Ladies and gentlemen, thank you for standing by, and welcome to today's Matas second quarter 2019/2020 conference call. At this time, all participants are in listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star and one on your telephone keypad. I must advise you that this conference is being recorded today on the 30th of October 2019. I would now like to hand the conference over to our speaker today, Gregers Wedell-Wedellsborg. Please go ahead.
Thank you, operator. Good morning, everyone. Welcome to our presentation covering the second quarter of the 2019/20 financial year. With me on the call today are CFO, Anders Skole-Sørensen, and Elisabeth von Bason, Head of IR and Corporate Affairs. I will start out by giving a short comment on the highlights for the quarter. Anders will take you through the presentation of our second quarter results. Finally, I will comment on the strategic progress on three out of five strategic tracks, as well as on the outlook for the financial year. As with Q1, this quarter is impacted by the implementation of IFRS 16. We will, however, comment on the numbers on a pre-IFRS 16 basis, unless we mention otherwise, in order to be able to make comparisons and explain developments compared to last year. We look forward to taking your questions at the end.
Please turn to slide number two. The highlights for this quarter was overall top line growth of 5.8%, like-to-like growth of 0.3%. Earnings were stable at DKK 107.4 million compared to DKK 108.6 million same quarter last year. The gross margin, we will return to the gross margin, the gross margin was stable underlying, including a normalization from Kosmolet, the company we acquired, so 44.7% against 44.9% of last year. Notably, we had the sixth consecutive quarter of growth on matas.dk with more than 50% growth. We have decided on a rollout plan for the new store concept, Matas Life, based on the test results. I will return to that. We have narrowed the range for our 2019/2020 guidance on top line and like-to-like, and we have a lower CapEx guidance. I will return to each of these in more detail later.
Please go to slide number three, where Anders will go through the financials.
Thank you, Gregers. On slide three, which will eventually turn up, we saw an increase in revenue of 5.8% from DKK 777 million in Q2 of last year to DKK 823 million in Q2 of this financial year. Growth was obviously impacted by a number of factors. On the positive side, we saw the revenue from Firtal coming into the numbers. As Gregers mentioned, we saw strong online growth of more than 50%, 53%. We also had a small positive impact of one more trading day lifting sales slightly.
On the negative side, the distribution of trading days in the quarter was less favorable than in the same quarter last year, and the sale of seasonal products, in particular sunscreen, were lower than we saw in the same quarter last year, where, as I think you all know, the glorious summer weather meant that we had record high sales of these types of products. Overall, revenue for the quarter were a little lower than expected, with like-for-like growth of only 0.3%. With higher overall sales, of course, we also saw an increase in gross profit, which increased by 2.4%, or DKK 8 million. The headline gross margin for Q3 was 43.5%, down by 1.4 percentage points from 44.9% in the second quarter of 2018, 2019. However, this decline in the gross margin was primarily driven by a non-recurring effect in connection with the Kosmolet acquisition.
The means your products are being recognized only when they're sold out of Matas stores. Before the acquisition, Kosmolet recognized profits on the sale of products to the Matas Group as and when that happened. As a result of the Matas acquisition of Kosmolet, during a transitional period, profits on the sales of customer products will not be recognized in the books of the Matas Group. This does not have any cash flow implications, but it has technically decreased the gross margin of the Group in particularly the second quarter. Please see note five to the accounts for further details. As the effect is a non-recurring, we have chosen to normalize for it in order to actually explain to you what happens with our gross margin underlying.
The normalized growth margin was 44.7% with the small drop of 0.2% compared to the same quarter last year being caused mainly by lower sales of sunscreen products in this quarter, as I already mentioned. On the cost side, overall operating costs before IFRS 16 rose by DKK 20.1 million. Added costs from Firtal and Kosmolet and special items in the quarter amounted to an increase of DKK 23.4 million. In addition, increased activity in our online business led to an increase in costs. Later in the presentation, Gregers will give a little more of a deep dive into the cost development. I won't talk more about it right now. EBITDA before special items was stable, as mentioned, at DKK 107.4 million against DKK 108.6 in the Q2 of last year. Adjusted net profit was also stable at DKK 61 million.
