Please stand by. We're about to begin. Good day, and welcome to the Nordex SE Q2 Report 2022 Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Felix Zander. Please go ahead.
Thank you very much for the introduction. Good afternoon, ladies and gentlemen. I would like to welcome you on behalf of Nordex to our analyst and investor call. Our board members, José Luis Blanco, our CEO, Dr. Ilya Hartmann, our CFO, and our Chief Sales Officer, Patxi Landa, will guide you through the presentation, sharing the latest developments and financials with you. Afterwards, as you know, there will be a Q&A session. Please limit yourself up to three questions. Now I would like to hand over to José Luis. José Luis, please go ahead.
Thank you very much for the introduction, Felix. I would like as well to welcome you on behalf of the entire board. Together with Patxi and Ilya, we will guide you through the presentation and take your questions later. We have prepared for you an, as usual, agenda today. Just going to the first slide. As usual, let me start with the executive summary of the first half of this year. My first message is that our development in the first half was in line with our previous expectations. We shared this with you in our Q1 call and as well during our roadshow meetings in July.
In general, we expected half first half of the year to be weaker in terms of volume and margins, and we expect margins and volumes to pick up in the second half of the year. Our order intake continues to be healthy, and we will continue to see a good pipeline of orders. The pricing and margins are also improving. In the second quarter, we booked 1.8 gigawatts of orders, reaching three gigawatts in the first half. 90% of those orders are coming from Delta 4000 platform. Revenue increased to EUR 1.2 billion in the second quarter, compared to EUR 933 million in the first quarter, in line with the increased installations. We expect this trend to continue in the second half of the year as well.
On the EBITDA level, we generated a loss of approximately EUR 173 million, roughly -8%. As mentioned on earlier calls, this is mainly due to impact from supply chain disruption resulting from multiple macro events like Ukraine war, lockdowns in China, cyber security incident, but as well due to volatility in commodity prices. Some commodities have been showing signs of improvement lately. Others, like electricity, remain very high level. However, this is likely to reflect in our cost base with a certain lag. We also see continuous disruption in the supply chains, which hopefully will normalize as we go forward. In addition, we book about EUR 30 million guided costs for our footprint reconfiguration.
Excluding this one, of course, our operating EBITDA stood at EUR 144 million, translating into an EBITDA margin of -6.8%. Our working capital was robust again, at -10.8%, and was better than our target of below 7%. We are also pleased to report good progress on the cybersecurity incident and recovery. There are still some last remaining consequential impact emanating from the incident that we still have to address, like commissioning machines in Germany and bringing full operational system. Most of our key systems and applications are now fully recovered and restored.
Finally, we have been able to significantly reduce the risk of this company by implementing a solid financial package with support from our anchor shareholder, as well as majority of remaining shareholders to strengthen our capital structure sustainably. Ilya will talk about this in more detail later. Finally, I would like to confirm our guidance for 2022 and our mid-term strategic EBITDA of 8%, all things being equal as they are today. Now, I would like to hand over to Patxi to share with you evolution on markets, customers, and orders.
Thank you very much, José Luis. Now with respect to the orders, we sold three gigawatts of new turbine contracts in the first half of the year, up 8% with respect to the same period last year. 70% of the orders came from Europe, 23% from South America, and 7% from North America. Biggest contributors in the quarter were Germany, Poland, and Spain in Europe, and Brazil, Colombia, and the US in the Americas. ASP grew to EUR 0.79 million per megawatt in Q2, up from EUR 0.68 million per megawatt in the same period last year. Service revenues grew 4% to EUR 226 million, representing 11% of the total group sales in the first half of the year. EBIT margin was 17.3% in the period.
Turbine order backlog grew to EUR 6.7 billion at the end of June, up 38% with respect to the same period last year. Service order backlog grew as well, 6% to EUR 3.1 billion, for a combined order backlog of EUR 9.7 billion at the end of June. With this, I hand over back to Ilya to go through the financials.
Thank you Patxi. G ood afternoon also from my side, ladies and gentlemen. Before now going through the financials of H1, as José mentioned, let me briefly go over again the latest financing packages that we see now on the screen. As you know and probably know, during the last two months, we implemented a comprehensive financing package with the support José has mentioned of our anchor shareholder, ACCIONA, to strengthen the capital structure and de-risk, especially our business and improve the liquidity to weather all those external shocks and further improve our positioning with customers and other stakeholders. In a brief summary of what we've done, we raised just shy of EUR 140 million via a 10% direct placement capital increase in the end of June.
