Ladies and gentlemen, welcome to the conference call of Norma Group SE regarding the presentation of the half-year report 2022. At our customer request, this conference will be recorded. As a reminder, all participants will be in a listen-only mode. After the presentation, there will be an opportunity to ask questions. If any participant has difficulties during the conference, please press star followed by zero on your telephone for operator assistance. May I now hand you over to Dr. Michael Schneider, CEO of Norma Group SE. Please go ahead, sir.
Yes. Thank you very much for the introduction. Ladies and gentlemen, welcome to our analyst call, Q2 2022. You all saw our Q2 reporting, and you all saw two weeks ago our profit warning for 2022 that we had to reduce our margin expectation for the running year. We will come back to that topic later and of course, to point that out at the beginning, we are not happy about that development, but we will come back to that later. Let us first come to the Q2 figures, 2022. I flip to Page 2 of our presentation that was distributed. In terms of sales, we increased our net sales to EUR 318 million, which is an increase of 12.9%, and an organic increase of 5.3%.
Our Adjusted EBIT of EUR 22.3 million, it is a decrease versus last year by 38%. We show for the second quarter an Adjusted EBIT margin with that of 7%. The resulting net operating cash flow is at the level of EUR 26.4 million, while the equity ratio is at the end of Q2 44.7% and net debt at EUR 382.8 million. We had our annual general meeting on May 17th, and all agenda items were approved by the AGM, and the AGM decided to have a dividend of 0.75 EUR per share. As mentioned, we have an updated guidance. We keep our sales guidance unchanged, which is medium to high single digits organic growth in sales.
Our EBIT margin of around 8%, with a previous expectation of around 11%, and a net operating cash flow of around EUR 60 million, which was previously around EUR 100 million. If you go to the next Page 3, to see some top-line development in Q2 and H1. We had a sales development in the first half year, 2022, that shows an increase of 9.5%. The top line increase in net sales by 12.9% to EUR 318 million in Q2 2022, compared to EUR 282 million in Q2 last year, mainly is referring to Americas. We had a very good development in sales in Americas and a positive currency effect. In terms of organic growth, as mentioned, 5.3% in Q2.
The performance in Americas was very strong. EJT sales increased to nearly EUR 168 million, with an organic growth of 0.7% due to a strong Americas business, but almost being offset by a weak development in China business in APAC. Our Standardized Joining Technology sales increased to EUR 147 million, showing a strong organic growth of more than 10%, 10.5%, mainly based on the U.S. water business and even the APAC region. While currency effects in terms of translation effects is at $21 million or 7.5% in Q2 2022. With that development, and this is shown on Page 4, we have a regional split that shows now 46% of our sales in Americas, 40% in EMEA.
You see the reduction of the share in sales in EMEA coming from 45% last year to 40% now, and a ratio in APAC of 14% of sales. We see also for the regions the sales development for the first half year, meaning in Americas, sales in the first half year, EUR 290 million, which is an increase of nearly 27%. The EMEA sales in H1 2022 decreased slightly by 3.7% to EUR 246 million. In APAC, sales increased slightly in the first half, 2022, to EUR 87 million, meaning an increase of 2.9%.
If we take a deeper dive into the regional sales, which is shown on Page 5, we see for EMEA an organic decline of 1.1% in our Engineered Joining Technology business in the second quarter, which is mainly due to a weaker automotive business, which is also related to the Russia-Ukraine crisis and partly compensated by positive pricing effects. The Standardized Joining Technology in EMEA declined by 3.3% in Q2 due to lower volumes and partly also compensated by a higher pricing. In Americas, we saw an organic growth in Engineered and even Standardized Joining Technology. In Engineered Joining Technology, we had an organic growth of 13.4% in the second quarter, which is mainly driven by a very positive pricing.
In the Standardized Joining Technology, which also includes the Water Management business, we have a strong double-digit organic growth of 14.9% in the second quarter, which is mainly related to the U.S. water business growing more than 20%, 20.7% in the first half of 2022. In APAC, we have a different picture in EJT and SJT. We had an organic decline of 13.4% in the Engineered Joining Technology business, mainly due to the difficult China business, which is mostly based on the COVID-19 impact and the lockdowns in China, which were hurting the second quarter significantly. We had a strong organic growth of 20% also in the SJT business, also due to positive water business in India, Malaysia, and even Australia.
