Ladies and gentlemen, welcome to the Brenntag AG results call Q2 2012. At our customer's request, this conference will be recorded. As a reminder, all participants will be in listen only mode. After the presentation, there will be an opportunity to ask questions. If any participant has difficulties hearing the conference, please press the star key followed by zero on your telephone for operator assistance. May I now hand you over to Mr. Steven Holland, who will lead you through this conference. Please go ahead, sir.
Right. Good afternoon and hello, everybody. Thank you very much for joining our review of the Q2 2012 financials. With me, I have Georg Müller, our CFO, and Jürgen Buchsteiner, Head of Asia Pacific and Mergers & Acquisitions. We have Bill Fittler, Head of North America and Latin America in our Reading office in the U.S. online. We will be very happy to take questions after the presentation. For the second quarter, our group delivered continued growth in earnings in a slow growing economic environment. Gross profit growth of 4.1% resulted in an operating EBITDA growth of 3.8% on a constant FX basis. This growth was based on solid business developments in generally challenging economic conditions. We are pleased with the acquisitions executed in 2011 and their positive contribution to this development.
Based on the average conversion rate in Q2 2012, the strong US dollar provides us with a tailwind. Consequently, the as-reported growth rates are higher than the FX-adjusted growth rates. Considering this positive translation effects from the stronger US dollar, we show a 10% as-reported growth of operating EBITDA. We also report strong free cash flow generation due to higher EBITDA and lower working capital growth. Let me come to the operating highlights. Gross profit totaled EUR 487.1 million or 4.1% above previous year on an FX-adjusted basis. Operating EBITDA reached EUR 184.4 million or 3.8% above previous year on a similarly FX-adjusted basis. Free cash flow generation was once again strong in Q2 2012. We saw a moderate increase of working capital due to the usual seasonality, starting to benefit somewhat from stabilizing prices.
Free cash flow totaled EUR 101.2 million compared to EUR 67.3 million in Q2 2011, an increase of more than 50%. The acquisition spend for this year stands currently at an enterprise value of EUR 95.8 million, including the acquisitions signed in Q3 so far. Just in terms of changes to the board of management, Georg Müller has been appointed the CFO of Brenntag AG, and as mentioned before, Jürgen Buchsteiner has taken over responsibility of Asia Pacific in addition to his ongoing responsibility for global Mergers & Acquisitions. I think you're all very familiar with our board. Just turn to page seven, in terms of the increased free float. Brachem Acquisition S.C.A. placed the total remaining portion of their 6.9 million shares on the market on the 6th of July 2012 with institutional investors. Therefore, our free float has increased from 86.3% to 100%.
The transaction was led by Deutsche Bank and Goldman Sachs. If I just go to page eight on acquisitions. ISM Group on the 16th of July 2012, we were delighted to close the acquisition of ISM Group. The company is one of the leading specialty chemicals distributors in Australia and New Zealand. Thanks to this strategic acquisition, Brenntag has expanded its market share in Australia significantly and in addition, entered the New Zealand market. This acquisition satisfies two of the key selection criteria as it broadens our full line portfolio and increases our geographic coverage. On the same day, we were very pleased to announce the acquisition of TER, the acquisition of TER Corporation chemical distribution company specializing in the oil and gas sector. The company is based in one of the fastest growing shale gas regions in the U.S.
Helps us broaden our product range and service to this important industry. If I may come on to the segments. I'll pass across to Georg.
Thank you. Let me walk you through the detailed income statement, and you will find the details of the income statement on page 10 of the presentation. What you see in the financials for the Q2 is continued resilience of our business model, also under the less beneficial market conditions which we currently observe. Gross profit totaled EUR 487.1 million, and that represents a 4.1% FX-adjusted increase against previous year. All regions actually contributed to the growth of gross profit. In the past, we also provided information on the growth of gross profit per working day for each month in the quarter. In the reporting quarter, we grew gross profit per working day by 5.5% year-over-year in April, 4.7% in May, and 2.8% in June. After the end of the quarter in July, the growth rate was 1.7%. Expenses grew at about the same rate as gross profit.
In the second quarter, we did not expense any noteworthy amounts for the European efficiency enhancement program. Conversion ratio improved slightly above the levels of previous year's quarter to 37.9%. As already mentioned, operating EBITDA totaled EUR 184.4 million, and that represents an FX-adjusted increase of 3.8%. The following page gives you information on further lines of the income statement. The depreciation for the quarter was EUR 23.7 million. Amortization amounted to EUR 9 million in the second quarter, and the amortization includes customer-based amortizations for acquisitions that we have undertaken in the amount of EUR 6.8 million. The financial result totaled minus EUR 27.4 million. We previously mentioned that our financial result is partly impacted by a rather technical effect. It is impacted by the revaluation of the liability for the outstanding 49% of Zhong Yung that we will buy some years from now.
