Earnings Call: Q1 2020

Apr 23, 2020

Good morning, ladies and gentlemen. And before we start, allow me to wish you and everybody not to be hurt by this COVID-nineteen virus, and I wish very good health. Welcome to the presentation of this Q1 2020 sales and for today for presentation and question and answers. I am with Laurent Delaberg, our group CFO. No need to tell you that it's a quite exceptional and very unprecedented circumstances. And I will start this call explaining how we are adapting to this environment, how do we implement all the measures to both protect our employee and customers as well as to continue operating and how all of this is impacting our Q1 performance. Laurent will then detail our sales performance, the cost measures that we have taken and obviously, all the other aspects of which the focus on liquidity. And then I will conclude with a look at the immediate priorities and actions. On the slide about after. You can see that, first of all, in the first days, before the quarter full vision. When on mid March, we were facing this COVID-nineteen, then the health and safety of our 26,000 employees became a major very high central priority. Within a few days, we pre implemented planetary measures. And even where the confinement and other measures were not decided by the local governments. And we choose a very little bit of here sorry, there was a little bit of pollution on the line. Immediately, we choose to operate sanitary and all, for example, distancing in our branches, in our DCs, in the contact with our customers. We immediately around the world implemented social distancing and further measurement. And immediately, we took actions everywhere in the centers. And we need a couple of days. We have asked thousands of people to work from home. We have asked people to reorganize the shift in the DC, not to cross each other, not to come together to each other. And the same in the branches, never to touch a customer, never to a customer touching us because we wanted totally as much as we could, it's never 100% sure, but the best sanitary way of operating. And in doing so, it was quite important because it has been applied across the world, across the board, and we created a crisis committee where all the best practices were available to everyone. And within a week, it was done. And the U. S. Were when they saw this in Europe, our U. S. Operation, they capitalized on this. They anticipated everything that we're coming to Europe and including there within 10 days, our total operations, plus the very strong IT infrastructure capability that we had just built before in the 2 years before, and using all the digital interfaces that we had already put in place, then we could make 1 third of group employee working from home, all the calls being taken from home, all the sales force, calling the customer and managing teams from home and having very fundamental elements in the digital transformation, very key to the customer, track and trace of where is my parcel, self check valve, driving services, the lockers and more of these things that we just had developed at the future model has proven to be fundamental way of doing business, continuing what the business for what the business could be and respecting sanitary measures. I am very proud of this reactivity that we were able to change everything. And no disruption, and the company was doing extremely well. And I would like to express, by the way, all my thanks and gratitude to all our teams for this remarkably reactivity and adaptability. And therefore, thanks to them, Rexel has managed to keep running in the face of a real crisis situation. On the page after, what does it mean? When within a week, everything which was the normal way of doing business, so to speak, everywhere around the world. Customer mix changed more than we ever thought it could happen. The channel mix change. How much traffic went through the web, through the AI, through the counter, through the telephone and change of habits. The country mix change. Everything on the third day, we were facing something very different. And even within the country, the regional mix was absolutely not, especially in U. S, but not just in Canada and also in Europe, in the country, the regional mix is quite very contrasted. Product availability. There were some shortage anticipated with the coronavirus crisis in China before that would impact the supply. Some have materialized, some not because of the lower demand, but it was also an unstability element. And on the demand side, the product mix was not what we were used to sell. A big runner of the week before, something that we sell by 1,000 every week at a sudden became 10 piece in terms of sales. And others, where it was only a limited numbers of rather low demand became a runner, a runner as a proportion to the rest. Human resource mix, who was able to work from home, who we had no need for immediately who we had to ask to be like a reserve shift. If something would happen in the DC, another partial team still at home would come in and take over, while if there would have been somebody with a virus would have to retrench and the entire team with it and go on confinement for 2 weeks and kind of adjustment that we had to do. And guess what? This is not just a change. All that I'm describing and you see on this slide is changing every single week. The mix is changing every week by how the virus spread, how the government decide on measures, which industry stop, which industry restart, which customer base wants to go back to work the one stays on confinement, how transportation does affect all of this, meaning this is weekly adjustments to a permanently changing and not by 1% to 3%. Is changing by 20%, 50%. It's big blocks back and forth and coming every day like this. And we have developed and we have developed, and I'm very proud that we have been able to serve every single customer for what the demand was, for the specialty products you wanted for in a very healthy way and in a change also in the way we were obviously serving by the contacts mode. On the page after, in a nutshell, There were changes which were quite strong. I mean, on one hand, something we became more obvious than ever before. Electrical distribution became an essential activity in many parts of the country to support the hospitals, obviously, but to support the Datacom industry to support a lot of food and beverage industry that they need to supply to support the cooling systems of every where everybody is going to shop and get the fresh food to supply so many places where we had to provide products to and through new kind of customer compared to the conventional installers we had because a lot of maintenance people, emergency maintenance, a lot of critical activities, elevators moving up and down and for which some of their own systems were no longer available as it could have been and so on and so on and so on. Therefore, we have put in place business continuity plans in all the countries. And we as you could see, number of French open, only 100, 110. Yesterday, 95 were closed. The rest is open under as with normal conditions, less and less and twice as many with, let's say, readjusted way as pick up points to the minimum. The nice thing is the next statistic is that we as you can see here, within 3 weeks, just take France. We gained 1888 new accounts, almost 1900 within a week on the web compared to roughly 100 per week in normal times. And this is proving that and I'm pretty sure that a portion of the market is moving to a new way of transacting. And obviously, the Europe Digital sales crossed the 30%. And you remember, a year ago, I would have told you 25. And in these numbers, you have a drop in EDI because large plants, large manufacturing sites in EDI because the stock EPI was short term being reduced. Therefore, the pure web has probably grown by something close to 10 points in a couple of weeks compared to the previous year. And sales by phone. Sales by phone, obviously, exploded just to have an indication, the phone traffic exploded, but the sales also because some of it went to the web, some of it went to the phone that everything else virtually stopped. And therefore, that we have a very heavily now infrastructure being able to cope with this. And we have a lot of traffic on the web increasing every day and so on. On the next slide, what was also very important, it was first, as I described before, make sure business continuity. It works. We serve. We are there. We are open. We continue to be, and we will continue to do so everywhere. On the other side, the demand is low. The mix is not exactly the same, and we had to face