Based on these sales developments, we see the margin development on page six on an overview. We see that we have for the first half year 2022 an Adjusted EBIT margin of 8.5% and 7% in the second quarter. We saw that weakening Adjusted EBIT margin based on external and even internal effects. External effects were high increase in gas and energy prices, as you all know and read in the newspapers, with a further increase of inflation and ongoing effects of the war in Ukraine. Of course, we also still have the corona impacts, and we saw that especially in the second quarter in China with the risk of further lockdowns in China.
What we saw a higher cost in our operations, business and our supply chain, which means logistics costs and operations costs are higher than what we budgeted and expected, as well as higher IT implementation costs based on these developments in operations and logistics. The margin for the first half year at 8.5% EBIT margin, meaning for the second quarter at 7%. With that, I hand over to Annette, our CFO, for a couple of more details on the financials.
Well, thank you, Michael. Let's have a deeper look at the P&L development and in particular to the corresponding margins. The material cost ratio increased by 430 basis points, and the gross profit ratio decreased by also 430 basis points in Q2 2022. This is mainly due to already mentioned higher costs, in particular related to the global supply shortages, to higher inflation and to effects of the Ukraine war, here in particular, the additional pressure on our main raw materials, steel and resin, driven here by higher energy costs. Looking at the personnel costs, we see an improvement in personnel costs and in the personnel cost ratio by 70 basis points to 25% in Q2, and by 50 basis points in H1 respectively.
This is majorly due to our downsizing of plants, in particular here, Serbia and Germany. Our OpEx increased by EUR 11.9 million to EUR 50.2 million. This leads to a ratio of 15.8%, mainly due to a higher number of leased workers and IT implementation costs. Consequently, our Adjusted EBITDA margin decreased by 590 basis points to 11.6%, and our Adjusted EBIT margin decreased by 580 basis points to 7% in Q1 and to 8.5% in H1. Coming now to our operational adjustments on the next slide.
The message of the slide is that we operation-wise adjust nothing, so our adjustments refer only to PPA related adjustment, which brings us to a reported net profit of EUR 26.7 million, an adjustment of EUR 8.3 million, and by this, an adjusted net profit of EUR 35.0. Our reported earnings per share is EUR 0.84. The corresponding adjustment is EUR 0.26, and our adjusted earnings per share is EUR 1.10. If we look to the next slide, we can see here again, on the one hand, our dividend paid, Michael already referred to that.
We paid a dividend of EUR 0.75 per share, which corresponds to around 33% of our adjusted group net profit of the fiscal year 2021, and this has been paid in May. Adjusted earnings per share are amounting to EUR 0.44 and we see a corresponding adjusted net income of EUR 14.1 million in Q2. This shows in H1 an adjusted earnings per share of EUR 1.10 and a corresponding net income of EUR 35 million. Reported EPS is in this case EUR 0.31 corresponding to EUR 10 million net income and for H1 EUR 0.84 corresponding to EUR 26.7 million. Referring to our equity ratio and our net debt.
Our net debt increased by 20.2% mainly due to the dividend payment of EUR 24 million paid in May and business seasonality, which increases with the higher portion of water business. Our leverage is showing an increase to 2.5% due to higher net debt and due to the lower EBITDA. Our equity ratio slightly improved from 44.6% to 44.7%. We are based on a very solid maturity profile. I think this we want to mention as well. Our next larger refinancing is due in 2026 and we have no potential cross default risk anymore, so solid basis for that. Coming to the net operating cash flow development.
Our net operating cash flow is impacted, on the one hand, by the decreasing of our hedging programs by EUR 6 million to EUR 56 million by the end of H1. A lower Adjusted EBITDA with a higher working capital outflow leads us to a decreased net operating cash flow before CapEx of EUR 27.7 million compared to EUR 59.1 million in H1 2021. CapEx spendings have slightly been decreased. We spent EUR 17.9 million in H1 compared to EUR 19.8 million in H1 2021. This is resulting to a net operating cash flow of EUR 9.8 million compared to EUR 39.3 million in H1. Coming now to the NORMA Value Added, which is NORMA's long-term strategic target.
We can see there that the NOVA is amounting to EUR 4.2 million, which is EUR 17.4 million lower than the comparable figure for H1 last year, which was EUR 21.6 million. Yeah. By this, I hand over again to Michael.