The revaluation effect on the liability for Zhong Yung in the second quarter has been a negative EUR 3.9 million. The strong improvement of our financial result in comparison to Q2 2011 is mainly attributable to the successful refinancing that we undertook summer last year. Overall, earnings before taxes were very strong and amounted to EUR 124 million, a 20% increase over previous year. For the quarter, we record a tax rate of 34.5%, and that is exactly in line with the range of 34%-35%, which we generally indicate as our usual tax rate. Profit after tax amounted to EUR 81.4 million on a 20.4% increase above previous year. We show EPS information at the bottom of the slide. The earnings per share for the quarter totaled EUR 1.57, a 22.7% increase over previous year's quarter.
As you know, our earnings per share are impacted by amortizations, and they are also impacted by the revaluation of the Zhong Yung liability. Together with many analysts, we think that these two effects are not relevant for valuation, and therefore, many analysts adjust EPS for these two effects. To support the analysis, we also state on this page the EPS excluding amortization and excluding the effect from the Zhong Yung liability. For the second quarter, the adjusted EPS amounts to EUR 1.77, so EUR 0.20 higher than the as-reported figure. Let me walk you through page 12, which is the cash flow information, more specifically the information on operating cash flow. Overall, the reported cash flow provided by operating activities amounted to EUR 37.3 million. If you look through the cash flow statement line by line, you'll note that income tax payment increased considerably due to increased results.
On the other hand, interest payments decreased significantly following our refinancing. Also noteworthy, in this quarter, we had a lower outflow for current assets and liabilities than in previous year's quarter. I continue with the cash flow information on page 13. The spending for CapEx in the second quarter was EUR 15.3 million. The acquisition spend in the quarter was EUR 2.1 million, and that's mainly related to the Petrolube acquisition earlier this year and some minor price adjustments made to older transactions. The larger transactions, which we closed in July, ISM and TR in Texas, will only be paid in the third quarter and are not part of the second quarter cash flow statement. Financing cash flow includes the EUR 103 million dividend that we paid to our shareholders in June subsequent to the general shareholder meeting.
We continue to have the major part of our EUR 500 million revolving credit facility available for general corporate purposes. Briefly on the balance sheet on page 14. The page gives you, as usual, the balance sheet structure. As you know, a significant portion of the intangibles is actually related to the acquisition of Brenntag Group by BC Partners funds in 2006 and is not related to acquisitions that we have undertaken ourselves. Out of the EUR 2.07 billion intangibles, an amount of EUR 1.2 billion is actually related to the BC Partners transaction. Let me walk you through balance sheet net debt and leverage on page 15. Net debt increased during Q2 by EUR 138 million to EUR 1,593 million, and the increase is due to the dividend payout and also due to translation effects on our U.S. dollar debt.
The group's leverage for the quarter is 2.3 times, which is slightly above the leverage at the end of Q1, which was 2.2 times. I would skip page 16, which is the long-term time series for leverage, and would only briefly mention page 17, the maturity profile of our indebtedness. There's no change to what we showed you earlier. We continue to have a very patient maturity profile with major debt maturities only coming up 2016 and 2018. On working capital, which you see on page 18, the trade working capital end of the quarter amounted to EUR 1,121 million, and we turned the working capital 9.2 times on a last 12 months basis. The working capital turn is quite constant since the summer of 2011. Steve already mentioned the free cash flow, and you see details on page 19.
Q2 2012 delivered a very strong free cash flow of EUR 101 million after EUR 67 million in previous year's quarter. The increase by EUR 33 million, or more than 50%, is driven by the EBITDA increase and also by the lower spending for working capital compared to last year. I would hand the presentation back to Steve for segment review.
Thanks, Georg. Okay, now coming on to the segments. All the regional segments contributed to our growth in the Q2 2012. Europe grew its gross profit by 1.3% on an FX-adjusted basis, and an operating EBITDA by 1.1%. As highlighted previously, we had started a program to increase efficiency and reduce the European headcounts by about 4%. Clearly, this is a sensitive process, and at the end of June, we had completed about 75% of the planned reductions. In Q1, we had booked EUR 10 million expenses and expected another EUR 2 million to come in Q2. We now think that the EUR 10 million booked are sufficient, and no additional one-offs were taken in Q2. The European macroeconomic environment continues to be soft, and we saw a slight weakening trend in the course of Q2. Our business is highly resilient.
