrals, and we maintain our book to bill of 1 to 1.
As far as operations, executive jet facility in Florida were defined as essential operation in the state and we did not close, continuing with aircraft production, final assembly and customer deliveries. Also Embraer Executive Jet has offered its business jet demonstrators to be available to transport critical patients in need of medical treatment during this pandemic. Moving to Slide 10 to talk about defense. The Defense and Security business celebrates the official signing of the contract with the Brazilian Navy, in which Embiare's work with Stays and Crook for the production of 4 ships to be delivered between 2025 and 2028. The 1st Super Tucano, designated to the Nigerian Air Force, performed its inaugural flight and Embraer signed an additional contract for 2 Super Tucanos for U.
S. Air Force Special Operations Command. As far as the KC-three ninety, currently we have 6 KC-three ninety cargo aircraft under different stage of production for the Brazilian Air Force as well as Portugal. And we expect to deliver 2 KC-three ninety this year to the Brazilian Air Force to continue to modernize their fleet with the state art of plan. As I mentioned before, Brazilian government has been using their 2 KC-three ninety already delivered for logistics operations across our country to help in the combat against the COVID-nineteen pandemic in Brazil.
And finally, an important milestone for the Brazilian Air Force Gripen project, we have the 1st metal cut for the air version of this fighter jet, which is a 2 seat version that Embraer is developing together with Saab. Let's go to the financial results. Slide 12. Our backlog, our 1 Q1 2020 backlog was evaluated at US15.9 billion dollars which although is slightly lower than the US16.8 billion dollars of the end of the year, it still represents several years of deliveries across our business units. Some of the reduction is mainly driven by the FX conversion of contracts in local currency.
Next to Slide 13, we presented aircraft deliveries starting with the commercialization. As I mentioned previously, the Q1 is usually the lowest in terms of deliveries for both commercial and exhibitors. Thus, this year, it was impacted by the fact that in January, our operations were largely positive to the entire mass in order to complete the segregation of the commercial aviation business. Embraer delivered a total of 5 commercial jets and 9 executive jets during the Q1. Moving to Slide 14, net revenues.
In the terms of consolidated revenues, Embraer reported US634 $1,000,000 in the Q1 of 2020, which was down around 20% from the last year Q1, most driven by the lower commercial deliveries and the impact of the blackout period in January 2020. Commercial aviation revenue reached at US140 $1,000,000 as activity at $130,000,000 driven by the better mix of deliveries in the quarter, especially with the delivery of 3 Praetor 600s and 1 Praetor 500. Defense and Security, 149,000,000 and Services, 230,000,000. Next slide, on the Slide number 15, we present the SG and A expenses for Embraer. Overall, we have a positive trend in our SG and A expenses.
In the Q1, we have some adjustment due to the collective vacation in January and the temporary paid leave in March to close the facilities in response to the COVID-nineteen pandemic. Regarding the increase of selling expenses, this was mainly driven by higher adjustments for bad debt provision given the COVID-nineteen pandemic's risk effect. This was around BRL33 1,000,000 in additional provision for the Q1 in the selling expenses. Moving to operating results at Slide 16. Embraer reported adjusted EBIT of $9,000,000 in the Q1 of 2020 with a margin of 1.4%.
The adjusted EBIT in the Q1 excluded roughly 55,000,000 dollars in non cash items related to the COVID-nineteen outbreak. It's important to highlight that our adjusted EBIT in the Q1 includes separation costs of $21,800,000 comparing to the 12,300,000 dollars in separation costs booked in the Q1 of 2019. Even with higher separation costs this year, operating results were better than last year, mostly driven by higher margins in the executive and defense. So next slide 17, we show the adjusted EBITDA. Embedded 1st quarter, adjusted EBITDA also excluded the costs related to the COVID-nineteen.
Adjusted EBITDA reached BRL 65,000,000 of a margin of 10.2 percent for the period, which represents a significant improvement compared to the BRL 31,000,000 in EBITDA and 3.8 percent EBITDA margin in the last year for the Q1. Moving to the next Slide 18, we present net income. Embraer's adjusted net income reached a loss of US104 $1,000,000 in the first quarter, implying a negative margin of 16.4 percent for the quarter. Our earnings has been negatively impacted by the combination of the separation costs, similar to the impacts already showing the EBITDA and EBITDA and higher financial expenses. Our reported net income was much bigger, loss of $292,000,000 but mostly driven by deferred income taxes items that has been triggered by the commercial aviation dropdown for the deal conclusion, which is not the case anymore.