something that really, we didn't know how long it would last. And therefore, we adjusted our cost, our OpEx, and primarily in 2 categories. The salary and benefits, we have adjusted. And as you can see from these numbers, it's not a typo, 27% for sales down, 27% for salary and benefits down, in a crib. And a lot of local management had to take serious action, courageous management decisions, that it's something which we have adjusted. We have been using, obviously, all the support that the different governments made available to us. And on top and above, we had to take our own decision even if it was not done with support of the local governments or administrations. And in doing so, something we never did in the past. We I think we have shown our ability to be really fast adjusting to the level of sales. That service and benefit is only a piece of the equation. We also suspended CapEx. We also suspended any process of commitment of certain developments that we have put on hold. We have obviously managed all the rest that are non tariff and benefits of back, revisiting transportation costs, revisiting the lease costs, revisiting and renegotiating each of these elements systematically 1 by 1, and we continue to do so, not knowing how long it will last, the virus is still going around. Even if there is a deconfinance in certain places, it could come back in 3, 5 months. Therefore, we are being now fully adjusted in order to be on the cost base adjusted to the sales level and margin level. And obviously, on the page after, you can see how it went and fast. It's nothing new to you, but this is really our world, how from beginning of March, week 10, where we had a very good start in the quarter. The same day sales were plus 6.3%. March week 11, it's close to 0. 1st lockdown in Italy, Spain. The week after, minus 12, And a lot of countries in Europe is in the lockdown. And then week 13, the U. S. Entered into the shutting down locally before more generically state lockdown, states each being different. Therefore, you see this minus 27.8 percent in our sales and then a little bit bumpy, 1 week to minus 25, another minus 30. The Eastern Day is playing here a little bit of a role. Therefore, roughly, it's minus 20 7 minuteus 28. And this came very fast, and therefore, we adjusted at the same speed. On the page after in Europe was stronger and this impact was faster, stronger trading around, especially in the South than in the North. There are 3 countries which remain with a different no lockdown approach. Poland is 1 or limited. The Sweden is 1. And obviously, there were different it's a different philosophy and strategy, and we got a little bit less impact. And now we see the first countries like and I say 3 countries, I forgot the 3rd. We saw Germany. There was partial lockdown, but Germany was relatively resisting extremely well. And we have we were happy with the way we have adjusted and was we have been doing the business in this contrasted environment by regions that the North being less affected than the South, and this is true for the rest of Europe. And therefore, the numbers are contrasted. And in North America, uneven shutdown measured in the States. I remember 5 weeks ago still being in the States, And we were supposed to have a meeting in Seattle and Portland with all the guys and which we decided not to. I stopped in Dallas in our headquarter, and we were running by Visio and which was the beginning. And obviously, states in the Northeast was heavily impacted, but California also shut down similar to Europe's. And now there are other side effects to all of this, including the Gulf, which is not just the virus, which is also the oil and gas industry shut down. But everywhere, we have an impact and but it came at different moment. Asia Pac on the page after. Asia Pac, we follow carefully. One of the fundamental question is the curve of Asia Pac representative of our curve that we could see in Europe, we have our doubts because people be at differently. The virus was managed differently. Lockdowns mean really something severe. And when they reopen, then there is a certain restart. On the other hand, what do we see? Our OEM business where we focus on is doing great now. It's positive territory. There is a bit of a catch up, but there is also an internal demand quite strong because the Chinese companies have also learned that either the virus or something in the supply chain on one hand, they need to be equipped. Therefore, they go and if people are in lockdown, they try to be less sensitive to people presence. Therefore, they go immediately after all of this, they go for robotics, automation, OEMs, and this is where we end. And therefore, we see a nice pickup short term after the crisis. This is to give you, in a nutshell, the sense of what we have done, how we have managed safety, protect the people and protect the a relationship to the customers and to the suppliers in a healthy mode and protect the company, adjusting the cost, stopping the CapEx and adjusting to the level of demand. I will pass to Laurent on the slide after so that he can comment more details with you the Q1 2020 sales review and the COVID-nineteen environment priorities, and I'll come back after. Laurence, you could take over. Yes. Thank you very much, Patrick, and good morning to all of you. We'll start on Slide 12 with probably a bit absolute information and very far away on our Q1 sales, which was €3,200,000,000 and we are down 3.3% on a same day basis and minus 2.7% on a reported basis. Organic same day sales growth was impacted by a negative Sales were also impacted by a scope effect, as you know, as Gexpro service was deconsolidated as from February 23. And as a reminder, Gxpo Services had annual sales of around USD 260,000,000 with a slightly higher profitability than the U. S. And it's the consolidation has reduced our indebtedness ratio by 10 basis points. In the quarter, we benefit from a positive foreign exchange impact of +0.9%, many due to the USD. And we now anticipate the full year 2020 currency impact to be circa minus 0.3%, assuming spot rates remain unchanged. If we looked at our performance by region, Sales in Europe were down by 1.5 percent. In North America, they were down by 4.8% and in Asia Pac, they were down by 8.3 notably reflecting the strong shutdown in China in February. Moving to Slide 13. We take a closer look at our sales performance, breaking it down through February March and also looking at more recent trends. As you see on the slide, Rexel has gotten us to a very solid start of the year. We said up 0.9% through February or up 2% restating from China, which was strongly impacted by COVID-nineteen in February. March April were a different story and notably the second half of March as lockdown measures spread. In week 13, started on March 31, the 3rd same day sales were down 27.8%. And in the 1st 15 days of April, with most of Europe and the U. S. In lockdown, says we are down by 27.7%. By region, Europe was down 37% in the 1st 15 days of April, While North America showed better resilience, down 21.5%. Asia Pac was down 0.4, not happy to recent bounce back in China and a very good resilience in Australia. At this stage, we have no visibility on the duration and extent of the crisis, but we are taking all necessary measures to adapt it as I will detail on the next slide. Once organized for business in order to achieve as much sales as possible in the context of country confinement measures. We first said we have the first set of action as shown on Slide 14 related to OpEx, Which represent €2,700,000 in full year 2019. We are actively looking at reducing every cost category and every line. Let me share with you the breakdown of our PAGS by nature. Flexible costs account for circa 53%, including in that salary and benefits for a large majority that became flexible in this unprecedented time, thanks to the various government temporary unemployment measures available, but also to some cut and very strong decrease, as you can imagine, on travel and professional costs. Variable costs represent circa 25% and notably include sales commission, delivery expense and terms. Lastly, fixed costs represent 18% of total and include mostly building and occupancy of which leases classified under depreciation in IFRS 16 as well as IT and network communication costs that are essential to run the company. In order to adjust OpEx to this unprecedented drop in sales, We have taken several drastic actions, including reducing by 27% salary and benefits in April through first, the use of temporary unemployment measure all around Europe second, the use of flexibility in North America, including wage