It was done at market price, so no discount on the face value, and was picked up by the major shareholder, and thereby maximizing the proceeds available to the company, and of course, in return, increasing the shareholding of ACCIONA in the Nordex Group. Second, we closed a shareholder loan facility, a nominal value here of EUR 286 million. There's some discretion in that, but it is not only essentially, but its purpose is to repay the high yield bond of EUR 275 million, which matures at the end of January next year.
In the third leg, another capital increase done by rights issue, that was done in July, EUR 210 million, EUR 212 million , fully underwritten by a club of banks, participated again pro rata by ACCIONA, and was completed at the end of July with a take-up rate of shareholders north of 96%. That is a reason to be thankful to our shareholders, to other stakeholders involved in the transaction. We also believe strongly it's a token of confidence that people are putting into the market of wind OEM and into the company, Nordex. On the bottom, we can see the result, the pro forma equity ratio at the end of Q2 will increase to just shy of 23%, compared to the roughly 18% in Q1.
Similarly, our pro forma equity position as of Q2 will be just north of EUR 950 million. Basically strengthening all the three items I mentioned at the beginning. Now with that, let's move to income statement of H1. We said it earlier, the performance in the first half was generally soft to weak as we expected and indicated in our earlier calls. What was true for Q1 is true for Q2. In numbers, our sales stood at around EUR 2.1 billion at the end of the semester, compared to EUR 2.7 billion in the previous year period.
However, let me point out that our sales improved by about 28% to EUR 1.2 billion in the second quarter compared to the first quarter, as the pace of installations already picked up and we continue to expect those increases in our sales throughout the rest of the year. Basically, the reason for that is a significant step up in installations now every quarter until year-end. Gross margins stood at around 12% at the end of H1, mainly impacted by the cost inflation and increase of logistic costs, first and second wave. Our gross margins in Q2 were at around 10%-11%, 2%-3% lower than Q1, as we had to reflect those higher costs resulting from the volatile macro environment explained by José, especially Ukraine lockdowns and the ramifications.
We expect our gross margins to improve in the second half of the year once overall environment will have stabilized and higher margin projects gradually start kicking in. Our total direct costs from our internal initiative to reconfigure our production footprint are around EUR 30 million at the end of H1. In addition, we expect to book some indirect costs from this exercise into the P&L throughout the year, and this will include costs for scrapping obsolete machineries, costs to dismantle the factories, payback of subsidies, et cetera. Roughly a EUR 25-30 million ticket in total for the whole year. As a result, and mentioned earlier, the adjusted EBITDA before those one-off was at -EUR 144 million, while our reported EBITDA for the same time stood at -EUR 173 million.
With that, I will already move to the balance sheet. Briefly looking at it, overall structure remained in substance unchanged. We did end H1 with a solid cash level of above EUR 650 million. In addition, we have a cash facility of EUR 90 million, this taking the overall liquidity to, I would say, a solid, north of EUR 740 million at the end of the quarter. However, please note that the proceeds of EUR 212 from the rights issue mentioned earlier are not yet reflected here in those numbers as this transaction was completed in July. We now have a net cash position of EUR 270 million and an equity of almost 18%.
Again, when we show Q3 numbers, those KPIs are likely to improve once the rights issue proceeds are then factored in. With that, I'd go to working capital. Remaining at a solid level with a ratio of -10.8%. Again, similar to the last two quarters, driven by reaching milestone payments, largely compensating the increase in inventories. From a guidance perspective, the working capital ratio from our perspective will remain further below -7% for the current year. That brings me to cash flow. Cash flow from operating activities of minus just around EUR 220 million, EUR 218, mainly due to the negative operating results discussed earlier in the first half of the year.
Cash flow from investing activities was in line with last year and also in line with our ongoing investment program, which we will see in a second. Then finally, cash flow from financing activities stood at around EUR 145 million, which basically and largely reflects the cash portion from our direct placement completed end of June. With that, we would go to the investments, as said. Very briefly, nothing very substantial to report, but we did invest around EUR 90 million in the first half year 2022, and also above the EUR 75 million same period last year. The focus of the investments remained the same. Main investments were again in the blade production facility in India, as well as tooling and equipment for our higher installation level in the course of the year, especially second half.