On the Slide 19, we present Embraer investment and CapEx development. During the Q1, Embraer invested BRL47 1,000,000 of which research and expenses were BRL6 1,000,000 Development was BRL28 1,000,000 and CapEx BRL30 1,000,000 and in regards to development, the most part of the investment was for the E175E2. Next slide, Slide 20, we show the company's free cash flow. 1st quarter free cash flow usage is almost always the highest during the year. Generally, due to the lower deliveries and high investments in working capital to prepare for higher deliveries in the remainder of the year.
In the Q1 of 2020, our free cash flow was negative $677,000,000 which is roughly in line with our free cash flow usage in the last year Q1. Finally, on Slide 21, we show our currency indebtedness profile. Our net debt position at the end of the Q1 stood at US1.3 billion dollars with a robust total cash position of US2.5 billion dollars
and a
total debt of US3.8 billion dollars We are confident in our liquidity position at the present as we have no major debt maturities until 20222023, and we continue to work in additional financial lines. Our debiting maturity is mostly concentrated long term with 4 years duration. With that, I conclude my presentation. I'm pretty confident that Embraer remains and will continue to be stronger. And please, operator, you can open for the Q and A session.
Thank you.
Thank you. We will now begin the question and answer session. Our first question comes from Myles Walton,
UBS. Thanks. Good morning. Hantelio and Carlos, maybe you or Edu can provide the margins by segment. It sounded like Defense and Security and Executive Aviation actually had pretty good performance.
So if you can just highlight that? And then I had a couple other questions.
Yes, as you said, we had a very good quarter for Executive and Defense. Executive margins were around 2%, positive margins. As we have been saying, Executive margins are recovering. Now we have a very solid portfolio of products with the females and the growers and that's it's helping the margins. We've already shown the results.
In defense, also as you mentioned, as we concluded the KC Tri Nardi department, margins would improve and that's also already showing the results. We have double digit margins, slightly above 10% for defense, also good margins given the conclusion of the KC development. On commercial, margins were affected by very low deliveries, right? As Antonio mentioned, we were shut down in January. We only had 5 deliveries.
So margins in commercial were slightly negative. And finally, on service, we keep our double digit margins as we have been showing on the last couple of quarters.
Okay, great. And then for the free cash flow, Antonio Carlos, I know you're in the process of securing financing and looking at ways of cash preservation. As you look at it today, for the remaining three quarters of the year, will free cash flow be positive?
Good morning, Paz. Good morning. I would say the Q2 will be also a tough quarter for us. But then as we always do, we will recover in Q3 and Q4. I do see a pressure in Q2 because we had the biggest impact of COVID on the cash flow side.
And then like to see a recovery in Q3 and Q4. Nothing changed in the current scenario that we are leaving right now.
Okay. So do you think year end balance sheet position is similar to where it is right now?
Let's say a little bit above $2,000,000,000 in regards to the liquidity is more or less our target.
Okay. And the last one, Francisco, the slide on short term strategy is helpful. Can you give a comment towards the medium term strategy of the company and whether recombining what has already been separated is something that you're pursuing in the medium term? Or are you looking at other alternatives?
We are just in the process to review our 5 year strategy plan. I mean, with our focus on the commercial aviation, but also we view this 5 year plan for the other business units as well in the light of the COVID situation. So we expect to complete this process in a few months. And in this process, we are evaluating all the possible actions we can take, including potential partnerships.
Our next question comes from Ron Epstein, Bank of America.
Can you give us a feeling for how your conversations are going with your customers? There's a narrative that regional aviation smaller capacity aircraft could lead us out of this downturn. Are you seeing any evidence of that with your customers? And if you are, can you give us any feel for what you're hearing?
Well, we have, at this point of time, a quite stable situation. We have seen some defaults of our customers, but more cancellations might have some change in the coming months depending on the progress of this crisis evolves. But at this point of time, I mean, we believe our situation is quite stable in terms of production program for 2020 2021.
Okay. And then if we shift to the Business Aviation end market, the margins this quarter were better than I think folks were expecting. How did the demand front look? Have you seen any deferrals or cancellations there? Or what's going on in the Business Aviation side?
Thanks.