Yes, thank you very much, Annette. As I mentioned earlier, we adjusted our guidance for 2022. Of course, we put quickly a task force together regarding our performance improvement program. So far this task force defined the basic structure of that improvement program, which is focus number one for the next weeks, months, and also for the next year. This performance improving improvement program has three focus areas. It's stabilizing measures, especially short term for 2022. We have additional efficiency measures on a midterm perspective to sustainably improve the profit situation.
On a mid- and long-term perspective, we have structural measures to further increase overall efficiencies with the clear target to pursue our profitable growth strategy for the future in our three strategic business units, Mobility & New Energy, Industry Applications, and Water Management business. These are a part of our performance improvement program, where we integrate all of the different measures and programs so that we have one program that will be managed, if it's global excellence, Get on track, pricing, operations improvements, in one integrated program, with a focus on operational improvements internally. This is the basis to further stabilize and bring us to a significantly better margin level.
Because if we take the outlook of 2022 as updated company guidance, which we show on Page 14, we have external and internal reasons for these adjustments. You know, all the external aspects in terms of ongoing material price increases, inflation, even in the second half of 2022, and from our point of view, probably also 2023, regarding gas, energy, and the subsequent consequences. We still have the war in Ukraine ongoing and not seeing an end, and we have further lockdown risks in Asia Pacific, especially in China. We must say that we have internal challenges as well, in increased costs in business operations and supply chain, partly related also to COVID, and the consequences.
We see that the relocation of the plant Gerbershausen, which we are closing in the course of 2022 to Maintal, Czech, and Sweden, is not as efficient as we would like to have it. We have, in consequence out of that, some higher IT costs, IT implementation costs. All that in total leads to the adjusted company guidance unchanged on the sales perspective, EBIT margin around 8%, net operating cash flow around EUR 60 million, and the NOVA, NORMA Value Added between -20 and 10 million, out of that adjusted guidance for 2022. This gives an overview on the current situation, and of course, as the moderator pointed out earlier, we like to have it open for your questions.
Thank you. Ladies and gentlemen, 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 your mute function is turned off to allow your signal to reach our equipment. Again, press star one to ask a question. We pause just for a moment to assemble the queue. We take our first question from Philipp Loehrhoff with Berenberg. Your line is open.
Thanks very much. Good afternoon. A couple of questions from my side, and the first one is more on the organic growth in Q2 H1. If I remember correctly, you told us in Q1 that about 6 percentage points of the organic growth was realized through pricing. Could you give us an update on Q2 and on H1, please?
Yes. Thanks, Philipp, for your question. If you take the first half year of 2022, we had pricing impacts overall of +7.9% and a volume impact overall of -4.2%.
Okay. That's perfect. Is there a big difference in pricing contribution within the different regions?
Well, we have in the regions differences according to the business structures. For example, we have a split or the most important impact comes from Americas, where we have 10%+ and around 5% in other regions.
Okay. Perfect. Thank you. Then I've got a question as well on the plastics. Are there indexation clauses with regard to that specific input? Is it easy to pass through the increase in plastics prices as a result of rising energy prices to your clients? Perhaps you can tell us a little bit how the sourcing is organized here and how transparent the market prices are.
Well, if you take the plastics area in terms of resins, polyamides, we see also price increases. We are increasing also the plastics material prices, but there's no fixed index. It's a bilateral negotiation with our customers. We have to see that the market overall is a very, let's say, oligopolistic market in four, five, six suppliers for plastic, for resins, for PA66, PA6. Insofar, prices are increasing also for resins and bilateral negotiations with our customers, but not an index.
Okay.
That is increased currently. The pressure is increased even that the first suppliers, they already started to declare force majeure and that they will supply clients like us with a lower quantity. They shrink that quantity by 20%. Things like this are happening for the time being.
Okay. I mean, I remember the situation in 2018, and you had similar issues, if I remember, 2018, 2019. I guess, like with regard to plastics, which is probably still a good part of your product mix, it's a bit of a mess, and that's where the most of the pain is being felt, no?
Exactly. It's plastic materials, resins, and even still, steel.
Yeah, for steel, I guess it's easier to pass that through to your customers.
Yeah, yeah. Yeah, exactly.
Okay.
Yeah.
Perfect. It's a very actual topic as well, I guess, especially with regard to plastics and the force majeure. Are there any negative impacts that are to be expected from the drought and low rain and generally river levels in Germany and Europe?