reductions, temporary loss or absence no pay policies. We have also deferred wages increase, for instance, in China uncurtailed travel under statement costs. Let me add that our CEO and Board members will cut their compensation by 20% as from April. Lastly, we are also acting even on fixed costs, for instance, renegotiating leases and rents where possible. On Slide 15, we take a closer look at our key priority, cash generation. As Patrick said, we are tracking cash on a daily basis. We are doing this through a bottom up modeling of the next 3 months, with country providing us on a weekly basis a rolling estimate from top line to bottom line evolution And press working capital, broken down between inventory receivable and payable. Country management teams are monitoring receivables closely and managing payables tightly. We should also benefit from defaults on social tax in most countries And CapEx will be lower as well as we put most projects on hold. I would add that we don't expect significant restructuring costs from the OpEx measure I described before. As mentioned earlier, We are also proposing to our shareholders to suspend the payment of the 2019 dividend, which will represent a cash saving of €145,000,000 and further protect liquidity. Concerning our debt covenant, I remind you that our covenant on our senior credit agreement is calculated twice a year in June December. At December 2019, our debt to EBITDA ratio post the disposal of GEC pro service stood at 2.37 times. The covenant set a limit at 3.5 times with 3 spikes authorized, 1 between 3.75 and 3.9 an 2 times between 3.5 and 3.75 times. Let me conclude on Slide 16 with our liquidity picture, we showed that we have no short term issues. As of March 31, we have €1,130,000,000 of liquidity, including the available cash and the €3,000,000 in undrawn facility on our senior credit agreement. In addition and if needed, we have a €200,000,000 of other facility with our pool of banks and also have access to €500,000,000 in addition liquidity that could be set up with core banks without requesting any waivers. The chart shows that we have no short term maturity on our banks with no significant repayment before 2024 following the 2017 March 2019 refinancings. As shown, half of our financing is supported by We have different programs in 8 countries with term and conditions through 2020 2022. As you know, for every program, we have to reload the securitization conduit every month with the new receivables. With a lower level of activity, this source of short term financing will be reduced, but we have sufficient liquidity available to cover for that. With this. Let me hand over to Patrick for his concluding remarks. Thank you, Laurent. The one thing that the takeaways of this for the time being, there is one thing we are absolutely sure of, which is on Page 18, that it was so right to have invested in this digital transformation. And the first level was to get the data layers, the data structure, so that we could immediately understand what was going on day by day everywhere in a global and local way by using Power BI, customer behavior through the CRMs and so on. And even more today, we continue to try to get, for example, the daily pulse, how is the market moving by product category, by segments, detecting if there is something that would is one day, is it 3 days, is it something to be able to catch up with everything that is happening on the way down as much as on the way up. And the more these data layers is being structured, and now it's a vast majority of country who is already structuring in such a way, it is obvious that we will continue to roll out systematically everywhere. Based on this, the transactional web and EDI platform and the function, whether it's an e mail to EDI, digital customer invoicing, track and trace and more that we have in a standardized way so that everybody, every country in Europe, which is has done its data structure using this transactional standard tool can really get to a much faster digital adoption that the conditions are just making it happen faster than ever before. And it's for us just a question of rollout. It's not a question of development, it's not a question of infrastructure, it's not a question of what to be done. It was a question of adoption and adoption by, obviously, our people that are adoption by our customers. And customers now, when they are forced to, they adopt much faster. This may create a point of no return, by the way, in this industry, which to me is great. And then obviously, all the predictive work that we have put. In full furnace, they are more valid than ever before. And I'm so glad that this is really it's exit. It can be rolled out. There is major developments being now from DAP, and I'm extremely happy for that because next the NBO, for example, next best offer. What is the right assortment for new categories of customers. The which customer is likely to churn, how much will be due to his own financial risk, for example. We may probably detect in advance some people who without waiting for them to have difficulty, which start to buy less or different kind of a different pattern and kind of thing. All of these modules from data structure, through transaction, through predictive, face new usage, put it this way, but confirm that it was the right thing to do. And by the way, the infrastructure supporting is really strong because we got peaks in demand peaks in people going to the web to find if it's available, not available, if it's open, not open, under which condition can I get it, transacting like this, calling the phone, that the phone going to the web and to the EDI, all of this all our infrastructure has resisted perfectly, and I'm thankful to the IT people? Update on our 2020 priorities and actions for the rest on the Page 19. I will not surprise you in telling you that first, please help the health and safety of our employees and the customer and the relationship between the 2, no good health, no good business. Therefore, we protect as much as we can, both customers and employees. Ensure business and process continuity. If we need to lock down something, we sanitize, we clean and we create a condition for continuity week after, 2 weeks after, or day that is never something that we stop definitely. Obviously, we will focus on liquidity as key performance indicator. There is one thing which is really it was an element of our evolution. It becomes an element of running, running a company at different levels, liquidity become a focus throughout such a phase because cash is king. And protect the company, focus on OpEx, we did. People know what it means. And we will focus on OpEx when it will restart, but it's because it could go down again. The dumpy vision that we may share one day require this OpEx up and downs flexibility and cash management. Rollout of all our digital capabilities systematically because it's just now aware of life. It's obvious that we have suspended, and you know this already, our guidance on March 25, we suspended the guidance for 2020. And there is no way today that I could tell you what the rest of the year would be because I don't know and nobody knows. And the Board of Directors has decided not to propose, have decided for the AGM not propose a payment of a dividend in respect of the 2019 dividend at the next General Assembly, which is now postponed to June 25. And with all of this, I think we can open the session for the question. And I think the communication is working. We are all in remote locations and not together as usual. Therefore, there may be slight delays between your question and the answer. Thank Your first question today comes from the line of Lucy Terrier from Morgan Stanley. Please go ahead. Hi, good morning, gentlemen, and thanks for taking my question. First of all, a big thank you on all of the disclosure you are providing today around current trading and so on. I mean, we haven't seen that at many other companies, and this is extremely helpful. I have 3 questions. I will go one at a time. The first one, both of you have been at the company for a long time. And I was hoping you could give us maybe a couple of more a bit more colors, maybe a couple of examples on how you manage cash generation and collection in a downturn environment. As you were already, of course, in the company in 2,009. And also why do you think maybe can you contextualize why you think that your current cash balance of about €1,100,000,000 is sufficient to kind of in this turmoil. So that's the first question on how you manage inventory and why EUR1 €1,100,000,000 is enough from your standpoint, yes. The management of inventory and