We saw a drop in the number of transactions of 3.5%. At the same time, we compensated by growing our basket size by 3.9% or five point and almost DKK 600. Overall, in the quarter, we continued to see traffic moving towards online, where Matas is very well positioned to serve our customers through both our matas.dk webshop, as well as through the webshops operated by the Firtal Group. In our physical stores, we continued to see declining footfall, which we were able to partially counter by an increase in basket size. With that, please turn to slide number four. On slide number four, we'll just take a brief look at the category performance in sales. In the second quarter, we saw the trends from previous quarters continuing, with beauty overall increasing by 3.5%. Beauty amounts to two-thirds of sales.
This quarter, Mass Beauty, however, saw sales increase by 2%, which is better than we've seen for a long while. While high end increased by 5%, which is a continuation of the trend we've seen. As you are probably well aware, Mass Beauty has been declining for a number of quarters, but we are pleased to see that our efforts to stabilize this category are paying off. Firtal sales increased by an impressive 29.6%, that, of course, was mainly due to the retail acquisition. Also, sales growth within Matas were positive, and this is good because this is an area where we've been putting more focus on growing the category. The Matas MediCare business, which is fairly small, decreased by 4.1%, actually primarily due to seasonal sales being lower than the same quarter last year. That's seasonal product, that is.
Finally, sales in the small MediCare segment increased by 2.5%. With that, please turn to slide number five. On slide five, we look a little bit on the longer-term development in revenue growth, gross margin, EBITDA margin, and the absolute level of EBITDA. The numbers pretty much speak for themselves, but I would just note the following. As to the underlying growth, Matas is now back on a growth path, albeit only marginally so. With regards to our underlying growth margin, the stable trend is continuing. Our EBITDA margin, the declining trend is becoming weaker than we've seen. Finally, on revenues overall, Matas is growing again, and we are beginning to see a stabilization of our nominal EBITDA, i.e., how much we are earning in Danish krone. With that, please turn to slide number six.
On slide six, we have shown the development in our cash flow and the level of inventories, one of the main elements of our working capital. Please note here the figures are all shown pre-IFRS 16. Cash generated from operations, including changes to working capital, increased DKK 16 million to DKK 63 million in the quarter compared to the same quarter last year. CapEx was a bit higher, growing by DKK 3 million year-on-year to DKK 39 million. CapEx was driven by investments in the Matas lifestyle projects, by investments in our new webshop in Humlebæk, and by ongoing investments in our business, for instance, in our online capabilities. Free cash flow rose DKK 7 million to DKK 13 million in the quarter. As to inventories, they rose by DKK 120 million when compared to the same quarter last year.
A big chunk of this, around DKK 75 million, were directly related to the acquisitions of Firtal and Kosmolet, as well as the establishment of the new workshop in Humlebæk, while the remainder was primarily caused by the introduction of new brands into the business and of line extensions. With that, please turn to slide seven, where Gregers will talk about our strategic program.
Thank you, Anders. This quarter, I will comment on three of our five strategic pillars. The strategic pillar relating to online. As you know, our ambition is to position Matas to be the undisputed market leader in the online space, to be the first choice for customers online as well as offline. The second one is our strategy for the store portfolio, where we are working to renew and consolidate our store footprint. Finally, I will give a bit more detail on the strategic track that we call Change How We Work which is all about taking out efficiencies in the business. Please turn to slide number eight. As for online, we have been quite aggressive from the beginning that we want to be number one and the first choice for consumers.
The first step was to fuel our organic growth on matas.dk and make sure that our omni-channel proposition is working well. We are now in a position to say that we are number one in the beauty and wellbeing space. We have seen continued growth in 2018-2019. We saw 54% growth on matas.dk, and in the first half of 2019-2020, we saw 59% growth on matas.dk. We don't have firm numbers on the market development. We estimate that the market overall grows between 20%-25%. As you can tell, we are very significantly outgrowing the market pace for the online segment. Step two in our online strategy was the acquisition of Firtal. We have completed that acquisition. We have Firtal fully in the numbers now, and I'm pleased to say that performance with Firtal is as expected in our investment case.
We see that the team are as strong as we hoped they would be, and we see a continuation of their business along the lines of our investment case. Also, the synergies that we aim to realize on purchasing and on marketing, we see on track, and we are firmly number one in the Mass Beauty space with the acquisition in Firtal together with Matas' position. It doesn't end here, and there is a long way to go on the online business. Our aim is undisputed market leadership to be the first choice. On the basis of the results that we have seen, we will increase investments in organic growth, both in Matas and in Firtal.