Yeah. That's a good question, Philipp. The low rain and the shipping possibilities, we currently don't see it. If the draft is going on and the level of water is going down, of course there might be problems. Currently we cannot see direct impacts.
Okay, perfect. I'll have like one more question for you with regard to net debt as well. That's for Annette. How is the feeling regarding the net debt levels, especially with regard to the covenant and the current net debt to EBITDA that is about 2.5x?
All in all, for sure we are increasing in terms of leverage. That is majorly caused by the dividend we paid. What we expect is that we decrease again by the end of the year. I expect leverage around 2.2, 2.1, something like that. For sure, for the time being, we are missing EBIT. On the other hand, we finance, I would say, more expensive raw materials, so that it is all about. I have no worry there. We will de-lever in the second half of the year.
Okay, perfect. The last one, and I'm back in the queue. Because all the price increases make the comparison base a little bit difficult. How much sales would you think that you can deliver based on the current setup and also based on the current pricing situation, so assuming no further price increase and excluding the closure of Gerbershausen?
I didn't get it acoustically, the last part of your question.
Oh.
Closure of what?
I was saying, if you exclude as well the closure of the German plant, that is going to take place this year.
Well, we transfer the product from that plant into other plants, like, in Germany, Czech, and Sweden. So far there will not be, let's say, a structural change in sales. It will be transferred to other locations and the sales will come from the other locations.
Yeah, I get it's just taking some time. If we assume no further price increases, what would you say is the kind of sales level that you could cover with the current setup and in production without having to spend more money on basically growth CapEx?
Well, we stick to our guidance, mid- to high-single-digit organic growth in terms of sales. If we take the sales change, it will not be impacted by that. It will not be impacted by that relocation.
Okay, perfect. I'm back in the queue. Thanks.
This relocation has been planned for long. Hence the decision has taken place in 2019, and since then we are realizing that what we are suffering now about is that, I would say, the closure or the closing of, in particular, this plant in Eastern Germany, that brings inefficiencies. There's nothing what we didn't plan. We didn't plan that we will suffer so much in terms of efficiency. The plan itself, I would say, is fully according in terms of volumes and transformation to other countries, is fully according what we planned.
Okay. Thank you.
Welcome.
We take our next question from Ingo-Martin Schachel with BNP Paribas. Your line is open.
Yeah, thanks for taking my question. The first one would be on your performance improvement trajectory into the second half. Thanks for already shedding a lot of light on pricing and input costs. My question would be on the internal factors, the plant closure in Thuringia and the IT implementation. Can you give us a rough indication whether it's going to get worse or the profit burden in the second half will be higher before it gets better next year? Also when it comes to your profit improvement program, you've not given us any numbers in terms of savings, which is of course understandable.
Can you confirm that the mid to long-term profit ambition after execution of the program would be comparable to the low to mid double-digit levels on the low to mid-teens levels you had in the past?
Well, Ingo-Martin Schachel, let's take you on your second question first. Of course, we want and we will improve our EBIT margin significantly. Of course we want to be significantly better in the EBIT margin going into the right direction. This is for sure the target. Nevertheless, we have to see that we first have to, let's say, make some homework regarding the relocation from Gerbershausen to Maintal. The challenges are clear. Measures are defined. It's a matter of execution.
Okay, in terms of the impact of the Get on track inefficiencies, is it going to get worse in the second half?
If you take the guidance, if you take the level of 7% in Q2, and we want to go to around 8% for the full year, we need to see a sequential improvement in Q3 for the next step.
Mm-hmm. Okay. Understood. On your revenue developments on the EMEA revenue growth rate in the second quarter, I think you had disclosed that there could be a mid-single-digit pricing effect. If I strip that out, it looks like your EMEA volumes might have been down mid- to high-single digits in a market that was probably flat when it comes to light vehicle production. How do you feel about your revenue growth rate in EMEA in the second quarter? Are there any particular reasons for potential underperformance, clients not accepting price increases or other factors that contributed to a weaker quarter?
Well, thanks, Ingo. I think there's not a reason for being weaker than market because if you take the market and take LMC figures for Q2, I think Q2 showed for the second quarter, +1.4% in light vehicles and -28% for heavy vehicles. We are in terms of sales down 6%. If you take light vehicles and heavy vehicles, we are roughly in line with market.