the cash collection, 2 elements to the same question. Management of inventory, first, it's very different from the previous recession because we were in a rather quite booming mode. Last year, the year before, organic sales, organic growth, remember, EUR 1,000,000,000 growth over the last 3 years, and we were gaining market share, and we were just accelerating. Obviously, when you do this and do you hear me? Somebody say my mic would be out? No, I think it's okay. No, it's okay. Good morning. Okay? And obviously, we got a lot of inventories just proportionate to our sales growth, and we continue to do because we had a good start at the beginning of the year. It stopped overnight. It stopped overnight. Lucie, I would tell you one thing, I never saw that in my life, minus 70% the next day. And you look at your inventory, you say, Jesus, I have far too many now. What can I do? And then the next day, people are asking for products for which we have low inventory, not needed to replenish immediately, that low inventory. And in that moment, we face a new situation, which probably will become more like the previous one, but in the coming months and more on the longer term. Never forget, the Morgans the previous crisis, the big shock was in August that the economy went down, gradually speaking, over the 12 months after, And we were rolling our inventory down, but it was not going from booming to minus 70%, neither minus 30% around the world. It was minus 5 and another minus 5 and a minus 8. Our business, it was like 12 months of an erosion, 12 months to adapt, 12 months of not replenishing in time and 12 months of collecting the money from the supply from the from the customers less every day, but not a big drop, okay? Now this time, obviously, we say I put a few words, I will be frank with you. Brutal rules, the minimum on the item that we sell is 2 sold for 1 replenished. And it will and sometimes it's 3 times sold for one replenish. And sometimes it's 5 times sold for one replenish because depending on how the demand and the pickup will come to get the inventory down is really making sure and we are adjusting by week. And all our tools that will be very operational, yes, all our tools couldn't face this. All our tools of yesterday are replenishment tools, calculating on long series and so on. Here, we have to provide within a few days, within a few weeks, the adjustments to everyday sales, and we are doing it. And yet the inventory has to go down because they are too high today for what we need. They will go down. That's one piece of the The other piece is to collect the cash. Collect the cash from everybody we needed, meaning cash from money that we are collecting gradually over time like always, whether it's formal rebates to be collected or whether it's from suppliers. Some were coming from customers that were owing us some money for this or that. I mean, get it done within a week or 2. This money is due to us. We own it. Get it cash in. And I made this cash in program on everything, plus Now comes the second phase, which will last probably to the end of this year. Every day, every week, make sure that every customer, we don't get another view. If there is another view, for which reason? Is it a day? Is it 2 days? Everything which is a sign of fragility and non liquidity. And here, we changed our total policy. Here, we decided that to tell all our customers, the problem is not between you and us. We are on the same side of the table. We have to find the liquidity so that you can pay me because I need to pay my suppliers. In the previous crisis, I was running the business in a country. And I remember customers coming and saying, could you extend my payment terms? They come with the same question today. But the people who have seen the movie once, they know if you extend, the bill is only too high at the end. A few times it can work. Most of the time, it's only a higher bill because at the end, the first to ask are already in difficult time. And therefore, we try to help them finding their own solutions, but we don't give up on the payment terms. And we don't give up on making sure we are being paid. There will be accidents, and there will be a few accidents. I cannot imagine that a world like this will not create a small or big accident. That the first one is normally paid, and the one very prudent is getting out in a safe mode. Just to give you an operational dimension to it. I don't want if I don't know if Laurent would like to add something to it. Yes. Maybe on the receivables, just to say that as you pointed out, we want to stay very close to our on one side to help them to continue their business. And on the other side, for example, what we did in France, We issued to them all the kind of government aid they can use because for the smallest, they have not the access or the ability to get easily the list of all the aid in terms of deferral of charges, in terms of renegotiation. So we issue very quickly a small kit held by consultants in order for them also to manage their liquidity. So that's the kind of agile things we have done. And of course, when we talk liquidity, we talk also EBITDA and this is the action we have taken especially on salary and benefit to make sure we can adjust very quickly. Thank you. My second question, I guess, is around the OpEx reduction that you're putting in place. It seems to me it is much faster than what we had seen in 2,009. And obviously, the situation has deteriorated much faster. When you think about the sensitivity of your earnings, and I don't mean to ask any specific numbers here, But do you think that proportionally versus whichever decline that might come out this year in terms of the business, Do you think your bottom line will be more resilient than what it was in 2,009? The one thing I know, we have acted much faster, very radically. We were ahead by all the measures provided by the governments, probably more than in 28, 29, but the total management was really acting fast. Now there were a couple of days where, yes, we were like 20 hours on S and B, 20 hours per day from Asia to the other end of the U. S. That we have a good collective in the last years, we have built a good collective common sense of what to do, how to act. And just by making phone calls, just by making sessions, just by making coming back the next day. And within a couple of days, yes, we have reacted much ever faster. But there was one thing which I heard that the financial market was telling me all the time. You are not a flexible company, you are not reactive fast. Well, I think we are showing you we are much more flexible and we are much more reactive to anything that I would have imagined. But yes, we do. And if now to the question of the resilience of the bottom line, there are 2 pieces in this. This is how much the market will come back and could go down again. I have now the 2nd phase, which is some markets are coming back. How to protect the EBITDA when it goes up again? Protect the EBITDA when it goes down, this is cutting the cost and all these elements that we have done. Some will last longer. Some that would be an impatience by some people, by some managers, by some situation I need, I need to go back and then no. We will be very prudent in how to reallocate resources and costly resources only if the app is not bumpy that the week after it goes down the other way around. No, we will adjust. We have a formula. That something I have shared with all my managers already, that something we will follow every week because, yes, the EBITDA is something to be made more solid, resilient for whatever the market can give us in volume. Thank you, ladies and gentlemen. We are very fast in the confinement period, and we see that the confinement will be even more difficult. The adaptation to cost to the quality of the top line as polysilicon by Patrick will be very key. But the issue we have today is that our most profitable country, that's the one that experienced the biggest shutdown. So the question is a pattern of the recovery. What kind of letter would it be, VU, W, L, I don't know what to do. So that's why it's very difficult to compare to 'nine, where it was gradual from Q4, 'eight to every quarter in 2009. At that time, there was a lot of restructuring. There was more than €150,000,000 restructuring that have been implemented. As you know, we already discussed it. We shut down more than 2 30 branches, mostly in the U. S. And we said and Patrick I said it clear now that we will not close any branches, especially in the U. S. We will adjust at least, but not our footprint. So really the ingredients are very different, but we and what is important is to