We also see that the Firtal platform is strong and that we can bolt-on acquisitions, make small size bolt-on acquisitions with very short-term payback, and that is something that we have in scope going forward. Overall, for online, we have increased our CapEx allocation to make sure that we succeed on this very important strategic track. Please turn to slide number nine. In the quarter, we have been able to make the first evaluation of our Matas Life store concepts, and the purpose of the test that we have been making is to decide what kind of rollout we should do. We have opened 10 Matas Life stores in existing or new locations, relocations that is, from March to July, and we have opened five additional stores in October. It's still early days, but we are now able to evaluate the store performance on three parameters.
First, we gauge the customer response by very systematic, qualitative, and quantitative follow-up. Second, we look into every local market to assess what's the right thing to do in each of the places that we have stores. Obviously, we look at the full set of financials, whether it be sales uplift, changes to the mix or what it costs to operate the stores so that we have a clear picture of the financial returns of our investments. We are now able to draw a few initial conclusions. The first one is related to store mergers, relocations, and expansions.
We have a number of cases where we have maybe two stores in a town, and we see that we get very solid financials from full Matas Life openings when we merge, relocate, or expand a store, so we're able to deliver to that town a better assortment, better service than before. That has increased our appetite on consolidation of stores. We will spend the CapEx that we have expected on these kinds of remodels, and you should be aware that this takes a little bit longer than just redoing the stores that we already have because we need to find the right location, and we need to negotiate with the landlords to make sure that we get the support from landlords to co-finance store investments. We are optimistic about that, and we see a number of opportunities to do that.
Second conclusions for the one-to-one store upgrades. We see two kinds of results from that. We see a number of stores, types of stores, and locations where we have a good case for modernizing one-to-one. We are also aware, and we see an increased willingness from landlords to co-finance investments in doing and making these stores more attractive, and we don't want to rush it. We really want to make sure that the changes to conventional retail and the openings or the opportunities to get better lease terms are something that we negotiate when we decide to invest in a store. What we also see is that in some types of stores, we can get the same kind of results with a lower CapEx, so we don't need to do a full makeover of the store to get better results from the stores.
Overall, we're going to spend less CapEx on one-to-one upgrades going forward. We plan seven additional Matas Life stores for Q3 2019 and 2020, and we plan up to 10 stores in Q4 1920. This decision on the Matas Life concept is what lies behind our lowering of the CapEx estimate for the year. Please turn to slide number 10. Since we announced our strategy, we have had a track in our strategy related to our Change how we work, focusing on cost saving and efficiency gains. In Q2, we saw those initiatives kicking in for the first time in a significant way.
The purpose of that is to make sure that we run our existing, our classical business with more and more efficiency and effectiveness to make sure that cost at store level develop in line with sales, and to make sure that our HQ overall doesn't outgrow the sales long term. For the year, we expect a result or an effect of DKK 25 million for this financial year, and the benefits of this program will carry forward into the next financial year as well. The savings come primarily from stores, but also cost at HQ are being targeted. If we start by focusing on Q2, slide 10 will show you how overall operating costs before IFRS 16 rose at DKK 20.1 million in the quarter, and as Anders mentioned previously, costs from Firtal and Kosmolet, as well as special items in the quarter, led to an increase of DKK 23.5 million.
In addition, our efforts to drive further online growth carried with it some extra costs. The implementation of our efficiency program helped reduce the underlying cost base. Let me give you a bit more detail on that. If we look at the two kinds of costs that we have, other external costs rose DKK 1.5 million overall in the quarter. Special items in Q2 2018/2019 related to transaction costs in relation to Firtal Group, they were not repeated, as special items only amounted to DKK 1 million in this quarter, primarily related to the transaction costs in connection with the acquisition of Kosmolet, and not already accounted for in Q1. DKK 13 million of the increase is due to added operating costs from the Firtal Group and Kosmolet. The underlying cost fell around DKK 3 million on other external costs.