Okay. Well, that explanation makes sense. Just quickly on the market expectation for the second half, in your guidance, have you incorporated higher light vehicle production in the second half than the first half? Or, should your guidance also be achievable if the vehicle production only remains flat sequentially?
Well, we are very confident and keen to hold our sales development. In terms of pricing, we see good development. In terms of volume, it develops as we expected, relatively flat in the second half year.
Okay. Thanks very much.
Thank you.
Once again, ladies and gentlemen, if you would like to ask a question, please signal by pressing star one on your telephone keypad. That is star one to ask a question. We pause just for a moment to allow everyone an opportunity to signal. We take a follow-up question from Philipp Loehrhoff with Berenberg. Your line is open.
Yeah, thanks for taking the follow-up. Just regarding the organic growth guidance that you have mid- to high-single-digit in terms of organic growth. In Q1, you were saying that basically about half of the, or let's say around mid-single-digit would be the pricing contribution. Do you update that after H1 or do you stick to that comment?
Well, we stick to that comment. We have a higher portion in terms of pricing, which comes because the energy prices, gas prices are furthermore increasing. This is what we also reflect in the sales prices. That prices are going, let's say, slightly up, while volumes probably are a little bit weaker than what we expected so far. A different development, prices pricing up, volumes down.
Okay. Would you say that?
That is, Philipp, that is natural in the business because in particular our alloy surcharge, we were pretty successful in cutting down the timing of recharging that, but with a few even not, and these will be invoiced in the second half. Naturally it has to go up in the second half in terms of pricing as well.
Yeah, that was basically the take from, you know, the full year call and the Q1 call as well, that depending on where prices and costs were heading, probably prices.
Mm-hmm.
Had to be adapted as well quickly. Just in terms of modeling, would you then say now, like the EBIT's, it's moving like both ways for pricing up and for volumes down by a couple of percentage points? Or is it just like way too much in terms of estimate right now?
Well, we have to see how this will figure out. Probably it's a very volatile situation that there's no, let's say, fixed answer on that currently.
At the end, it all depends on inflation. We go so often to the customer as we see inflation's up, incoming prices. At the end, the pricing what we do needs to cover inflation and a portion more in order not to dilute the margin.
We discussed the automotive business with our sales teams. If you look on the development of the automotive business over the last 1.5-2 years, in terms of material price increases, inflation, et cetera, pricing is getting a normal part of automotive business. Five years ago, the only pricing initiative was taking prices down. That changed completely. Pricing and giving that part to also OEM customers is part of the normal automotive business meanwhile.
Mm-hmm. These are a couple of really interesting remarks that you make, actually, Annette as well with regard to, you know, basically using the pricing to keep the margin and not just keep the profit. Would you reckon that you face good chances that this is going to be the case over the years now because there's a bit of a change in paradigm in the automotive sector?
Sure. At the end, there is a change. We contact the customer nowadays, depends on the customer, two, three times a year. In the past, we had fixed contracts and which gave us already a reduction of the price. That really fully changed. Even in automotive and also in particular, also in industry business and water, we did already the fourth, fifth price increase, and that's incredible. I think this you read each and everywhere in the newspapers, and the same do we.
Okay, thank you for these remarks.
Thanks, Philipp.
We take our next question from Nicolai Kempf with Deutsche Bank. Your line is open.
Yeah, Nicolai Kempf speaking from Deutsche Bank. Thanks for taking my question. My first one would be actually a bit more in the short term. We've heard from some suppliers that their OEMs are willing to share costs with them regarding material prices. Can you also confirm this?
Well, if I understood you correctly, to confirm, if they're willing to share costs. Of course, nobody of the OEMs want to share costs. Let's say, of course, they have negotiation with our customers. I think there are clear arguments in terms of a very transparent material price development, even for steel-based prices and alloy surcharges. Together with them, we see a very good and constructive development that they share that. On the other side, probably in the alloy surcharge area, it's also going in the opposite direction when in the future alloy surcharge prices are going down. It's a certain partnership, and there is, of course, the trend to share the costs.
You can see that at the end, the OEM is taking the responsibility. They are not knocking on our door. They wait until we knock. We have contracts, and therefore, you have to knock. At the end, if that would be a business problem, then they would stick to their contracts. They see and they know that there's something to do, but they wait until you contact them.