be proactive, try to be agile. And we believe that all the tools for digital and the KPI we can get on a weekly basis are helping us to monitor the country with all the community of CEOs, CFOs. And there is one thing that I would like to add. We will not get the salaries and benefits for other elements, transportation and so on. We will not let it go up by the top line. I will let it go up by the gross margin because I don't know what the prices will be in the coming environment in the coming months. Therefore, I will let it only happen as a proportion of the gross margin generated, a new way of managing. That's the only way in distribution. You make so much, you can spend so much, not the other way around, not the top line only. Very clear. And then maybe my last question, just more on the current trends in the business, if I may. Which verticals are currently most impacted in your French, U. K. And North American business? And out of this vertical, whether this is residential, non resi, industrial and so on, any disproportional impact on profitability Wish we should think of or not necessarily? The one thing which has stopped very fast everywhere is all the projects, the big sites. Whether it's the high rise or whether it's in Las Vegas or whether it's in Paris, whether I mean, all the products, they stopped overnight. Therefore, the volume drop is mainly due to this. And on top and above, in the automotive industry who it was already tough from them before and they were already on a lower level of activity and they stopped their factories. And whether it was in Germany, in France, in wherever, they were factory based off. And right now, we have in the U. S, the oil and gas industry totally stopped. And therefore, when the big construction site and the major industry stopped, yes, the pharma continuing, food and beverage doing fine. We have to reallocate to the most, but there is nothing to offset. Therefore, the exchange is so fast that at the same way, Levi, a little bit difficult to tell you really how it will look like. What I can tell you is if the German automotive industry start to rebuild cars, it will take a lot of sub industries to already come along with. And by the way, independently from this, in Germany, we were able, for example, to regain on the commercial side more and even some even if I decided not to be a strategic player in the commercial building and the residential building because we were there. We never stopped because of the continuity. We had by far not a bad performance. But it's a local situation. And but it will be contrasted. I will There is not a single week where the mix is the same. I have difficulty to give you a clear answer, Lucie, because really, it's not a vertical for long. Oil and Gas, yes, as a call it impacted. The car industry was impacted. All the OEMs, building machines, machine tools, robots was heavily impacted. But they were impacted partially by the China virus not providing the parts for them to assemble and then by local situation where they couldn't bring the manpower to build them. And maybe now they will be impacted by a lower demand, globally speaking. And it's also something we watch carefully, how much will we start because it will tell us what would be the driver of the growth and what would be low in demand because we are getting prepared for lower demand. Okay. Thank you very much and best wishes of health for you and your family. Take care. Thank you. Thank you. The next question is from the line of Andre Kukhnin from Credit Suisse. Please go ahead. Good morning. Thanks so much for taking my questions, and I hope you all are well. In terms of the mix, Can I ask about the product mix that you mentioned at the beginning of your presentation where you talked about some winners becoming losers and some of the smaller kind of products becoming runners? Could you give more color and detail on what kind of product categories they are that are leasing and winning and what are the margin implications from that? Well, I can tell you that, for example, when we look at the mix, everything which was related to maintenance, meaning engines, drives, motors and that meet in certain place to be rolling 24 hours per day. The maintenance of this has increased, everything which is drives and so on, process controls, automation of these elements too. As the industrial demand became for technical products became over proportional to a panel breather installation demand for power cut or power management systems. And when you have and normally, for example, these industrial drives and so on, which has a certain percentage in our business, a percentage tripled or 4 times higher, and whereby the rest stopped. And we saw also people who never asked for because they were just electricians doing normal maintenance work and but for certain customers. And after a sudden, they were doing all the job site, all their plants, all their sites, and they needed different products. What we saw is that the correlation between 2 worlds, the world of water and electricity, the world of heating and cooling and electricity, the world of air management system and electricity, whether it's to push, to extract, to rotate, to whatever, it's always a need for electricity and the electrical demand in such sub aggregation sub aggregated products versus such applications became over proportional to a pure normal installation of panel builders or even the cable, the cable in the building, cables irrelevant from the copper price. Cable was totally no longer by far in the normal proportion. That within the cables, you have the one which are absolutely fundamental to provide more needs, which is a certain type of it's not the one to connect to the electrical providers. It's not the one to make but these are the one to provide to data centers, the one to maintain data centers with electrical staff and cooling systems, certain size, certain type of cables. That's very useful color. And the Margin implications from that, are there any for you? Yes. It's obviously in the mix of countries, some. There is obviously one it's more the fact that the highest margin countries were brutally the most impacted by the stop that created the margin mix. There is no major impact from the product mix, so to speak. A good one. Thank you. And one quick question I had was on logistics costs. Are you passing this through to the customers? Or do we need to worry about that? What we found in this exercise that we were not passing enough to the customers. Allow me to say that I should not laugh, but it's always a surprise that you think you do and you don't do systematically. Therefore, by we have first cut the cost down by not doing all the same exactly. There is not enough volume for having certain vacation tour systematically every day. Therefore, we do every 2 days to replenish the branch locally without hurting the customer service. That's one element. And the second one, we had specific tours that were normally specifically charged to the customer. It was no longer the case. It would be or it is now systematically done. Thank you. And lastly, in this experience in the last literally few weeks and those numbers that you gave for developments across regions. Do you see yourself performing in line with the markets with end demand? Or is there evidence of you taking share because of being quicker, being more digital? It's hard to say because some people have closed, then we gain shares. But when they reopen, how would we be the behavior of the customer. And at the same time, I think everybody will have to be prudent on the ability of customers the ability to pay. Customers will have to manage their own liquidity over the next 18 months. And this there is a first wave of adjustments, and there is a second wave. And if I would have to gain market share at the cost of having issues with customer not paying well, I would not do this. Therefore, the longer terms, I think, I hope, because all these efforts should have a payback sometime down the road in terms of market share gains, but the quality of the customer base will be key in the next 18 months. If you allow me to say, I expect bankruptcies, I expect contraction, I expect less of our existing customer in 12 to 18 months from now. The next question is from the line of Martin Wilkie from Citi. It's Martin from Citi. Just a question on your cost base. You've given a nice summary of flexible and variable costs and so forth. The first one, just to clarify in salary and benefits, when you mentioned that's down 27% in April, does that include the sales commission part of it? Or is that just the benefits of using government schemes for short