As for staff costs, pre IFRS 16, they were up 13 million DKK year on year in the quarter. Special items related to executive changes in Matas led to an increase in staff costs of 3.3 million DKK compared to 2018/2019, where there were no special items. In addition, we saw a 6 million DKK increase in staff costs from Firtal and Kosmolet. Underlying staff costs rose by 3.5 million DKK due to higher staff costs, primarily in Matas DK and the HQ, to support our online growth, and it was tempered by the effects of our efficiency program, as previously mentioned. As mentioned, we did expect our efficiency program to deliver further positive cost reductions in the second half of 2019/2020, and a full year effect for the financial year of approximately 25 million DKK.
Please turn to slide 11, where we will finish with a look on our financial targets for 2019/20. We have made two adjustments to our financial targets for 2019/20. First, we have narrowed the range for the overall revenue growth and like-for-like growth in light of a less positive sales growth in Q2 than expected. As a result, our financial targets for 2019/20 for these two items are an overall revenue growth of 3.5%-5.5%, previously 3.5%-6.5%, and an underlying like-for-like revenue growth of 0.5%-1.5%, previously 0.5%-2.5%. Due to the revised plan for the retail network adjustments, we have lowered our CapEx guidance with DKK 50 million to a level of between DKK 150 million and DKK 170 million.
Finally, the efficiency measures implemented in Q2 to reduce cost is expected to have a favorable impact of some DKK 25 million, as already mentioned, and the target for the EBITDA margin before special items is maintained between 14% and 15%. Summing up for the quarter and the half year, we have completed the first half year with a top line growth, albeit on like-for-like a bit short on our own expectations. We are very satisfied indeed with our online progress. We have seen the results of Matas Life and turned that into a rollout plan for this year, and we will continue to test and adjust and fine-tune the concept, and we start to see the effects of our efficiency measures as mentioned. Please turn to slide number 12. These were our comments for the quarter and the outlook for the year, and we are now ready for Q&A.
Operator, I hand the line to you.
Thank you. Ladies and gentlemen, we'll now begin the question and answer session. As a reminder, if you wish to ask a question, please press star and one on your telephone keypad and wait for your name to be announced. The first question comes from the line of Poul Jessen. Please ask your question.
Yes. Thank you. A few questions. First, just a clarification. The cost and the gross margin of the inventories of Kosmolet that is also impacting the EBITDA line, and that makes it the total of DKK 15 million in non-recurring numbers. Just to get it confirmed.
Yes, absolutely. We have normalized for it, and as it normalizes, we have lifted the gross profit and thus you get the positive effect also on EBITDA. That is correct. We think that actually shows what is underlying the business rather than what technically is in the business.
Okay.
Right.
The follow-up on that one is, you say it also will impact Q3. How much should we look for in Q3 and onwards?
No, I don't think it's going to be very negligible what effect it has on Q3.
Okay. On the cost cutting, where you say DKK 25 million on the full year, what were the status by the end of Q2? How much is left for second half?
We don't give that out specific, but we didn't see the full effect in Q2. The early stages of the effect, so it's DKK 25 for the full financial year with the majority coming in the last two quarters. As you will note, we do reserve the right to reinvest some of those DKK 25 million in online growth. It is a real savings.
Okay, it's a gross saving?
Yeah, it's a gross saving.
A question that's on the balance sheet is just, I can see that the lease assets are coming down by DKK 44 million quarter-over-quarter. Is that a consequences of fewer leases and that means fewer stores, or is it a consequence of you being able to renegotiate the rents downwards?
Let us just revert on that one. I don't have the answer right here to you. I think that some of it is just a technical development over time. As we move along, we have to do some depreciation on the app. Poul, let us revert to you on that one with a more precise answer.
Okay. For now a final one, and that's on the CapEx program, where you say that higher CapEx for online, you say lower CapEx for upgrades, and then as expected on mergers. You change the current year guidance. Can you comment on the total CapEx guidance you're giving over the three-year horizon? Is that unchanged, so it's prioritization-
Yeah
reallocation between the three different use factors?
That's correct. The overall investment program for the strategy period remains the same. We have recalibrated. You are right in your assumption that that is unchanged.
Okay. I'll step back then.
Thank you. The next questions come from line of Alexander Edelman. Please ask your question.
Yes. Thank you. A few questions from my side. The first question is, the 2% decline in your physical stores set on a like-for-like basis? That's the first question.
A 2% decline?
Yeah. You have lower revenue in your physical stores compared to last year. Is that because maybe you have closed some stores, or is that on a like-for-like basis?
