Hello, and welcome to the Agfa Q1 Results 2021. My name is Josh and I will be your coordinator for today's event. Please note that this conference is being recorded, and for the duration of the call, your lines will be on listen only. However, you will have the opportunity to ask questions at the end of the call. This can be done by pressing star one on your telephone keypad to register your question. If you require assistance at any point, please press star zero and you will be connected to an operator. I'll now hand you over to your host, Pascal Juéry, CEO, to begin today's conference. Thank you.
Thank you very much. Good morning, everyone, and welcome to the Agfa Q1 results call. I'm sitting here in Mortsel headquarters with my colleagues from the executive committee, Dirk De Man, our CFO, will share the presentation with me. Obviously a very contrasted first quarter for the group, I would say a rather seasonally low first quarter. On the positive side, solid evolution, solid margin performance by HealthCare IT and Digital Print & Chemicals divisions. On track for growth, these activities are either already in growth mode or close to it, like DPC. We are seeing a volume recovery in most of our business areas, including Offset, sequentially, is improving. However, in this quarter, we had a very weak, in fact, Radiology Solutions business. Our volumes were weak. I'm telling you right now that this is a weak quarter that will not repeat itself.
Already in Q2, we are seeing a significant step up in our business, whether it is Film or our DR business. I must say the first quarter was quite low for a number of reasons I'm going to come back to. We are continuing our very strict cost reduction programs. You will see SG&A are continuously going down. At the same time, that's also probably one of the major message I would like to give is that we are facing cost inflation headwinds across our businesses, with the exception of HealthCare IT. Most of it, we are facing them in Offset. We estimate the overall raw material, packaging, freight, and overall cost inflation to be EUR 50 million for the group. We already have launched significant price increase programs, especially in Offset, but not only in order to mitigate this cost headwind.
Obviously, we'll need more along the years in order to be able to maintain our margins. We have continued with a very disciplined working capital management. Actually, our working capital at the end of the first quarter is lower than the end of the year, which means also even in a weaker quarter in terms of margin, we were able to be positive free cash flow before the extra pension funding that we are continuing, as you know. Now let me walk you through a bit more to the numbers. You've seen, and remember that we are still comparing ourselves to a pre-COVID-19 activity last year. Q1 2020 was almost, I would say, non-affected by COVID-19. Our sales, excluding currency impact, are -6%. As I told you, DPC and HealthCare IT, rather positive.
Offset recovering but still below last year. Radiology significantly below last year. SG&A under control, -8% compared to last year. R&D, we kept constant. EBITDA, obviously very much impacted by the weak quarter in Radiology, about 4% of sales. EBIT that is in fact at more or less zero level. If we go below EBIT, you will see restructuring and recurring, not a big impact during this quarter, therefore, relatively limited loss from our continuing operation in this quarter. Overall, top line, 6% below 2020, which I remind you is a pre-COVID-19 quarter. HealthCare IT, positive growth. As you know, we are more today chasing profitability improvement, but we are very pleased to see that we could get some momentum also in our business, that's a positive sign for us. You will see overall, we are pleased with the evolution of the business.
DPC in line with what was the pre-COVID quarter, in spite of the lockdowns that are still impacted activities like sign and display for our inkjet business. Our chemical businesses are already well above last year and growing. Offset Solutions improving sequentially, but Radiology Solutions was the main issue for us in terms of volume decrease, Sales decrease of about 16%, more for film. DR almost in line with last year, I would say.
Overall, gross profit margin declines from the impact of Radiology Solutions. Radiology Solutions is the most profitable part of our business and of course, we are suffering from the mix. As well, we are starting to see in the first quarter the cost inflation that is impacting across the board. At the same time, we are also suffering from a negative currency impact from the group. The weakness of the dollar is much weaker than last year.
For the renminbi, it's a mixed picture because we buy in renminbi also from our operations in China and sell in EUR or USD. China is also a significant end market, so it's a more balanced, I would say, situation. HealthCare IT and DPC continue to improve profitability. You will see that for HealthCare IT, we are on track with what we told you, and we are encouraged by the development that I'm going to share with you in more details. DPC as well. DPC is also impacted by the cost inflation. In spite of this, we continue to improve profitability. The issue of the quarter is Radiology Solutions impacted by China, but not only. China is only a third of our sales. We've seen weakness in volumes across geographies to be clear.