term working and things like that. And then just that was the first question. And then just more generally, when you think of these variable costs, I mean, are they fully variable with sales? Just how we should think about how the cost base develops as we see the sales decline kick in and accelerate into Q2. Thank you. Maybe I will take this one. You add The 27% is a full blended reduction, including the sales commission. But a great chunk of it is really all the temporary unemployment measures we have grasped across Europe plus the flexibility in North America. The commission is something in the U. S, people are much highly commissioned, so to speak. For example, the sales we didn't put any sales rep in the U. S. In furlough or in unemployment or whatever, no, because they make their living out of their commission. The minimum is really low. And therefore, we kept them all. And we say now let go in order to catch the most you can. And this is commission are going down. Obviously, there is less margin because they are commission on margin. And that, yes, if there is less, they gain less. If they can make it, we let them make it because it's our own results are depending upon that. Commission in Europe are far lower. And therefore, only based on commission, we would never, by far, by far, by far, never would have reached anything of these adjustments. I cannot tell you more on Q2 because I will tell you, Q2, it's like 3 months. In 3 months, it's like it's 13 weeks, it will be 13 mix of everything. And when I look at myself yesterday, we had our Board. If I could have told our Board what would be Q2, I would have done it. We have hypothesis. That it will be 13 weeks of a mix of different countries, different customer, different configurations. And within mix, within a week, we have difficulty to identify if the week after would be of the same or not an hour. It's really I was talking not too long ago to somebody, a general from an army and he said, it is like the fog for the army. And he's so right. This is the fog of the army. That's helpful. Thank you. Martin, you had another question? Well, it's more So the second question was more around how we see those costs coming back. I mean, as I'm guessing, if it's commission related then simply as sales pick up. But then you mentioned things like deferral of wage increases. So presumably then as hopefully the world improves in a few months, Does that mean that these costs come back at a quicker pace? And also just to check-in government schemes around the world, are In all those cases, does that cost go to those governments for a period? Or does it ever come back to you with a lag? Do you ever have to pay the government back in any of these countries? We have many situations, Tiffany, and then I can give you a little bit more color. There are countries and France just took yesterday that measure where you could individualize the fashion unemployment scheme, meaning we can call back 1% without calling back the equivalent category. And so that is to facilitate people to go back to work and avoid the staircase in the OpEx. They decided to have this. It's new. It's yesterday. It's first time. And obviously, I was waiting for by the way, we used every channel we could as an employer to contribute to this. And I'm happy to have it because we don't have a staircase effect. In certain countries like Germany, if you are not below 30%, you cannot call for partial unemployment, quarter by it. And And obviously, we have to use other mechanics. We also have to remember that we were short of people and we were using camps over time and other things. Therefore and it was costly. Therefore, if we have to bring back, there could be a little bit of a staircase approach here and there, but not everywhere, which is a good thing. And the second thing is some people will never come back. They were like tempts from interim management systems, as long as we are not at the right level, they will not come back. To even give you more color because the question is very valid. So the difference of the past, the people that will come back and the cost. Let's take cost. It's only a proportion of additional increase in gross margin generated over a period of time, stable enough so that I can say now visibility reached. It's not by one day, it's not by 2 days. If during half of the month, I see an improvement in gross margin generation, a portion, only a portion of it would allow an increase in SMB or resource to come back from the different places where they are today. Not everybody will be happy. Not everybody will be satisfied. We may have some internal difficulty to choose. We may have maybe a very slow a long process for some people to come back, but it's all dependent upon if there is enough market and enough margin. It's something we never did. It's something we decided to do. It's something Laurent and his team, myself and the CEOs, we manage daily. And so the personal unemployment, we never have to give back the money and there are very strict rules for which you apply for it. But when the government is saying, okay, you can do it, you get the subsidies. Then of course, the and we are coming back when you stop the measure as said by Patrick. Okay. So that's it. Thanks very much. For example, in the U. S, I took measures for 133 days because I expect certain people that could last that long. If we need, they will come back earlier. But for some of the systems on furlough, we have applied for 183 days in certain states. Okay. Thank you very much. Thank you. The next question is from the line of Andreas Willey from JPMorgan. Please go ahead. Yes, good morning. Thanks for your time. I have a question to follow-up on these government measures, government support measures. In terms of your ability to combine Receiving government money while also doing continue to do or accelerate doing some of the normal restructuring, how does that influence basically your decision whether to take some of these measures up? And what are some of the strings attached if you go for some of these schemes in terms of your ability to cut costs more structurally, also given your earlier comments about that, obviously, we're going to have some more lasting impacts on business activity beyond the shutdowns? That's my first question. We it is obvious that we need to count on ourselves first, and we need to act for ourselves first. But it came so rapidly that you take all this support, whether passion unemployment, subsidies not subsidies, passion unemployment, it's more on SMB that we use them, okay? You may do a little bit of tax deferral here and there, but it's only a deferral we have to pay at the end. And it's more the cash profile. On the structural cost, it's obvious that should the market not come back to what it was before, the transformation of the company on top and above, going digital, the structural changes in the mix of profile that we need, mix of the amount of people by job descriptions or by job profile, we change, and it's obvious that it is changing today. If your question is, do we have structural changes at the end of the tunnel? Yes. And they are the one that the market is imposing on us to be a long lasting company, just a digital trend, such as telephone. And it can go also to certain model concept. Would a branch remain what it was? Not. Would a branch be more, I don't know, in the middle of the city, probably a locker situation and the manning will be different? Yes. And these kind of changes, I cannot tell you how much, how fast I will be, but it's there. We thought of it before. And by the way, you remember, you saw it in Paris with certain developments being made around the digital and the lockers and the approach, that this is just accelerating incredibly. And for example, I can tell you that in June, what we announced in October, we will make life, which is a personalized digital homepage. And in doing so, everybody with interest in his own for what he is. And it means there will be less people looking for specifics from them outside of the web. And in doing so, yes, we accelerate certain changes. At the end of the day, I cannot because I don't know exactly, at the end of the day, the profile of the company in the mix of resources in the mix by country in the country within the country and in the global structure of the P and L will be different. So you don't think that participating in wage support in a country like France will make it harder for you to continue to pursue this transition. It happens that France was one of the most, if not the most efficient country. We already we are doing this gradually. We have not asked for anything which is