No, there is a small closure of stores. Let me just see exactly what number you're pointing to, Alexander. Let's see. Is it?
What exactly number are you pointing to? You're giving some numbers on your physical stores revenue, which declined in this quarter compared to last year. This quarter was DKK 715 million, compared to last year of DKK 732.
Is that because you're doing the numbers on back of the 87% of the 822.5? Is that why you're doing it, Frank?
I'm just taking the difference. The growth. You're taking out the online part from the total retail sales. Yeah. It's in Q4. Yes. Yeah.
No, there is a decline in the physical store sales. That is correct.
Yes. Is that on a like-for-like basis or the same number?
No, that is a total basis because this is the account. Closures will also affect this number, but closures is not the main part of what happens.
Okay. All right. Thank you.
Fair enough.
Yes. My second question is that your number of transactions declined 4% compared to last year. We also asked this before, but are you still not seeing a red flag in your physical stores?
No. The picture is exactly what we've seen before, and as you've also noticed, if you look at the numbers, we are closing down some stores, but we're not seeing the emergence of a huge red tail in our stores, no.
Okay. All right. Thank you. My last question for now. I think I was a bit surprised by your special items on DKK 14.6 million. I was just wondering if you could put some color to it on how we should actually understand it.
Yeah.
What is driving it?
It's driven, as we said, by the two things. The main part is not actually a special item. The main part is the normalization of the Kosmolet number, which amounts to about, I think, 10 point something, 10.4, I don't know, it could be DKK 10.1 million. That is what drives the better part of that. As I've explained, that is because technically, we have this problem with the way that sales are recognized from Kosmolet. That's a one-off until we start selling the products that we are taking into Kosmolet. There's a more technical explanation of this in note five.
The rest is just normal one-offs of like DKK 3.3 million in management changes, for instance, and DKK 4.5 million in the rest, which is, as I think Gregers has already mentioned, primarily because of some transaction costs concerning Kosmolet, which were in the count of Q1.
Okay. All right. Thank you. That's my questions for now. I go back in the queue. Thank you.
Thank you.
Thanks.
Thank you. Dear participants, once again, if you wish to ask a question, please press star and one on your telephone keypad. The next question comes from line of Poul Jessen. Please ask your question.
Yes. Thank you. I have two minor ones. On the future acquisition, if we look at the revenue numbers for the three quarters where we have numbers by now, it seems stable in the range of DKK 44 million-DKK 45 million per quarter from Q4, Q1, and Q2. Is that Performance in line with what you look for, or would you look for higher growth in the future business? Secondly, on Kosmolet, now that you include the external Kosmolet sales in the wholesale line, is that a very marginal number as that line is down to 17% year-over-year? I know that Club Matas is included as well, but how is it performing, actually? Thank you.
Yeah. Kosmolet is easy. The impact of Kosmolet in the quarter is marginal on the revenues, insignificant. As for Firtal, they perform in line with our expectations in the investment case. The category that they operate is slightly more mature online. They are hitting the numbers that we expect them to hit in the investment case.
A final one, and that's on the Mass Beauty, which now I think I could look back, it's about for three years, it's the first time you have a growth number. Is that because of your initiatives or have you seen a stabilization in the market, so you are now performing out of a new level in the market and then potentially growing? Is it the initiatives you have that is performing better than how the market is performing?
It is a bit of both. We haven't seen a structural change in offline competition for some time now. There is a new level, but at the same time, we have been working very intensely on the Mass Beauty category, introducing new brands, adjusting pricing, running our promotions differently. It is a mix of something structural and something that we are doing. As you know, sunscreen is actually a pretty big part of Mass Beauty sales. Underlying, it's actually a quite positive trend.
Okay. Thank you. That's all for me.
Thank you. The next question comes from the line of Klaus Alma. Please ask your question, please.
Yeah, thank you. Also a few questions from my side. The first is these special items. Excluding this normalization, you have around DKK 4 million in special items. As I understand these, that is the one driving the DKK 25 million cost savings. Is that correctly understood?
It's actually not related to the 25. It is a management change for the major part of the DKK 4 million, DKK 3.3 million is related to a management change. We slimmed down our management team.
That will give some savings going forward, or?
That's correct.
What is the nature of these DKK 25 million?