A very slow start of the year, impacted by COVID-19 in some countries still today, but also a more pronounced seasonality overall of our Radiology Solutions business. Offset, well, all the cost improvements are delivered, today are a bit eliminated by the cost inflation and the currency impact for the business. We took action already on price. There is a certain delay in terms of contract management in being able to reflect higher costs in our contracts. Some of our contracts, about 50%, are indexed. You see the impact with a quarter delay of the cost increase. It's going to come. For the rest, we've been very active increasing prices, as you know already. We'll probably have to do more in the next weeks or months as we are continuing to see an increasing trend for raw materials in the business. Positive free cash flow.
Maybe, Dirk, I will turn to you, and you will comment on this slide, please.
Thank you, Pascal. Good morning, everyone. Indeed, a good cash flow quarter. As you can see, we had about EUR 38 million of adjusted free cash flow, driven also thanks to strong performance in the working capital. Despite what we normally have, a seasonal buildup of inventories in Q1, we turned out to still have a positive contribution in terms of the cash flow. CapEx is a bit below average but normal for a first quarter, and of course, provisions and income taxes come on top. The EUR 38 million, part of that, obviously, we need to pay for the pensions. The regular cash outflow for pensions is around EUR 14 million.
There is some cash restructuring, which is primarily related to the projects of 2020 that are being executed still in Q1, leading to a free cash flow of EUR 16 million before extra contributions to the pensions. I will come back to that later. Indeed, in the first quarter, we did the contribution to the Swedish pension plan, which as a result, will be totally eliminated from the balance sheet. Net, we come to a zero free cash flow. If we move to the next slide, you can see that also the net cash position remains more or less unchanged versus previous quarter at a very strong level. In terms of the pensions, as you know, the plan we announced last year is to overall use EUR 350 million for the pension plans, reducing both liabilities but also de-risking.
As you recall, in 2020, EUR 218 million of that was injected. In Q1, we did this elimination of the Swedish pension plan. It's one of the non-material countries, but we were actually able to totally eliminate the pension plan with that contribution. That's not anymore Q1, but in Q2, in April, we also contributed EUR 103 million to the U.K. pension plan in support of a buy-in program, which was successfully placed in April. The total buy-in will de-risk a total amount of EUR 260 million. It will not be eliminated from the balance sheet, the liabilities, but will have an offsetting asset that will be totally following the liability, basically a full de-risk of the U.K. pension plan, which is also a good step in the long term, in case you want to go for a full buyout at one point in time.
We expect to have the whole pension plan completed in Q2.
Okay.
We are still finalizing with the actuaries all the final calculations. We expect that we can give you an update with the Q2 results of the total program and the implications it has. For now, I would already like to give the guidance in terms of the cash flow below EBITDA. We expect it to be around EUR 52 million cash out in 2021. Just for reference, in 2020, that was EUR 16 million. We are already going on a path of a reduction of reduced pension cash outflows. I'll hand back to Pascal to discuss the rest.
Thank you, Dirk. That's a good evolution. Especially going forward on the cash outflow for the pension. Discipline working capital, we have decreased our working capital compared to the end of the year. Percentage of sales is the same. As you know, we have always seasonally a strong fourth quarter and a much weaker first quarter. Expect the same profile as last year in terms of managing the working capital. Probably an increase during the first half of the year. Then we will get it back to where it needs to be by year-end. We are doing that in order to optimize the way we organize our production schedule in a year that was still not a normal year in terms of, I would say, COVID-19 measures. That's clearly under control.
HealthCare IT, the numbers, as I told you, excluding currency, most of our sales are in U.S. dollar in North America. We've seen a growth. We're improving the gross profit of the business as well as the Adjusted EBITDA, almost 12% of sales, a significant growth versus last year. Very pleased overall by the evolution of the business. We continue to implement our enterprise imaging system, and we have very smooth go- lives in many geographies, especially in Europe, but also in the Middle East. In Europe, I want to mention the Leeds Hospital, which was a very good project for us, for the NHS. What I want also to stress is not only do we deliver good numbers, but we have also actually an order intake dynamics which we like.