All in all, also here in line with the guidance figure of approximately EUR 180 million for the full year. That brings me already to my last slide, capital structure. Again, as we have a negative EBITDA guidance for the current year, it would not be possible to show a leverage or reasonably show a leverage ratio. Let me point out that we will have a very little external senior debt once the high yield bond is repaid by the shareholder loan, as discussed. This effectively making the balance sheet structure pretty safe, irrespective of the leverage ratio. Equity ratio, I mentioned it, decreased to 18% due to the weak operating performance, and that we indicated earlier. However, again, it will improve with the transaction numbers factored in when Q3 numbers come out.
Much for the financials, and before going back to José Luis, maybe three quick comments, final comments from my side. The financing package I think we've seen has now strengthened, of course, the balance sheet again, given liquidity had room. Also, and we discussed this in our last analyst call, now taken out the uncertainty and has addressed on the, around the high yield bond and has addressed that topic for good. Second, to repeat that we expect the second half of the year, obviously from our guidance, to be better than the first one on account of higher revenues and installations increasing quarter by quarter and the better margin mix. Third, needless to say that we will continue to closely manage cash irrespective of those transactions and have a strong focus on the working capital management.
With those three comments, I would go back to José Luis.
Thank you very much, Ilya. Moving to the operational performance of the first half, what we see is that our installations have been lower compared to last year, partially due to ongoing challenges on the logistics side of the company, driven by indirect effects of Ukraine war and lockdowns in some of the Chinese ports, unavailability of key systems due to the cyber incident, and some weather-related challenges at the end of Q1, which also led to a shift of some projects in the second half. However, we should be able to catch up on the lost time in the second half of the year.
In summary, we have erected 416 turbines in 16 countries, approximately 1.9 gigawatts, again, with majority 75% in Europe, followed by close to 20% in Latin America, 6% North America. Our nacelle production, which was as well affected by availability of components and logistics and so on. We assembled 604 turbines compared to 685 in the same period of last year, b ut due to different product mix, we reached 2.9 gigawatts, which is nearly on the same level. Overall, the number of blades produced increased to 2,162 compared to 2,028 last year. We produced 573 in-house compared to 819 last year.
This trend is expected to continue or to stay at that level in the future. In summary, less installation driven not by availability of products, but by the availability of product, which is very much driven either by availability of vessels or availability of components. This situation we are now fighting to catch up in the second half. Moving to the next slide. No changes to our guidance, which now includes all recurring and non-recurring costs that we know. Ongoing reconfiguration of production footprint, cybersecurity incident, direct impacts from the war in Ukraine, supply chain disruptions due to indirect impacts from Ukraine war and due to COVID-related lockdowns in China.
Finally, we confirm as well our strategic mid-term EBITDA margin of 8%, once macroeconomic environment is stabilized and provided that we keep selling expected volumes with expected margins as we did in last quarter, and the cost side of the company stays stable. With this, I will hand over to Felix to open the Q&A.
Thank you very much for the presentation. Now I'd like to hand over to our operator. Please start the Q&A.
Of course. Thank you. If you would like to ask a question, please signal by pressing star one on your telephone keypad. If you're using a speakerphone, please make sure mute function is turned off to allow your signal to reach our equipment. Press star two if your question has been answered. As a reminder, it is star one if you would like to ask a question. We'll pause just for a moment to allow everyone an opportunity to signal for questions. We'll take our first question from Constantin Hesse from Jefferies. Please go ahead.
Hi there. Good afternoon. Thanks very much for taking my questions. The first one would be around pricing versus peers. I'm just trying to get a little bit more comfortable with the dynamics between pricing and your order intake because your order intake is up, whereas your peers are down. Your price and your ASP, even though I know it isn't directly comparable. However, the level of 79 is, I think it's the lowest, the biggest discount compared to your peers over the last five years. I'm just wondering what do you think is driving this? Is there a very big mix impact here, or are your prices simply lower compared to the competition?
Just any color you could give here and your comfort around the pricing that you're currently achieving and basically the ability to deliver the 8% EBITDA margin on these prices. Or potentially even raise prices even further to drive even higher margins potentially. Just any color there would be great. That's the first question.