It continues to grow, supported by the successful acquisitions carried out in 2011. We will continue to monitor the overall macroeconomic situation and remain ready to take further steps should it prove necessary. To the North America. We continue to be a strong performer in the quarter, with an FX-adjusted gross profit growth of 4.7% and an operating EBITDA growth of 3.4%. The business continues to develop well across the continent, although we notice a slower momentum on the demand side compared to Q1. To the Latin America. Our business in Latin America performed positively. The segment delivered a 5.2% FX-adjusted gross profit growth and a 5.8% EBITDA growth. In Asia Pacific, we show a 23.6% gross profit growth and a 19.8% operating EBITDA growth. The picture in Asia is somewhat mixed.
Our Chinese acquisitions Zhong Yung showed a stable contribution within the quarter but is affected by lower demand levels due to the cooling in the Chinese economy, particularly within the construction industry. In addition, our business in Thailand is still not back to normal activity levels. We know that most of the customers initially affected by the floods in Q4 2011 are operating. However, the Thai economy is now suffering from lower demand levels from Europe and China for exports. Macroeconomic research indicates that particularly in June, industrial production dropped by almost double-digits below levels seen in the previous year. In Thailand, we lost EUR 1.4 million of gross profits in Q2 2012 over the previous year's quarter. Clearly, the business recovery is slower as a result of these factors. We saw an improved performance in the rest of the Asia Pacific region compared to Q1.
The ISM group was not yet consolidated in Q2. We were consolidated from July onwards. To summarize, our group's operating gross profit for Q2 matches +3.9%, and the operating EBITDA grew by 3.8%. Now coming on to the outlook. We continue to have a positive outlook for 2012. We still expect a certain level of macroeconomic growth, but at a clearly slower pace and with some differentiation around the world. In consequence, we expect the group to grow gross profits. The gross profit development will be driven by volumes and gross profit per unit, while chemical price changes are less relevant in this context. In addition to organic growth, the acquisitions undertaken in the course of 2011 will have a full-year impact in 2012. Furthermore, the recently acquired ISM Group and TER will contribute to the growth in the second half of 2012.
Our EBITDA guidance for 2012 is an operating EBITDA between EUR 705 million and EUR 735 million. This range is based on the following assumptions. The US dollar/EUR exchange rate stays in line with levels observed in the first half of the year. No further deterioration of the world economic climate compared to the situation we currently see. At this stage, we don't have an updated view on the potential exposure from a French antitrust case relating to a period of over five years ago. Based on the currently ongoing assessment of the contents of the recently received Statement of Objections from the French antitrust authority, Brenntag will review the adequacy of the current reserve. Let me also address the current trading environment. The acquisitions undertaken in the course of 2011 helped to generate gross profit growth. To some extent, currently stronger US dollar also continues to support the earnings development.
North and West American markets are stable versus previous years. The European gross profit continues to suffer from a soft market environment. Southern Europe remains weak. Other parts of Europe are developing more positively. In Asia, China faces an increasingly softening market environment. Although Thailand is not yet back on a growth path, other countries in Asia Pacific develop quite positively with encouraging growth rates. A demonstration of slower macroeconomic climate can be seen from gross profits per working day growth trend. Despite a double-dip recession seen in many countries, our resilient business model delivered growth. This is why we feel confident to provide an outlook of further growth leading to a range of EUR 705 million to EUR 735 million of EBITDA, or in other words, a further record result for 2012. I think that ends our presentation. I think now we're open for questions.
Ladies and gentlemen, if you have a question for our speakers, please dial 01 on your telephone keypad now to enter the queue. If you find your question is answered before it's your turn to speak, you can dial 02 to cancel that question. If you're using speaker equipment today, please let the handset before making your selection. Once again, if you wish to ask a question, please dial 01, and if you need to cancel that question, you can dial 02. One moment please, for the first question. Our first question comes from Mr. Pan from JPMorgan. Please go ahead, sir.
Afternoon, chaps. In terms of the organic revenue growth, Brenntag always states the growth ex-currency, but you include acquisitions with organic. If the gross profit growth was 4.1% in Q2, what was the organic? I think in Q1, the organic was 5.3% as a reference point. In particular, it'd be quite nice to know how that organic has developed across the months. Thank you.