It's the third quarter in a row where we see our order intake picking up with the right mix of projects, which is also very important because as you know, we engage in specific projects. We like our order intake evolution and the order book is still at a very healthy level, and we're happy also with the development. We are also very happy to have been recognized externally. It's the first time in a few years, actually, by KLAS, which is the market research institute in North America on this subject. They classify Agfa as the most ready for enterprise imaging, which is an external recognition coming from the fact that now we have a stable technology which is well appreciated by our customer base, and we have proved that we can handle very significant implementation and deployment at customer level with full satisfaction, I would say.
We are very happy with that. Again, our strategy remains a focused strategy. We engage at specific customer accounts in specific geographies, and we engage in specific projects for us. We keep this daily discipline, and this is the reason why you see a steady improvement of this business, and the steady improvement will continue throughout the next quarters. I'm saying basically that we are on track in our journey to reach the high teens EBITDA within the next three years. Happy about the development of the business. Now, Radiology Solutions, which is quite a contrast without a play on words, because indeed, it was a very difficult quarter, - 16%, - 14%, including currency.
Tremendous impact on the gross profit coming from this lack of volumes and mix, and therefore, a very subdued EBITDA level in what is clearly today a very profitable business for the group. The reason for that, overall, as I said, typically, Q1 is a slow quarter for Radiology, but this year it was much slower than usual. DR also, which was a positive growth engine for 2020, had a more subdued quarter in Q1, rather flat compared to last year. It didn't make up, I would say, for the decline of film. Medical film, volumes are impacted, as I said, in all geographies. China, the situation is a bit different as there is a change in the procurement process that also involves a bit of, I would say, destocking due to the uncertainty, and therefore our volumes were lower than expected also in China.
We are already, I would say, almost mid-May, and we've seen already in March and even more so in April, a very significant pickup of the activity in Q2 in film and as well as DR. I don't want to leave you the impression that this is the new state of the business in Radiology. Absolutely not. It is rebounding very strongly, but it's fair to say that Q1 was very subdued. DPC, rather a positive quarter. Some different dynamics in the different activities of this business. Overall, back on track to last year and better in terms of profitability. This is a trend that we expect will continue over the next quarters. The reason being, inkjet, which was a bit below in terms of recovery because a significant part of our business is linked, I would say, to commercial activities and events.
It was strongly impacted during COVID time. I'm happy to say that the equipment order book has been steadily increasing for the past months. Today it's almost back to pre-COVID level, not quite so. The good news is it happened even in a situation where we cannot entertain our customers in our demo rooms first. That's a good sign and on top of that, the mix is favorable because it's tilted to the high-end equipment of our range, which is for us a very positive sign. Positive signs also, we have our first successes in industrial markets like decor printing and leather printing. Overall ink volumes have been now, I would say, overall back to pre-COVID levels, which is a very positive sign as we were still in lockdown in a lot of countries. Electronic print overall growth.
Hydrogen membrane sales pipeline reflects, of course, a very strong growth. Not yet material for the group. I expect the membrane business to start being, I would say, material for the group next year. Today we have a very exciting sales pipeline at a number of customers. As you know, the hydrogen world is bubbling with projects, and Agfa is present in all projects related to alkaline electrolysis green hydrogen production. Specialty film and foils below last year. The reason being key markets are industrial markets that are still not fully recovered, like aeronautics and oil and gas. We expect to recover partially during the year. Overall, better profit. The division is also impacted by cost inflation, and we will also put price action or have put already price actions in place to mitigate and pursue the improvement of profitability. Offset.
The good news for Offset is actually volumes have continued to recover. We are not expecting to ever get back to pre-COVID-19 level in this business. I must say the volumes of the first one were encouraging. The issue we are facing is a significant impact of cost increase and currency headwinds in this market, which kind of at the end of the day eliminated most of the cost actions that were put in place. Again, as already explained here, we have strong price actions in place that will develop through the year. We're continuing also our cost journey and we continue to review our go-to-market. We have several initiatives that will be implemented in the next months that we will share with you in due time.
For me, the clear way out of restoring profitability today is our ability to increase price in this market. With the first price increase that was announced a few weeks ago, I think this is a common issue for the whole industry. We've seen also other price increases initiatives in this market, and we will continue to lead the recovery of Offset. Overall outlook after this really subdued Q1, we expect the business volume recovery to continue throughout the year and starting of course, with Q2. We are continuing cost reduction programs. We are doing that on a continuous basis, and we will share with you any specific initiatives we might launch during the year. Of course, as I told you, the first priority is price management in order to face the cost inflation. Believe me, we are taking a lot of actions in this area.