At the end of the day, what we see is that we have mission-critical, small mission-critical parts that also our customers need. We love to deliver these products to them. Nevertheless, also our customers and also we must have fun in selling these products. This is what we do together in a certain, let's say, business partnership.
Okay. Thanks. Understood. My second one would be a bit more long term, 'cause I'm struggling a bit with your equity story currently. Over the last year, you've done very successful M&A, especially in the water business. Give me a call whether this strategy doesn't work anymore. How do you shift the perception from being an automotive supplier to more like a CapEx name for the capital market?
Well, Nicolai, we are constantly looking in Water Management targets to be very open. You also saw our leverage of 2.5 at end of June. Looking onto the leverage and looking onto the, let's say, macroeconomic risks that we might have and following a more, let's say, conservative financial policy, we have to see what we can do in 2022 or what we can do in 2023. Independent from that, we would love to buy a new Water Management product target.
Good answer. Thanks.
Welcome.
We take our next question from Andres Gujan with Carnot Capital. Your line is open.
Yes. Thank you. I have a question on the cash flow. You show EUR 10 million net operating cash flow after working capital and after CapEx. Now, the net debt has increased some EUR 60 million. And of course, you paid interest and taxes, but that's only EUR 15 million. Where is the difference or where has the other EUR 55 million gone to? What's missing?
Well, at the end, if you look to the.
In simple words.
If you look to the net cash flow, and we refer here to the operating cash flow, we paid a dividend, and that is in the net debt. We paid a dividend
Right.
Roughly EUR 24 million-EUR 25 million. We are referring in our things here to the net operating cash flow, and that is not considering the finance net cash flow. Therefore, the dividend is the major bulk of it.
If you take tax and interest, so that's two major topics. It's a pure operating cash flow, and you have to deduct even tax and interest to come to a certain free cash flow.
All right. Yeah. That's EUR 15 million, right? Tax and interest. Plus dividend, EUR 25 million, then we're at EUR 40 million. Yeah. Net debt has increased EUR 60 million.
Well, in the end, that's also inflation. We stepped up in working capital. All this is higher prices, and we have for sure a huge currency impact this year as well.
Okay. Generally speaking, how comfortable are you with your balance sheet? I mean, you had nice organic growth, but you had, in the end, your net debt is increasing. You have a leverage of 2.5. How comfortable are you facing all these risks that you list from Ukraine to China, et cetera, et cetera? Are you also preparing measures there?
As I said, we are for sure. We are all the time optimizing our working capital and so on. At the end, we are in a specific situation. We have to counteract inflation. For sure, for the time being, we buy in terms of raw materials, steel and granules, whatever we can buy in order to secure the lower prices for the time being. On top, in terms of financing, we have an excellent financing for an excellent interest. We need to refinance in 2026. I'm not at all worried about that at the moment. For sure, we increase our.
We optimize our working capital, but the exposure of Water Management is increasing, and there we need stock, certain stocks in order to cope with the seasonal demands of this business. That is a change currently. I'm not at all worried about any kind of liquidity or solid balance sheet basis.
Andrew, maybe one remark regarding also in connection with Nicolai's question earlier regarding M&A possibilities. We see that we have a very stable and strong balance sheet position. Of course, we are currently at 2.5. Nevertheless, typically the second half here, and this is also what we expect for 2022, is cash stronger. What Annette pointed out earlier, to go from 2.5 to 2.1 and 2.2, that's fine. What I mentioned regarding M&A activities, currently, we would be very cautious in doing additional M&A activities based on that conservative financial policy. So far, we believe that this is a quite conservative approach, and we do not see risks in our balance sheet.
Okay. Thank you very much.
Welcome.
As a reminder, that is star one to ask a question, star one to ask a question. It appears there are no further question at this time. I'd like to turn the call back to Dr. Schneider for any additional closing remarks.
Yes. Thank you very much. Ladies and gentlemen, we would like to thank you very much for participating in our call. Once again, what I mentioned earlier, we are not happy with our profit warning. Independent from that, we have and are in the process of defining a significant profit improvement program. We have a stable balance sheet. We have a good long-term growth strategy focusing on profitable growth that is intact, and this is what we will do. Thank you so much for participating. All the best for you and of course, the most important, stay healthy.
Ladies and gentlemen, thank you for your attendance.