It's Georg. I would say the contribution of acquisitions to gross profit growth, in the second quarter was somewhere between four and five percentage points. If you deduct four or five percentage points from the FX-adjusted as reported growth rate, you'll end up with organic. The contribution by the acquisitions in the individual months of the quarter was not really different.
There was no organic growth in the quarter?
On gross profit, organically in the quarter, FX-adjusted was flattish.
Yeah. Okay. Thanks, Georg.
Thank you. The next question comes from Mr. Weng Ling from HSBC. Please go ahead, sir.
Yes, thanks for taking my questions. Three questions, actually. First of all, regarding your guidance. If I take the middle of your guidance range, this would mean that you're seeing the second half of year 2.3% year-on-year growth in EBITDA. We have seen a 9% growth in the first half of the year. In the second half of the year, we should see some improvement probably in Thailand. Also, as the comparable base is coming down, also we have the cost savings in Europe. Maybe could you give us your assumption about what the organic volume growth should be in your view in the second half of the year? Do you expect here a significant decline in volumes? Because we will probably also see some positive impact from the U.S. dollar development.
Maybe you could give us some more details here what your assumptions are in terms of Thailand's improvement and cost savings in the second half the year. Second question, could you give us some idea how the gross profit per unit developed? Did you increase the value added services you are selling to your clients? A third question, regarding the development and the growth rates of EBITDA compared to the gross profit, especially in North America, the EBITDA growth was lower than the gross profit growth. Maybe you could give us some reasoning for this development, especially in North America.
Yes, it's Georg. With respect to the guidance, obviously we provide a range of EUR 705 to EUR 735. The range is a little bit broader than the range we used last year. The fact that we indicate a broader range than last year obviously also reflects that there is a little bit more uncertainty in the market than the uncertainty we have seen previous year. A recovery in Thailand, while it is very relevant for Thailand, while it has relevance for the segment Asia Pacific, is on a group level of relatively minor relevance given that Thailand is, relative to the global group, a relatively small piece of our business. The U.S. dollar-EUR rate, which we have figured into our guidance range, is around 129.
Yes, we do observe that currently the U.S. dollar is trading a little bit stronger than the 129, in providing the guidance, we didn't want to take a bet on currency developments. We effectively used the average rate that we observed in the first half of the year, being fully aware that the current trading is stronger in the U.S. dollar. I would move on to the gross profit per unit question. In the second quarter, I would say the volume development was pretty close to the gross profit development, basically indicating that in the second quarter we have not seen any significant change in the gross profit per unit. The third part, the observation that in North America, gross profit in the quarter grew a little bit stronger than EBITDA or in other terms, that the conversion ratio marginally declined. Yes, agreed.
We would still say from our end, given that the conversion in North America is very high, the small change is within the noise. If you look not on the quarter but on the first half year, you would see that we have no change in North American conversion.
The change in the conversion rate is then something related to product mix or?
When I say it's in the noise, then I basically mean it's that small that it is difficult to identify any specific driver in the complex business model we run on these tiny changes.
Then one follow-up question regarding also the guidance and the cost savings in Europe. Are you still targeting something like EUR 12 million cost savings on an annual basis?
Yes, absolutely. Just to clarify, the EUR 12 million would not be calendar year 2012, but one rate basis.
Yeah.
Most of it kicking in Q2 this year, all of it Q3 this year.
In the second half of the year, you'll see the full process impact from the cost savings.
Yeah.
Okay.
Our next question comes from Mr. Toby Reeves from Merrill Lynch. Please go ahead, sir.
Morning or afternoon, guys. Toby Reeves from Merrill Lynch. Can I ask a couple? The first one is, in your statement, you talk about Asia Pacific, where you're taking your repositioning assets and resources in response to slow economic growth. Can you explain what you actually mean by that?
I think it's fair to say that we have a very significant sales and marketing organization in Asia Pacific. Therefore, it's important that we address markets which are showing growth, as opposed to chasing markets that aren't particularly positive. In that, we're making sure the organization is appropriately configured and it's pointing in the right direction. This is more a case of making sure tactically that we are in the right place at the right time, and addressing the markets which give us growth. Maybe it's a broad way of really looking at the positioning of our business to make sure we're in the right places in Asia for those markets that will develop most quickly in the next months and years ahead.
Is that a sort of shuffle of headcount rather than a reduction?