It's primarily running the stores more effectively. Actually since the beginning of the strategy period, we've been working on our operating model for the stores. The way we run the stores, basically, what we spend time on, how much time do the staff in store spend in front of the consumer as opposed to in the back room. That is one and the major part that we are doing things differently in the stores. The other part is that we on headquarters, we're starting to see some benefits of some of the investments that we do in tech that we can run some processes smoother than we've done before.
Okay.
This pertains particularly to our campaigning efforts.
Sure. That means fewer people in the store and fewer people in the back end of the store. That's how it works.
That's correct.
Okay. Second question regarding your CapEx guidance. Now you're delaying these investments or upgrades of stores, as I understand. I thought it was very necessary to upgrade the stores as quick as possible. Maybe I was wrong on that one.
No, I think what we've said all along is that we will test first, and then we will decide on the rollout plan to make sure that our investments pay off.
Klaus, it is still early days to evaluate a concept, but we do see some very clear conclusions. When we do the mergers, the relocations, the expansions, we get a good return, and we want to do more of those. When we do the one-to-ones, the picture is mixed. We see some places where it makes sense to invest in the stores, but some stores we can upgrade at a much lower CapEx. We don't need to do the full remodel. We can do more of facelift type and get the same kinds of results. It's actually just a matter of learning from what we're doing and then deciding on a roll-out plan based on the specific test results we're getting.
Okay. It means that.
Also overarching, Klaus, obviously we're seeing online growing faster.
Therefore, we want to put more money into the online investments. This is something we've said all along, that we haven't got like a five-year fully fixed investment plan. We want to be able to allocate CapEx to respond to the market trends.
Sure. That makes a lot of sense. Could one speculation at least be that given the very strong online growth and maybe a decline in the store network, that maybe you are preparing to do less investments in the store network, or at least in part of the network?
Yeah, I think overall the balance is changing towards more online investments, fewer offline investments, but it's based on the test results that we see that there are some store investments that makes perfect sense, and we will continue to do that. We will stretch it out probably over a bit longer, also to get the support from landlords, because quarter by quarter we see more willingness to support the changes in the physical retail environment. We want to make sure that we get those gains and we don't rush it. We want to make sure that we get landlord support for the investments that we're making in the stores.
That makes a lot of sense. These investments online, what is that? software or warehouse or?
It's two things. In the quarter, it's two things. Overwhelmingly, it's software investments, but in this quarter, we also opened a webshop to make sure that we can handle the volumes that we're seeing online, going towards Black Friday and the Christmas. We opened a new webshop in Humlebæk that separates out the operations of our online stores from our physical stores. That will help us deliver to the customer faster, and will actually help us get the cost per order on the online transactions down.
Okay. Thank you so much.
Thank you. The next question comes from the line of Alexander Edelman. Please ask your question.
Yes, thank you. You achieved 0.3% like-for-like here in Q2, which implied that you got 0.5% in the first half of 2019. Now you're guiding for, I think it's about 0.5%-1.5%. This implies that you at least need to do around, let's say, 1.4% like-for-like growth in H2 or the second half of the year. What's going to drive this like-for-like growth? Should we believe that you're actually able to achieve this number in H2 since the comparison is going to be a bit tougher? You had a strong Q4 last year, and also Q3 was pretty strong last year.
Yeah. A few underlying things, and whether you want to believe it or not, that's up to you, but we believe it. The underlying things are there's one more trading day in Q4, and the other thing is that we see THL coming into the like-for-like numbers because we completed the acquisition of THL middle of November of last year. Instead of contributing with inorganic growth, they now contribute to our like-for-like growth from December of the Q3 and fully in Q4.
Okay. First off, is that going to be the main extra driver compared to your normal business?
No. It's a number of different things.
Okay.
Those two things are structurally different from last year, and both of them provide a push in the right direction.
All right. That was my last question. Thank you.
Thank you. Dear participants, once again, if you wish to ask a question, please press star and one on your telephone keypad. Dear speakers, there are no further questions at this time. Please continue.
Thank you for taking the time to listen in to our Q2 results for 2019/20. You can reach out to us later, as always, if you have any follow-up questions. Our next results update is the trading update on the Christmas quarter. It is due on the 8th of January 2020. Have a nice day. Bye.
Bye. Thank you.
That does conclude our conference for today. Thank you for participating. You may all disconnect. Have a nice day.