I confirm the growth of HealthCare IT and Digital Print & Chemicals. I think for us, if anything, what we want to achieve is to be able to accelerate this growth. Offset is improving but is now under inflation pressure, price will be the way out of it. Radiology Solutions Substantial recovery in the next quarter.
Pascal, if I may, I just wanted to add in terms of the cost savings programs, that we also wanted to adjust our guidance around non-recurring and restructuring.
Absolutely.
We expect this year to be around EUR 40 million in terms of the P&L charge.
No, it's a good point. I think it would have come probably through the Q&A. Last quarter, we had this question, and we indeed wanted to come back with a more precise answer. We are continuing indeed to spend restructuring in order to lower the cost base of the group. Before I open for questions, I want to share with you our sustainability policy. We have put in place today a sustainability roadmap with, I would say, an ambition, a five-year objective, and a one-year objective. I will have the opportunity to share that with you in more details in due time. Already we have defined material goals for our business. Actually, the first one is about diversity and inclusion as well as safety. These are two areas for which we have a specific roadmap. We are also working on sustainable innovation.
We want to make sure that every new generation of products we place in the market represents a significant progress in terms of sustainability, and we are starting to assess our innovation portfolio accordingly. We will also initiate an ESG rating with a third party. We have not yet selected the third party, but it's going to come in order to be able to have a third-party assessment of sustainability roadmap. On a continuous basis, we are reducing the impact of our operations in terms of footprint. Here the main objective for us is CO2 emission. We are about to start actually solar panels in our Mortsel site, which are already there, and will start producing electricity for the site on the 1st of June. We have a number of industrial initiatives at our site to reduce CO2, and we have created a CO2 reduction roadmap.
I wanted to share that with you today. We have not only a policy in place, but a sustainability roadmap with yearly objectives and probably in a few months, I'll come back to you and share these objectives and how we are doing regarding these objectives. Sustainability is a very top priority for us as well. That's what I wanted to share with you today. In a nutshell, a complex quarter in terms of business, especially for radiology volumes. Also, I would say, the cost inflation that's coming our way means we'll have to implement a lot of pricing action in an overall context where I must say that the recovery of volumes is confirmed, I would say month after month in most of our businesses, and whereby we are confident going forward with the evolution of our two growth divisions of DPC and HIT.
I'm going to stop here and I will take the question of the analysts. Please.
Thank you very much. If you would like to ask a question or make a contribution on today's call, please press star one on your telephone keypads now. Please ensure your line is unmuted locally and I will then introduce you into the call. So that is star one on your telephone keypad now please. Our first question comes from the line of Guy Sips from KBC Securities. Guy, please go ahead. Your line is now unmuted.
Yes. Thank you. I have three questions. First is on Radiology Solutions. Can you elaborate a little bit on what you call new centralized procurement practices? What is behind that, how should we see that? What is the potential positive impact going forward of this? Second is on Offset Solutions. Can you give us an overview of the dynamics in the market that we now saw for the first time, Fujifilm, the latest to increase prices starting May 1st? How important is this that, as well, Fuji is now implementing the higher aluminum prices that this cannot be longer absorbed. How do you see these dynamics going forward? On these restructuring costs, the EUR 40 million, how is that spread over the year? Is that skewed to the end of the year, or is it equally spread over the different quarters? Thank you.
Thank you very much, Guy. Radiology Solutions. China, in fact, there is a change in the procurement practice in China, whereby procurement is now being organized by region, by provinces, whereby it was more decentralized before. That creates a bit of a disruption, if you want, in the way the procurement is organized. That is what we are seeing right now. It has an impact because basically either you lose or you win a province. At the end of the day, I am not expecting necessarily a tremendous impact in terms of volume, but it is not going to be organized the same way it was before. It is a little bit unclear for the time being, as the system is being implemented. Only a few provinces have been going through this system. We won some, we lost some. We are in this kind of in-between situation.
At the end of the day, the China market remains the first market for hardcopy films and the first market for Agfa. We were in the process of rebuilding our market share after changing our go-to-market a few years back. We have now to adapt to a new system in order to get back. But there is no change in the film consumption whatsoever at this stage in China. It's a disruption due to this change of process. That's for China. Offset dynamics in the market. Well, I already had the opportunity to say that clearly, the industry as a whole has a challenge in the Offset. Last year, you remember we were in negative EBITDA in this business. Clearly it's not a specific Agfa issue, it's an industry-wide issue.