Thank you very much for the question. This is Patxi Landa speaking. The orders that we are taking, the underlying gross margins of the orders, continue to support the midterm strategic profitability target. The margins are growing. From a pricing perspective, if you do the analysis and truly comparing ASP to ASP is not possible given the nature of the turbine type, scope, geography that affects the KPI. Nevertheless, if you take the market leader and you compare Q2 2021 until now, you will see that the evolution, the growth in the ASP is pretty similar. I can also share with you that ASP in the month of July this year was north of 0.86, so continues to grow very significantly with respect to Q2 2022, that was 0.79.
This is a month in July, where volumes were significant, hence the KPI is significant, and volumes in Brazil were significant. Brazil being a country whose ASP is generally lower than average. What I want to say with this is that from an ASP perspective, relatively comparing to peers, the evolution over the last four quarters is pretty similar. Nordex, comparing with ourselves, we are significantly growing ASP. The more important message of all is that we continue to apply a very strong pricing discipline and that the underlying margins of the orders that we are booking as we speak continue to grow, considering the cost base that is actually in the market.
From that perspective, we are not. It's true that we are winning market share, but we are not seeking to grow the company, and we will not, in the future, grow significantly the company. We believe that we have reached to a level, and remains to be seen the level of orders towards the end of the year. I don't anticipate that we will be making a repeat year. Probably will be a healthy order intake, but at a lower level that we achieved last year from a volume perspective, but from a margin perspective, significantly improved. I hope that answers your question.
That is very helpful, Patxi, especially the color that you threw into July ASP 86. That's definitely very helpful. Thanks. Second question would be on the footprint reconfiguration costs or the restructuring costs here. Sorry if I missed this. So far, you have booked EUR 30 million in there. Should we be expecting in the second half an additional booking into that, into that particular line, or are we gonna see one-off costs being spread out across other cost lines?
Yeah. Thanks, Constantin. This is Ilya. Let me take that one. The latter is the case. With those direct costs we were booking already in Q1, anticipating what especially the severance packages would be, I'm making a slight adjustment now in the Q2 from that direct by and large, and I mean almost entirely that would be it. Basically, the rest of the delta to those what we estimate to be EUR 70-75 million of restructuring cost for the entire year, you would see spread out in other lines somewhere between OPEX, somewhere between cost of materials. This, what we would call the indirect cost of the wind down of the factories.
That is helpful. Thank you very much. My third question would be around your guidance. I mean, since you've given the new guidance, you know, how has things been developing here in terms of relative to your expectations? Any worse, any better, any color here would be great. Thanks.
Let's do this together, Ilya.
Yep.
I would say the biggest uncertainty we have from now today to the end of the year, as you saw in the level of production and installation, is bringing products to the project. As a consequence of the Ukraine war, we are facing bottlenecks in vessels and availability of vessels and changing flags of the vessels from Russia to other countries and so on. This is the biggest uncertainty that we have. We think that the consequential impact of the cyberattack, we are finalizing, but we are still struggling with some delays in connecting wind farms to the grid in Germany mainly, but as well in other countries, and bringing products from Turkey to Central Europe.
A situation in China is improving, so it's not expected for prices there, but it's true as well that we need to catch up in the second half of the year. The biggest risk is stabilizing, which, you know, we are working on that. We think we have things under control, but it's a catch-up exercise that we are in. This is gonna drive very much where to land finally. Maybe, Ilya, you can put more color there.
Yes, I think José is happy to do so, you hit the two big points, which is it is not that much from what we see today, the exposure to the supply chain, because it's so largely locked in, given that we're in August of the year, and it comes down to the project execution as described by José. I don't think we have a different view on the really a different view on the guidance than we had when we last spoke together. The difference of course is, I think someone mentioned it, a record Q3 in execution, a very intense Q4 ahead of us. Of course, the risk profile, the more you're into those quarters, the more intense it is.
That will now very, very soon become clear to which part of the bookend of the guidance we will land, but it will be driven by exactly the factors José just described.
Okay. That's great. Thank you very much.
As a reminder, it is star one if you would like to ask a question. We'll take our next question from William Mackie with Kepler Cheuvreux. Please go ahead.