Well, the Business Aviation has certainly much less than the Commercial Aviation. We had some a few reforms for this year. And we
might have more opportunities next
year because I mean more executives might increase the use of shared flights or even decide to buy their own jets for now reserve the transportation. The adaptive aviation might be an opportunity after this post COVID. And by the way, although our commercial aviation, we believe the regional and domestic flights should start earlier, I think this will be a good opportunity for our Egypt, I mean, to recover first and also their respective service for those
Our next question comes from Josh Milberg, Morgan Stanley.
Good day, everyone. Thank you for the questions. Your comment on where you see cash at the end of the year was very helpful, but I was hoping you could update us a little further on your the target of $1,000,000,000 in potential cash savings for 2020 that you touched on, on the last call. And specifically, I was hoping you could address the CapEx and product development of that. And just what kind of investment flexibility you see around the E2 program?
That's my first question.
Hi, Josh.
Yes, as we mentioned on the previous call, we continue to work very hard on the cash side. We have this cash management team that Antonio is leading, and we have been able to identify a lot of potential cash savings. This is going to be very important for us to offset some of deferrals, some of the deferrals, especially in commercial. So I would say overall, the cash situation has been stable in the last 4 to 5 weeks, which is very good. So we are working hard to reduce investments.
In terms of the workforce, we have more than 50% of our workforce in work hours and salary reductions. So all those initiatives combined with suppliers that we are renegotiating orders and also postponing payments, All of that will help a lot, our cash consumption this year. Q1 is always the weakest quarter in terms of cash consumption, but the Q2 should be also a weak quarter. But after that, we expect to recover. I believe Antonio wants to add.
No, it's just to repeat. We are targeted to finish the fiscal year with a liquidity around EUR 2,000,000,000. That's our target. It's more or less where we are today with some small adjustment. And we are also going down for investment more than 50%, by the way, for our program.
Okay. That's helpful. But also taking a little bit of a longer term view, can you just remind us of roughly what the amount of investment is due for the E2 program? And how much of that corresponds to the E2175? And maybe also just comment on whether you've contemplated the possibility of a later entry into service for the E2175?
Yes. I was just going to add, Antonio. We don't have any diffusions in terms of deferring our programs at this point. What we can say is really, we have been spending the last couple of years around $400,000,000 to $500,000,000 in investments, and these numbers should go down quite substantially. So investments should be more at the ballpark of $200,000,000 to 300,000,000
And in regards to the financial, we are revising our investment in our time lines as soon as we have a final conclusion going to communicate to the market. Until now, there is no chance to pursue.
Okay. That's very helpful. And then just one follow-up on the defense profitability. I think you suggested and you had suggested in the past indeed that your shift from a development to production phase of the KC could in fact mean higher profitability. And but we've also seen very high levels of volatility in your margins in the sense in the past.
So just wanted to get a little bit of a better sense if you think that the margin that you had this last quarter is something that could be pretty recurring over the remainder of this year and beyond.
That's a good question, Josh.
As we have been saying, right, we had tough margins in defense in the last couple of quarters, mostly driven by the end of the development of the KC-three ninety. Now that we are concluding the development and we are moving from development to production, we expect margins to get better. I think Q1 was already an indication of that. We have double digit margins in defense, and we expect defense margins to maintain at a healthy level as we move away from the KC development.
And by the way, we do have 1 year still have a really small reduction in regards to revenue for the defense side. It's more or less stable, which gives us a kind of, let's say, comfort to go through the year with a nice number.
Okay. If you allow me also, when I mentioned in my initial remarks, initially as operational excellence and cost reduction for specific products, We have our projects to focus on COGS, so cost reduction of the specific products and the KC is included in that project. So we expect that going forward to 2020, 2021, we expect a very high focus on this cost reduction programs of our products with a positive impact in the results of such products as well.
Next question comes from Alex Falcao, HSBC.
Good morning. Thanks for the question. My question is regarding the news talking about a negotiation between you guys and BNDES for a debt facility. Can you give us any details on how would that work, size, any equity component into that? And secondly, given your perspective on where cash is going to be earlier in the call, would that be necessary?
Or it's going to be a standby facility depending on how the environment evolves? Thank you.
Hi, Falko. Our liquidity, as you said, remains quite strong. We closed the quarter with CAD 2,500,000,000 in cash, very solid cash. Despite that, we continue to evaluate potential new finance lines. We're not giving this close at this point, but we are confident that there is plenty of liquidity available for Embraer.