There is no, I would say, competitive difference in the cost to make digital plates between a Fuji or an Agfa, or a Kodak for that matter. Clearly we want to lead the market. We were the first to announce what is necessary for the industry, given the increase of aluminum. Not only aluminum. All chemical raw materials are increasing, the freight is increasing, the packaging is increasing. The cost inflation is not just only aluminum, by the way. Does it mean a new dynamic? I think the industry has no choice. Has no choice at all. With what we are facing for Offset, and I told you it's about 50% of the overall cost inflation for the group, or EUR 25 million. We see aluminum prices still going up today.
Therefore, we need to increase price, and we will probably continue to do so over the next weeks and months. Change of dynamic? Yes. I think this is the first time ever that, at least as far as people can remember, that Agfa is doing a general price increase in the market. I must say, I've seen the announcement of Kodak and of Fuji. It seems that the whole industry is facing the same challenges, which is absolutely a normal for me. Change of dynamics, yes, because it's the first time in many years that prices will increase in Offset. The EUR 40 million-
Yeah, I think-
I'm not sure it's easy to give a quarterly guidance.
The best way to respond is that it's going to be spread over the year. I would not give any other guidance at this point in time.
No, we wanted to give you an idea of the overall amount. Now it's more complex to give a spread. EUR 40 million for a quarter.
There's three left.
Okay. Thank you.
Our next question comes from the line of Maxime Stranart from ING Bank. Maxime, please go ahead. Your line is now unmuted.
Thank you, good morning. Three questions from my side as well. First of all, in radiology, is it possible to quantify the impact of China of COVID-19 in Latin America and India and the rest to have a broad view of what is the main building blocks in the decrease in EBIT? Secondly, in terms of outlook, you previously mentioned that you expected the pension deficit to be below EUR 700 million by 2024. Is it something you still confirm? Secondly, for 2021, is it possible to have a more quantified view on what you expect? Finally, to rebound on Guy Sips' question on restructuring initiatives, is it possible to have a better view on what you exactly intend to implement and which division it will impact? Thank you for your answers.
No, thank you very much, Maxime. On radiology, it's a bit difficult to be that granular, but let me tell you that when I look at the volume impact of the film for the first quarter, China is a third of that. Actually, I told you it was across the board, the volume weakness, and that is behind us. It has already come back. There are specific reasons for this. For instance, in Southeast Asia, the yearly contracts take a bit of time to be negotiated, meaning we don't sell during the first two months of the year, and we start selling in March after the contracts are in place. We've got that kind of impact as well. China is not the full story, it's about a third of the film weakness. The outlook of the pension, Dirk, 2024, below EUR 700 million?
Yeah, I think the guidance still stands, but as I mentioned, we're going to give an update in Q2, which summarizes all the effects, because obviously between the previous time we mentioned that, we still had a revaluation at year-end, which always has an impact on what the net position is. We will give an update in Q2. Let's say all things being equal, the target still stands. Obviously there was a revaluation in the middle, so we need to assess those impacts.
For the restructuring, Maxime, I wish I could share that with you, but you understand that restructuring is always linked to social process somehow. If we do restructuring, it means we are going to impact somehow our people, and therefore, I'm sorry, but I cannot share with you our precise plans for what we are going to do in the next quarters. You're going to have to take our word for it. We have shown in the past that we are not shy of doing this. We have announced projects, by the way, already at the end of last year. We will announce probably more projects in the next month, but I cannot share with you the nature of this project for this reason.
Regarding the quantified outlook for the year, I'm not giving a number guidance for the year for the simple reason that I think we are still in a kind of a flux in terms of raw materials and pricing. We have a lot of actions and a lot of moving parts right now, and I want to have a little bit more visibility on the rest of the year before being able to guide more precisely. As I told you, Q2 is a kind of back to normal quarter, I would say, for radiology. The rest, I mean, DPC and HealthCare IT will continue their course. Offset, we will see probably a first impact of the price increase, but also an increased impact of the cost inflation.
Perfect. Noted. Thank you for your answers.
Our next question comes from the line of Kris Kippers from Degroof Petercam. Kris, please go ahead.