Yeah. Good afternoon. Thank you for taking the time and for the details so far. Maybe we should touch on your impressions of the outlook for the U.S. market. You know, you've maintained or mothballed capacity in the marketplace, and it seems the midterm prospects are now substantially improving. Any color you can give us on what you're thinking about when, you know, if the quantity of shovel-ready projects there are to go, or when the order intake flows might begin to change in North America, and where you see the U.S. potential ultimately emerging over a one- to three-year period.
Okay. Thank you very much for the question. Indeed, it's very good news.
The PTC restored to a very healthy level, adjusted for inflation 10 years. Provides very good visibility in the market. With respect to the short-term effect, which is your question on where we see the level ready, how customers are gonna react over the next one-three years, I believe that the good long-term, mid to long-term view that this new legislation provides is at the same time they're not providing short-term incentives for the market to react. Here we are talking, probably, the most dynamic market across the globe. Used to boom/bust cycles. Remember five, six, seven years ago, how the market was able to react from almost 0- 100 in a matter of months.
Remains to be seen, but yet in discussions with customers, they have been focused on different types of investments in solar PV. They, of course, anticipating this situation have been back to permitting and re-permitting projects. However, we will see, in our view, that the effects over the next 12 months will not be very significant. We see the market from a Nordex perspective, probably to continue to deliver similar levels to the ones that we have seen this year. We expect, and this is, we will see 12 months from now, but we expect the market to feel different levels of activity in the year 2024. That's the view that we have in the market today.
Thank you. Can you maybe just to build on that. Yes, the US market, we've seen the historic data shows very high volatility, but maybe you can throw a bit more color on some of the reasons why you think the takeoff this time will be a bit slower. You mentioned perhaps a bias to its solar installations, but are there other factors which will delay the speed of takeoff?
No, I don't think. I think it's incentive. It's the size of the window. I don't see customers with incentives to rush to invest. Of course, they are large customers that are building banks, and they are not in a position that either they start taking investment decisions over the next quarters or they will lose the opportunity. That situation, which was classical in the U.S. market.
Yeah
Doesn't happen now. That is the main reason. Other than that, of course, we take the view that the market will recover significant volumes. My only comment here is that probably this time it will take some time longer to see that happening. That's all.
Thank you very much. The other area of my question would be on demand, again, across Europe. I mean, we've seen initiatives like REPowerEU, very top-down oriented. We've seen a step change in the aspirations or targets in Germany, but a very slow level of take-up of some of the German opportunities. What's your thinking in Europe and particularly Germany as you run into 2023, and you know, the market may evolve, whether it is a growth market or whether limited access to grids or permitting is still going to hold back growth?
Probably a similar view. I believe that government has been addressing the appropriate points. I think the legislative changes on the EEG, on the Bundesnaturschutzgesetz and all of these are touching the appropriate topics for the market to recover. Of course, the volumes of the auctions that are going to be auctioned, the 12 gigawatts and then 10 up until the year 2028, all of that is there. You are touching also the bottleneck, which is the permitting timing. This is small things like appropriate staffing of government officials that need to go through the permitting. That is gonna slow down the takeoff. There are different views out there on when the market will reach the five, seven, eight gigawatts, so the very significant growth.
We take the view that, talking to the customers already, that there is a huge activity on the permitting side that we'll start to see and be visible over this half of the year and next year. Remains to be seen how big the bottleneck will be for the permits to see the light. That is, for me, the key element that will determine the size of the market. We take the view that 2023 will be also a transition year in that respect, albeit we want to see probably a market north of five, four or five gigawatts already, and then converting into the 7 and 8 gigawatts in the years after.
Thank you. If I may, one last, sorry, question. Again, perhaps a bit more theoretical but, you know, if we look back over the last 18-24 months, there's been a dramatic change in electricity pricing, both current and three year forward. There's been dramatic changes in PPAs, and the gap between the cost of onshore renewable power generation and the selling price in spot markets or merchant markets has got bigger and bigger. Is there any sign, and you talk about changing contract terms in your release, is there any sign that the wind industry or Nordex is having more success
Selling the value proposition of what you offer to your customers, which is enabling you to have much more, less pressurized price negotiation. You know, is there a change in the way from transactional to value based, which is in any way observed by the market changes in the last 12-18 months?