Well, I think in general, there's been a small reduction in headcount, but this is more a case of us really getting hold of Asia Pacific over recent years. We have actually invested in Asia Pacific quite extensively in terms of the quality of people and the positions that exist there. I wouldn't actually rule out, I don't want to be 100% fortunate here, because I wouldn't rule out increasing head counting in Asia Pacific to prepare Asia Pacific to grow more strongly in the future. This is a relatively small region for us, and therefore, having the right people in the right place is important, and I would actually probably more likely invest in personnel cost in Asia Pacific from the point of view of giving it the platform to grow in the future.
Okay, thanks very much. Then one on M&A is, could you give us some sort of comments on the size and sort of shape of the pipeline? Obviously, you're not going to give us the deals you're planning to do, but if you just give us an idea of what's out there and what's close to being done, potentially.
Well, to be fair, we do have quite an active pipeline on M&A, and we've guided the markets between EUR 200 million-EUR 250 million has been an average spend for us. We certainly have a number of projects in-hand at the moment, which we are hoping to close in this quarter and maybe the last quarter or so. At this stage, I wouldn't alter the numbers that we've been indicating.
Okay, thank you very much. Then the final question is, the numbers you gave were gross profit per working day, either 5.5% in April, 4.7% in May, and 2.8% in June. Following on from the question asked earlier, is it just the M&A contribution for each of those months was very similar, yeah?
Yeah, confirmed. It's about 4%-5% for each of these months.
Okay. Thank you very much, guys.
Our next question comes from Mr. Ramshagen from Commerzbank. Please go ahead, sir.
Hello. Thanks for taking my question. I just want to come back on the topic you raised in France, so the antitrust authorities claims there. Could you just shed some more light within the limitations you may have regarding the account provisioning you have done? I understand that you did something and let's say a potential impact on earnings if you would have to suggest a fine or somewhat higher than assumed payment here. Thank you.
I'll say that. This is a case that sort of goes back over five years. To be frank, we've only very recently received the Statement of Objections, which is quite a lengthy document, if you like, for our internal legal teams to absorb and to review. We have actually tested the relevance of the provision that has been taken against this potential, which was even back in our prospectus when we initially quoted before we floated the company. At this stage, there's no suggestion that that isn't sufficient to cover. Frankly, it is an early stage. We need to review it, and if there is a change that's necessary, then we would come back and inform the markets accordingly.
Okay. Thank you.
The next question comes from Mr. Sykes from Deutsche Bank. Please go ahead, sir.
Yeah. Good morning, everybody. I'm sorry. Good afternoon, everybody. Just on the comments of gross profit per unit. Are you already able to sort of say whether that might start increasing in the second half of the year, perhaps whether in a softer macro environment, you may be getting some better input prices from your suppliers and may be able to widen the spread between that and your customers at all, please?
I'll tell you. It's Steve here.
Hi there.
We're at a very interesting stage in terms of economic development here, because I think the way we read the market is that this has been a bit of a slowdown, which has been happening now for quite some time. I think you guys are pretty much aware, probably in a wider sense than even ourselves, in terms of how industry's been affected. What we would expect to see, or which we would believe we would see, is probably the larger consignments and softer demand period to start reducing. That has actually a natural effect. It's almost an arithmetical effect if you look at it, in terms of lower volumes would generally end up with a higher average margin per unit.
There will be some arithmetical effects in there, but also you would expect some customer behavior changes in maybe in the future months as people look at reducing the amount of products they buy in terms of the stock levels they maintain and look after their cash flow and what have you. This is a very typical scenario developing in quite difficult economic conditions, and quite often, I think we've talked about this in terms of our resilience in quite difficult economic conditions. These are the sort of things we're starting to see now.
Right. Okay. Thank you. In terms of further cost cuts, and how bad things might have to get before you start looking again, I presume it's ongoing planning, but before you may actually take the opportunity or move towards cost-cutting or making some further one-off reductions, what is your thinking about at what point do you start looking at those again?
We are an actively planning organization.
Yeah.
We've been looking at this for quite some time. Clearly we could have probably taken more costs out in the first quarter. What we've done is effectively configured the business in a way which we think is appropriate for the likely macroeconomic situation that's facing us. If for any reason we see a major deterioration in economics, which are a surprise to us, then we can take further action. What we don't want to do is put the business in a position where it can't respond positively to what market opportunities that will be presented to us as a result of more demanding economic conditions.
Quite often, this is the exact point at which people start to outsource more of their purchases. A lot of our supplier stakeholders start looking at their supply chain and looking towards distribution as a way of being more effective at what they do. It's not the ideal time for us to reduce our capability. If we were in a tough position, we have very clear views as to what we would do and when we would do it.