Yes, good morning, and thank you for taking my remaining questions. Firstly, coming back on the price increases which you're pushing through. Just for my understanding, what is the current delay that you face in this part? Is it a couple of months, two months, or are you playing a bit short on the ball with the current hike we're witnessing? Second question would be coming back on the non-recurring charges. Could you share with us what the impact on the cost savings is actually for the year and afterwards? Regarding also the cost SG&A, we saw an 8% reduction. Which part of that is structural and which part is temporal? Thank you.
Very good question. Thank you, Kris. Well, the price increase, the short answer is we have different situations. As I told you, we have indexed aluminum contract in which we have a quarter delay in implementation through the contract. That's the way it is. When we don't have a contract, we can increase prices almost, I would say, immediately. When I say immediately, it's a few weeks delay. It pretty much depends on the contractual situation. Overall, yes, when you implement a price increase, it takes a few weeks or a few months in the worst case to take hold, and depending on your contractual situation. Luc for Offset, you can comment if you want further.
Yeah, Pascal, I think you said everything. For instance, in Europe, which is a very important region, you may say half of it is what we call net of alu. That means the aluminum increase is foreseen in the contract, so it goes, so to say, automatically. In some cases, there is a delay foreseen in the contract because not having the fluctuations immediately. For the rest, we have to look at each and every contract, and we are pushing hard to increase these prices because let's not forget that in Offset, the printer can recover this increase because once he has used the plates, he will sell them to a scrap dealer, and also these prices are going up.
For the aluminum.
For the aluminum.
A typical situation is a 30-day notice for a pricing contract. You've got a month of notice, I would say. That's for your first question. Non-recurring impact, Dirk, you want to take this one?
In the non-recurring restructuring, there's two pieces of that. There's obviously a large part that is the non-recurring part related to the separation activities. Regarding Offset. That's structural costs, mainly ICS related, that obviously does not lead directly to cost savings. There's also program costs because we are working on different kinds of programs to find opportunities to reduce costs. I would say, in total, that's about half the amount we're talking about. The other half would be more restructuring related and therefore become ultimately effective in the P&L.
Regarding SG&A, to your question, I would say most of what you see is structural with one caveat. We don't travel, of course, very much still today. There is less trade shows and that kind of expenses. On the structure, most of what you see, a part was temporary last year. It's less and less this year because, of course, we have less and less of these measures of temporary unemployment and so on. We still have some, in some areas, but not as much. Actually the percentage of structural measures in the overall SG&A savings is becoming higher and higher.
Okay. Thank you. Just a small follow-up to be sure. If I look at working capital, which was stable in the quarter, 27% of sales if I'm not mistaken, is that something which might go up in view of the inventory or is that a small part only and won't evolve much?
The typical phasing of working capital, given our manufacturing footprint, would be that we will probably increase our working capital until the summer before winding it down in the second part of the year. In terms of inventory, of course, as raw materials are increasing, you will have also an impact on inventory as well. You will have an impact on inventory, sales price, overall impact. This is why I think the percentage of sales is the right metric for working capital. Overall, except the same phasing, maybe less pronounced than last year, but the same phasing in terms of working capital. A bit higher at the end of Q2 and Q3 and lower at the end of the year.
Excellent. Thank you.
Our next question comes from the line of Guy Sips. Please go ahead.
Yes. On the pension liabilities, can you give us an update on the sensitivity on the discount rates? What is the impact of 25 basis points increase or decrease of the discount rates on your liabilities? Thank you.
Yeah. Guy Sips, I think you can still use the guidance that we have in the annual report.
That's EUR 75 million.
Yeah.
For every 25 basis point that will not be impacted by the measures taken in the second quarter.
Obviously we'll recalculate the sensitivities once we have everything implemented. Right now, we're still in the middle of it. At year-end, we already had parts reflected, and the key thing will be on the gross liability, the sensitivity may remain the same because in the U.K. it's a de-risking, it's not an elimination. In terms of the net liability, the sensitivity will be completely eliminated. Hence, it will reduce in the future. We have not been able to recalculate the sensitivities based on the new structure.
Okay. Thank you.
Thank you. I think that we can conclude the call at this stage. Thank you very much for attending and have all a good day. Thank you.
Thank you very much for joining today's call. You may now disconnect your handsets. Hosts, please stay on the line. Thank you.