blocking us. There are conditions we know that if you use something, then you cannot do for 1 month or 2 at the end. That it's 1 month or 2 a quarter. If we would have if you remember the old times where asking for French support, you cannot lay off anybody for a year or 2 years. This, I would not cross that bridge. If this will come, I would not. I want to keep the flexibility for the future. And on cash flow, you talked earlier about the working capital situation. In 2,009, the percentage of sales came down for working capital, not just basically working capital inflow because of sales fell. Do you think you can reduce the percentage of sales this year? I appreciate that maybe difficult to estimate given the volatility of markets, We don't know where we are by the end of the year. But conceptually, from a working capital level, do you think you can also reduce the percent of sales this year? There are 2 timelines that first one is due based on the speed of the decrease, it is clear that the Inflow of cash, you have seen in H1-nine will not materialize that way in H1 this year. And this year, because of what we discussed on the inventory, We will probably as a recurring year have a negative free cash flow before interest and tax, opposite to 2009. On a full year basis, depending on the profile of the cell recovery, we will be able to activate more structural the changes and get back to a very good inflow. That's the plan we have. But again, it's It's very dependent on the recovery profile and on the profile of the sales pattern. Thank you very much. But fundamentally, we will go for it. Yes, the speed is a matter of the market, but the fundamental fundamentally, you are right, we will go for it. Thank you. Thank you. The next question is from the line of I was wondering on 2 things. The first one is the good numbers that you actually published in Scandinavia and also in Germany even at the beginning of April. Could you give us some more explanations of how you achieved growing sales in these two regions? And my second question is on the recovery outlook once the lockdown fades away. What is your current view on how much could sales actually rebound or at which speed, Especially if you consider the experience you had in China so far? Well, Germany and well, each country, you mentioned Nordics. I mean, Nordics is only Sweden because lockdown in Finland was there. Lockdown in Norway happened. Even if Norway lockdown didn't materialize too heavily, that is a small market. It's Sweden and Germany. Germany, it's you remember that we had a major restructuring in Germany. We concentrated on fewer branches. We got the inventory. We regrouped on a few places, and we increased our service level to the max. And because we really became flexible in Germany, we could serve what was needed by the people where we were in the cities where we are, in the regions where we are. And except a two branches which really suffered from heavy industry impacting down like a pound strike where it's due to Volkswagen and if Volkswagen is not doing fine then the rest is down. That and when it restarted regardless, globally speaking, this is just the proof of the validity of what we have done in the restructuring of the year before at the time where others were trying to see where to cut and shave and kind of. We are already lean, and we are getting even leaner in terms of OpEx. And we have good teams, good management. They were eager to see it. And for them, the painful part was done was the year before. Therefore, they captured the market that they could. And they obviously here, they probably gained local market shares. That I'm sure of. I'm sure because their weekly became highly efficient, and it's good news for the future. And then the pragmatism of the German a way of doing as that's also because certain regions with low coronavirus, things were maintained open as much as they could. The North, especially, but also certain places, yes, that's close to the border of the street border and the Austrian border. This is where the virus hit the most. But even in Munich, for example, we got good numbers and that because we gained market share locally. In Sweden, it is probably the fact that things have been delayed very long before any decision made to go for confinement. And plus a little bit of natural social distancing in the northern part of Europe. People live less together and compared to where in Italy, in Spain or in France, things have been exploding be fast and creating the wait. To the this is the only explanation I could give you, I don't have better facts. We watch carefully. And that is also the fact that in Germany, the Industry and Commercial Building or the technical buildings where we focused on, but where we remained open. If people needed the rest of the products, we could make them available. Therefore, we participated to local construction, residential construction, more than we thought ourselves and better than the previous years. Maybe I could add on Scandinavia. In Norway, we gained some customer in the utility In a moment, we had quite a mid winter, so Utility had a very good performance. So This segment was quite positive and helped us in Scandinavia. You I'm sorry, I should have noted the second part of your question. Yes. The recovery outlook. Yes. And also based on what you've seen in China too, what is your current view on possible scenarios. Maybe on China yes, go ahead. I cannot ignore the China that given what we are in China, it's not China. We are in the OEM and a lot of integration and a lot of intelligence. It's almost like an integrator and a distributor. That's what we are. And because we have restricted our operation there, the mix is beneficial to us. And the customer we serve the good customers compare, for example, panel builders are down, but we don't serve panel builders. We serve really OEMs. And we are in a segment. They came back fast. And therefore, I'm not sure the profile of China would repeat. And I'm more looking at what I say, you shape to go down, boom. To collapse from the top of the cliff, boom. We see the bottoming up. Where it is today, we have been for 2 weeks, 3 weeks. And now we start to watch which country and I watch carefully, Austria deconfinance, some of the German fells on Germany deconfirmations because even if we were good, are we going to have to be much faster, even better based on this and to try to see what could happen in major countries like France and the rest, but it's really, I expect, a long staircase. Hopefully not a second, we're going to have begun confinement in the next 18 months to come. It's not to be excluded. I'm not a scientist, and I'm reading all the studies made by all kind of top advisers, and some do not exclude bumpy road until 2022. And then I have to make sure the company is prepared to take the best of what can be done in such an environment if it comes. It will be very pretty short term. The fundamental thing is digital will last, adjustment is part of our daily life and serving the customers to the best of the service within the cost maintenance, keeping the cost in order to privilege margin and the adjusted to our margins. Thank you very much for these explanations. Thank you. The Next question is from the line of Pierre Buffet from HSBC. Please go ahead. Yes, good morning to all. Just a follow-up question on the recovery outlook. If we look at last crisis in 2009, one of the disappointments is the fact that XL has lost some market share compared to Sonnepa because Sonnepa is in a better position to capture the growth. This time, it's different. You have can you is it fair to say that your digital offering will put much stronger position in the competition and any change in behavior will help you to gain market share, If you can comment a little bit on that. Thank you. It is true that the strategy front. It is true that, for example, closing 200 and more branches in the U. S. Is not on my agenda today. Even in the up and downs environment, there are other ways to adjust costs than leaving the floor to others to get the network. It doesn't mean that the network cannot be in full square footage reduction, different service level and the barriers, for example, the health constraints will probably accelerate this transformation. That I will not leave the floor to anybody else. The cost adjustments, it's part of the it's the riverside to this choice. I have to be flexible on the OpEx, on many other stuff, on the transformation, And I need to faster on anything that fits the customer to the easiest of how they want to be served. Now the customer the real question, which we will investigate even more today and