Yes, that is definitely the trend. Every market has its own dynamics, but it's true that the description that you made applies to many of the markets where we operate. It's also true that the increased pricing that we were discussing in the previous questions is enabled by these dynamics that you were mentioning. We are also in a process to maximize the value and value price the product that we sell because of this arbitrage between the electricity price that our products can offer with respect to the actual electricity prices that the market is seeing. That is providing room for us to start to capture more and more that value.
Thank you. I'll hand back to William Mackie.
If I can complement Patxi Landa, I mean, we share completely with you that the size of the wind onshore market is inelastic to a certain extent to the wind turbine prices. There is a huge arbitrage. At the end, pricing is a function of market dynamics among three market players, mainly. The three market players need to define the right pricing for the market in cooperation with customers. As important as the price are the terms and conditions, because if the world has become a more volatile place to do business, we cannot operate with the same terms and conditions as pre-COVID. Both are very important, and we are still in the game. We have as well our responsibility because we are not any longer a small player.
We are top two in Europe, so we have our responsibility as well to change the pricing and the terms and conditions of the market combined with other market participants to have a slightly more fair distribution of the value across the supply chain. Otherwise, the current profitability of the wind OEMs is not healthy. W e take that as a high priority for us. First price, second terms and conditions. We operate in a market with other market participants. We are not any longer the small player. We are, you know, a top player of the market, and we take our responsibility there.
Thank you very much. Very interesting.
We'll move on to our next question from Constantin Hesse from Jefferies.
Hi again. Sorry, can you hear me now?
Yes.
Yes, we can.
Great. Perfect. Just a very quick follow-up, just in terms of EBITDA. I mean, given the very large installation volumes we're expecting in Q3, should we already expect potential positive EBITDA in Q3? Just in addition to that, looking into the coming quarters, you know, going into 2023, 2024, if you were to look at your pipeline today, when could you expect to see, you know, the first quarter with 8% EBITDA margins? Thanks.
Let's do this together, Ili-
Yeah.
Ilya and I. If Patxi mentioned that last quarter, we saw with the 8% in mind, usually the timing to flow through the P&L is one and a half years, let's say, six quarters. That very much should be the quarter where we should start to see going to that direction, provided that the cost base of the company stays stable. As we mentioned before, some cost factors are relaxing a little bit, others are not relaxing at all, such as electricity prices, which is very great for the demand, but it's not that great for the cost. There is a timing effect between demand and cost. From now to there, Ilya, draw a line.
Yes. Draw a line, but don't forget the hiccups. Let me first try.
Yeah.
Take the other one, Constantin. On your Q3, given the usual sentence that we don't guide quarterly EBITDA, but yes. When I was saying that we don't see our full year guidance much different than we did talking to all of you last time, and we're saying that this could be viewed as a conservative guidance. Again, I think that is probably now put to the test in the next few already. From where we sit today, as much as I can give a bit of a foreshadowing of the next quarter, yes, since we-
Since the second half, we clearly expect to be substantially better and even positive. We might already expect something like that in Q3. Yes.
Thank you very much.
I'll add one more reminder to star one if you'd like to ask a question. It appears we have no further questions at this time.
Okay, excellent. Thank you very much. Thank you for your participation and, I'd like to say goodbye. Before we close the call, I would like to hand over to José Luis for your final remarks. Please go ahead, José Luis.
Thank you. Thank you, Felix. Thank you everybody for joining the call. As usual, I would like to provide you with our takeaways. As Ilya mentioned earlier, we have significantly reduced the risk for the company in this current volatile environment. We have a good platform ready for profitable growth. Our order book continues to be healthy, providing good visibility for 2023 and even for some parts of 2024. In the short term, our margins are impacted and continue to face challenges due to supply chain disruptions and volatile commodity environment. In parallel, we continue to take internal steps to diversify and to de-risk our production footprint by reconfiguring our production footprint to serve our main market and offset the operational risk.
We now have a well balanced and global footprint, Europe for Europe, India, and China, or non-European markets. Finally, we continue to feel comfortable with our guidance and mid-term targets, hope that the markets will stabilize in the mid-term to benefit from all the macro level policy developments in our core markets like Europe, especially Germany, but not only, US and to a lesser extent, South Africa. Another key markets for us, Australia and Latin America. With this all, thank you very much for your participation in our call and wish you a wonderful rest of the day. Goodbye.
With that said.
Thank you. Goodbye.
That concludes today's call. Thank you for your participation. You may now disconnect.