And if it's necessary, we're going to continue to add liquidity to the company. So we don't see that as 100% necessary, but I think it's very important for us to keep a strong balance sheet, and we have the finance lines available if we want to improve that.
Sakon, just another comment here. If it's enough or not, I would say EUR 2,000,000,000 is our target because we also want to show that Envira is still liquidate, that we still work in the market also for future business to close with our customers. And again, I have no fear that we are able to do it. And we need to show also that we have a strong financial position throughout this year even with everything what we are seeing right now, okay? And for the time being, we don't want to comment about the financial life, but at least we do not see any equity as a priority right now.
Our next question comes from Mr. Guy Van Rumer, Cowen.
Thank you very
much. So we're about 2 thirds through your second quarter. Could you give us some color in terms of the demand for business jets or what you're seeing in the market and for commercial? For example, a number of the dealers we talked to said the 1st months of the quarter when COVID was coming out, there were no deals closing. Are there more deals closing now?
And also now that people have looked over their situation, are you seeing both in biz jets and in commercial more or less requests for deferrals? Thank you very much.
Okay. In regards to for sure, we do see a huge amount of referrals for the commercial aviation. And for the business yet, we have realized, I would say, below 2 digits, but the firms and especially the fleet owners, they are confirming their orders. And that's more or less the 3 they are seeing right or highly concentrated on commercialization for this fiscal year in regards to deferrals.
So, Bijets, you have a chance of being close to where your earlier forecasts were in terms of as you see demand at this moment?
Yes. And even during the Q2, with all restrictions, Aviard still continues to deliver aircraft.
Terrific. Thank you. And then you mentioned kind of once we're through COVID, where the company is going longer term. You mentioned examining partnerships. I was surprised that you didn't you and Boeing didn't continue the partnership on the KC-three ninety, which looked like it wouldn't require cash on their side, it would have had a lot of benefits for both parties with limited investment.
And could you comment on any other potential partnerships like with the Chinese or others just the ones that are potentially in the mix? Thank you.
Francisco speaking. Yes, as I mentioned in my remarks, we are now in the process to review our 5 year strategy plan. And of course, some initiatives are related to potential partnerships in the different business units. And of course, I mean, markets like China, India and others are potential ones. But we are in this moment reviewing and analyzing what could be the potential or possible business models for potential partnerships.
Then DTC, the original business plan for DTC did not include the countries as EOPS, for example. So the market perspective remain positive for the C390. And of course, I mean, here we also have opportunities for future partnership. But at this moment, we are still in the process to evaluate alternatives and possible business models.
Does that include for the commercial business or just mainly the defense and bizjet businesses? No.
Commercial business. Commercial business, for example, I can mention one project that we have, the TP, the Kruber prop that we have started studies on this project. This project is a good candidate for a partnership with potential markets that might be very interested in having this aircraft.
Next question comes from Victor Mizusaki, Bradesco BBI.
Hi, thank you. I have three questions here. The first one, if you can give additional comments on the provisions for bad debt, if this is for if this is related to a specific client? Number 2, think about the second quarter, how much can we assume of savings with labor costs with all the initiatives that you mentioned? And the last question, I mean, you mentioned that the target is to keep minimum cash and liquidity of like $2,000,000,000 But can you comment about the net debt position by year end?
What can we expect?
We're going to answer your first question. This is actually
bad debt provision. We didn't change the procedure we had internally. What has been changed is the rating of the major customer. And by evaluating this, we were we do prefer to build up additional provision in order to avoid certain risk. Again, some methodology just changing huge change in the ratings of our customers.
That's the answer for the first question.
Regarding the labor costs,
as Antonio mentioned, right, we were super agile to reduce labor costs and adjust our labor force to the COVID-nineteen situation, right? I think that was very important. I think we were faster than most of the companies in the market. We were able to put more than 50 percent of our labor force in work hours reductions, reducing salaries, and that includes double leadership, even the Board. So that will be an important saving that is part of the whole cash preservation initiative.
So we're not giving a number, but it's an important initiative. In terms of net debt, we are working hard on the cash preservation and that's it's going to help the to reduce the potential cash burn. We should close the year with net debt a little higher than last year, but we still don't have a number to provide at this point. I don't know if Antonio wants to add something.
Some. Okay. Thank you.
This concludes today's question and answer session.