we are watching carefully is how much customers the new one coming to this web and how much they would behave faster. They stay like this And then it's definitely Rexel will no longer be or should no longer be seen as a brick and mortar player, that a real hybrid digital, not like a pure player because we have the network to create, collect, collect and create the services, that the network become a service network to serve the customer trading digitally and or by telephone. It's likely to be something of that kind. So far, it was digitalizing a physical brick and mortar. Now it's becoming a digital interface company with the network to do service to the various 27 different segments of customers that we do serve. It's a big change that we are there. And I'm so glad that we have done the investments before, but the last year. Okay. And if I may ask one or two follow-up question. Is it fair to say that in terms of digital offering, you are well ahead of the Sunnapa and obviously largely ahead of any smaller competitors? And secondly, do Do you have any color on what happened to Amazon in your business during those commitment periods? Do they have a surge in their activity? Or do you have any color on that? Thank you. I would not comment on Amazon. I don't know. Probably a little bit later, we will see more. We will have the time to look into what they have done or not. I don't think this has been a major change. We would have seen it. But I don't want to comment not being fight based, okay? Allow me that. Joker, I cannot. On the others, I know one thing. It's different. In the U. S, the small guys, if you have less than 500 employees, you have all support by the U. S. Government, meaning the very small guys are just not moving. They continue because they are fully I mean, government is paying for their if you are below 1,000 employees. For the above, it's much more critical. For the above, it's really tough, and it depends on the region. And there will be probably different regional medium sized distributor who will not be able to make it. That I would not be surprised. And there will be a consolidation, whether it's at the end of this year or early next year, definitely, it's on the agenda. Back. Now to take conventional and back to everything, to the question people say would you benefit from, I will not go for anything which is not partially or a candidate for good digitalization. Again, it's not just market share for the sake of, if I would have to restructure and at the end of the day, to get what? A little bit of market share locally without having spend the money in the digital and too much in the buying of probably half broken business. Therefore, the sorting out in all of this will be will not change the criteria, but we have to watch carefully. There will be many more to watch then in the last 2 or 3 years, and the values will not be the same difference in that. In Europe, the consolidation, I don't think we change a lot. This is probably our chance that the pure players will not gain as much as they thought they could because we really demonstrated the digital capabilities and the service capability. Marketplace is today, and we are testing, you can place an order on a marketplace. That they give you delivery without reliable dates and a 10 lines order in 5 steps by different people who are not operating and without managing their transportation. A lot of people have tried, And some of them came to us because they knew we could be next day, you have it in front of the door and you can go to your job site. And especially when people cannot travel so much, sorry, because they have constraints. They don't want to lose time, not having the goods. And the pure marketplace today suffer the inefficiencies of their logistics, both and their own supply because they rely on and not all research parties are efficient. Okay. And maybe sorry, a very last question. You mentioned the U. S. There is a merger currently taking place between Wesco and Alixter. Do you have any view on that? And do you think that because of the current circumstances, there will be maybe some opportunities for M and A from those new Nurse Group From this new Maersk Group. Thank you. Well, we observed it was already financially quite heavy at the time when it was done. I prefer to be in my shoes than being the boss of the new entity. That's the only thing I would tell you. Because really, yes, we look at this, but nothing will be immediate, but some well, it might not be an easy situation for them, but that's all. Okay. Thank you. And by the way, they are supplied Wesco is a major, major distributor of certain suppliers who are now suffering in the U. S. More than we do, the lack of products because Mexico cannot produce. The U. S. Today has not seen everything. The fact that U. S. Suppliers are producing a lot in Mexico, it really depends on the shutdown of factories in Mexico due to the virus, and they have far less measures to protect high density plants and manufacturing site, everybody sitting next to each other. It's more like in the 50, 60s configurations. And it starts to be visible at major supply U. S. Suppliers that they are lacking products that are supposed to come from there. And there is a shortage coming on certain banner. We are lucky to have 4 banners regrouped in regions, so that if need be, we serve with a different supplier would it be erupted from another one. But I know that some of my competitors are suffering, not just of the low demand, that they will suffer even more when it picks up if the Mexico shortages has confirmed. The turmoil in the U. S. Market is not finished. Okay. Thank you. Thank you. The next question is from the line of Andreas Scatopsa from Goldman Sachs. Please go ahead. Good morning, everybody, and thanks for taking my question. I have actually 2. The first one is on the securitization of receivables. How big will the reduction be in the second quarter? What is your ideal target given the sales growth? And My second one is on rebates. Can you please help us understand the dynamic on rebates with the current volume drop and how it does compare versus 2,009 pension? I will take the first one. Maybe on the securitization, Of course, it depends on the quality of the top line month after month because we are, as I explained, selling the receivable at the end of the month. But if we look at the trading that we have currently, and assuming we don't know, I think it could improve with the deconsignment process. That if you stay around minus €30,000,000 for all Q2, what you are losing in receivable is a bit less than €400,000,000 That's why we say that we are quite comfortable on the liquidity part. On one side, you lose the top line drop. On the other side, you are a bit help Because we have a slight delay in customer payments that we tried to offset, but we have a bit You can sell longer those receivable to the conduit. So that is helping us to some extent. On the rebates, they are the pure volume related rebates, which we obviously compute automatically with the demand. Now they are not calculated every day. It's collective throughout the year. We are unable to simulate what would be the rest of the year. Therefore, for the time, we take prudence without making 100% cap. At the same time, there are other elements in the rebate, the marketing rebate scheme, the market share gain sometimes. Every supplier has with us a different scheme, which they have the same with our competitors. So that the best you are. If you are one of the best in each of these criteria, you could maintain some of the rebates or most of the rebates depend. Therefore, it's the conditional the pure conditional volume related will also be adjusted by the relative performance compared to others. We take a prudent stance on it. That I cannot imagine and you can easily imagine most of these good questions which require a view on Q2, it's already difficult. Balance of the year, I don't want to make that today. Yes, understood. Thanks. Thank There are no other questions coming through, so I'll hand the conference back to you. Well, before we close this, I would like first to thank you. I would like to wish you to stay in good health also for you and your relatives. And I would like to continue to tell you Watchfraxel as now a digital, more digital company and very flexible company which adjusts fast to any situation. If I have achieved one target with this company, my personal target, it is one of the most valuable that I wanted to get done. Thank you, and we will talk to you again with a better view on Q2 because it will be behind us at the next time. Okay? Bye bye. Thank you. Bye bye. Thank you.