Okay, thank you. Just finally, in terms of the North American demand, could you maybe just give a little bit more detail as to the perhaps slowdown in North American demand and whether it's particularly regional in difference or by industry or maybe a bit more detail there, please?
Steve, may I take that?
Yep. Sure, Bill.
Good afternoon. This is Bill Fittler.
Hi there.
What we're seeing in North America is clearly a slowing macro environment, economic environment. It affects certain industries more than others. It's an uncertain environment, but we remain very optimistic about our competitive position, about our industry mix. Steve talked earlier about the resilience of the business, and we're very confident in the balance of the year in spite of a clearly weakening economic environment. It's different industry by industry. I'll leave it at that at the moment, but hopefully that answers your question.
Yep. Okay. Thanks very much.
Certainly.
Thank you. Our next question comes from Mr. Yu from UBS. Please go ahead.
Hi there. Just a few questions from me, if I may. To begin with, if I understand correctly, your FY 2012 EBITDA guidance is based on average year-to-date FX rates. Could you just help us understand what this guidance would look like if you extrapolated spot FX rates?
Yeah, Xiang, it's Georg.
Hi there.
We would rather, if you may, not lay out a sensitivity analysis, what the guidance would look at different FX rates. It's perfectly fair to say, you will remember our general guidance that on a full year basis, a change of $0.05 in the US dollar-euro rate would account for roughly EUR 12 million of EBITDA.
Right. Okay, that's helpful. Just in terms of top-line trends, if I take out the 4%-5% M&A contribution from that 1.7% constant currency July exit rate, that gets me to kind of -2%, -3% organic gross profit per working day in July. Could you just help us understand what kind of FY 2012 organic gross profit growth your guidance bakes in?
Xiang, the guidance we give is a range. We admit a rather broad range on an EBITDA level. We do not have a practice to provide gross profit guidance.
Sure. Understood. Just in terms of all other segments, the loss in all other segments, which I understand comprises your corporate cost and also your trading segment of minus EUR 4.9. That seems to be smaller than last year, despite a higher gross profit contribution from all other segments. Could you help us understand what's driven potentially lower costs in this segment in this quarter?
I'm not sure I follow the observation fully. You are right that the all other segments is dominated by the central costs, and the central costs are partly offset by a positive contribution of a centralized distribution unit. The central costs do have some volatility. I would not say, you will find this volatility quarter-over-quarter. I would not say that there is a very specific movement in the second quarter.
Right. No structural reduction in your corporate cost then?
No, I wouldn't say that.
Okay. Right. Sorry, just one last one for me. I'm sorry if I missed it.
Just maybe I should clarify or underline why there is always some volatility in the sub-headquarter costs.
Yes, please.
Headquarter costs also include, for example, costs for the due diligence efforts we undertake for various acquisitions. That can be there in some quarters and not in others. That can easily give you a meaningful volatility.
Right. Okay. That's helpful. Thank you. Just one last question. Sorry if I missed this, but if you could help us with the volume growth rate for this quarter versus, from memory, it was 1% in Q1?
The volume development in this quarter was roughly plus 3% as reported whereas roughly plus 1% in Q1. Volumes were relatively strong in the second quarter compared to the first quarter. We would also emphasize that while we fully understand that volume development is of some interest, the gross profit development is a more relevant information.
Right. This plus three and plus one both include M&A?
Yeah.
Right. Okay. Thank you very much.
Thank you. The next question comes from Mr. Mazzolati from Berenberg Bank. Please go ahead, sir.
Yes, good afternoon. On your gross profit per day figure of 1.7% or down 2.5%-3%, can you give us some flavor of how that looks across the four divisions? In terms of your free cash flow generation, are there any one-off reasons in Q2 that explain the jump?
Yes. The gross profit per working day growth rate in July, we provide that since a couple of quarters as a kind of a fixed data point and objective measure to give you some information how the current business is doing. We have typically not split it out by region, but it's generally speaking fair to say that the development in Europe is obviously, though it is more stable than others, but it's weaker than you see it in other regions. The free cash flow, no one-offs in the free cash flow.
Okay, thank you.
As a reminder, if you'd like to ask a question, please dial zero one on your telephone keypad now. There are no further questions.
Okay. Well, thanks very much, everybody. Thank you very much for those that joined the call. Thank you very much for your questions. I think we can probably finish the call at this point.
Thank you very much. Thank you, everybody.
Bye.
Ladies and gentlemen, thank you for your attendance. This call has been concluded.