Ladies and gentlemen, thank you for standing by. Welcome to SGL Carbon conference call Q1 Results 2020. Throughout today's recorded presentation, all participants will be in a listen-only mode. The presentation will be followed by a question-and-answer session. If you would like to ask a question, you may press star followed by one on your touchtone telephone. Please press star followed by zero for operator assistance. I would now like to turn the conference over to Claudia Kellert. Please go ahead.
Thank you. Welcome to Our Conference Call about the business development and the Financials of the First Quarter 2022. Furthermore, we would like to give you an outlook on our expectations for the upcoming months and on the possible impact of the terrible war in Ukraine and the shutdowns in China on our business. On behalf of SGL Carbon, our CEO, Torsten Derr, and our CFO, Thomas Dippold, will lead you through the call and will answer your questions after the presentation. Mr. Derr, please go ahead.
Yes, Claudia, thank you very much. Good afternoon, everyone. This is Torsten Derr, and I'm very happy because we had a very strong start in 2022. Our order books are filled, our plants are running flat out, and Thomas is going to present you later on excellent figures. But I would like to start with a different topic. Can you please advance to the next slide? This is a war in Ukraine. There is, until now, hardly any impact of this war. I would like to start with the first point. We don't have any employees or assets in Ukraine, in Belarus or Russia, so not affected by any shutdowns.
Our sales, which we had in Belarus and Russia, are much less than 1%, and we stopped this business directly after start of the war. It was pretty easy for us to compensate this in other regions. Also checkmark at sales, no impact on the sales side right now. Our transport routes were partly affected. We used to save CO2, the Trans-Siberian Railway, which is not possible to use anymore for transport from Europe to China, and we switched to sea transportation. Also checkmark, no impact on our business. For the energy price increases, which we observe, and they are significant, and we decided here for a very special strategy.
We hedged the volumes and the prices of 85% of our energy exposure because our order books are so full and we want to run our plants at full capacity. This was a strategy, and it seems to pay out. Of course, there is a risk of a gas embargo, but this we cannot see right now and has not impacted at all our business so far. With this outlook to our Ukraine position, I would like to hand over to our CFO, Thomas Dippold.
Hello, everybody. This is Thomas Dippold. Yeah, thanks, Torsten, for the handover. Maybe as a summary, I would like to present you how we performed so far in the first quarter. We have reached EUR 270.9 million group sales, which is 12.2% up compared to the same period last year. Our profitability reached EUR 36.8 million, which is again an increase of 11.5%, which is also good, and this keeps the margin more or less intact. Our equity ratio increased further by another 3.6%, from 27%, which we had at the year-end, and we are now at 30.6%.
This is exactly the lower end of our target that we wanted to reach with the equity. When we compare it, at the end of 2020, we had an equity ratio of 17.5% and now reached 30%. This is a remarkable increase that we see there. Good news that has reached us some one and a half weeks ago, Moody's, the rating agency, upgraded our corporate family rating from Caa1 to B3. We also see a further acknowledgement of our efforts in strengthening the balance sheet and of course, raising the profitability of SGL. This is a good recognition also from Moody's, and we are very happy about that.
Talking about the business, I think Torsten has summarized everything so far. So far, the risks, except the gas embargo from Russia, everything so far seems to be manageable. At least in Q1, we didn't see anything which we couldn't compensate. There's still a good order book, and the demand from our main markets like LED and semiconductors, especially in the GS business, is very strong and ongoing, and also the industrial business is catching up and recovering. This is good news also for the upcoming months. The energy prices, as Torsten said, have been secured to a large extent and the prices have been fixed. This affected also a little bit in this relation, Q1.
We come to that later, especially when we talk about the business unit CS. Last but not least, the corona lockdowns that we see in China, especially in Shanghai, yes, they do affect in a certain way the logistics and but so far, we've made it somehow to keep our production facilities up and running. Coming to the outlook, we still confirm with the Q1 figures, what we presented with our full year 2021 report some four or five weeks ago. We still confirm our guidance from today's perspective, which is EUR 110 million-EUR 130 million EBITDA pre. The sales shall be approximately EUR 1 billion as we published.
When we look at the particular development of our profitability on slide six, if you don't have or can't follow the presentation online, but have it maybe as a printout from our website, then you see that our sales reached EUR 270.9 million compared to EUR 241.5 million in the first quarter of last year. The EBITDA pre reached EUR 36.8, which is another 3.8 up compared to the same period last year. In fact, the margin of the EBITDA remained almost the same. We've reached 13.6% compared to 13.7%, which we had last year.
This also shows that on the one hand side, our savings, which we had from our transformation, are sustainable, and we can continue with that, and it follows on. The other interpretation of this profitability is maybe also valid that we can say every increase of the cost can also be put to the customers. In the end, we keep our margin intact. When we look at which business unit contributed to that sales increase of 12%, then we can say it's a broad-based development. Every operative business unit contributed to that. First to mention, Graphite Solutions with EUR 11 million increase compared to last year's Q1. Composite Solutions with 7.2 million. Carbon Fibers with 6.6.
Last but not least, Process Technology with EUR 6 million flat. When we take a deep dive into the relevant BUs, you see on slide seven how Graphite Solutions performed. Sales went up by 10.4% and reached now 119.6 million EUR. The driver for this top-line development is mainly the ongoing, very strong development in our semiconductor and LED business. They see an increase of more than 50% year-over-year, and this is a business which is very strong regarding the margin. Our industrial business is also catching up and recovering, and we see a further improvement also there. The profitability rose further or grew stronger than the sales did. The EBITDA pre reached 13.1% up compared to Q1 2021 and has now reached 25.9 million EUR.
The margin is 21.7%, which is more than 0.5% up compared to the same period last year. This also underlines the very strong development that we see in our Graphite Solutions business. They could overcompensate the higher raw material cost, the energy cost by additional cost savings and price increases, and this really showed the margin improvement that we have there. I'm coming to the smallest of our business units, which is Process Technology on slide number eight. This is the business unit, the smallest business unit, as I said, with the highest growth percentage. This went up by 31.1%, which is and reaches now EUR 25.3 million.
We mentioned at the end of last year that the order intake was very strong in Q3 and Q4. This materializes now in the sales. They went up by over 30% and also the profitability went up by EUR 2.5 million. You can't express that in a percentage because in Q1 last year, PT made a loss of EUR 0.5 million, and they are now reaching EUR 2.0 million EBITDA pre, which is a very strong development. They really achieved the turnaround in the first quarter, and we are very happy and very proud with it. The margin of the EBITDA pre compared to sales has reached almost 8%, and this is really a development that goes right into the right direction.
They also made it that they could pass on the higher raw material cost, which is mainly steel for them to the customers. They also see with the increased sales, a higher utilization of the production facilities. On slide nine, you see the development of our Carbon Fiber business unit. They also saw a strong increase in the top line, despite the fact that they're almost fully loaded, which goes in line with the way they produce, because they're ongoing lines that are permanently being run, and they could increase the sales without any capacity increases by another 8%. There's two reasons for that. On the one hand side, it's a higher demand from automotive, which has a higher margin compared to other businesses.
The second reason for that is that the prices could be increased with the customers in an overall effort. This also boosted the top line quite substantially. However, the EBITDA went down significantly by over 60%, coming down from EUR 13.9 million in Q1 2021, down to EUR 5.4 million in this first quarter of the year 2022. The reason for that is that we have some one-off costs related to the energy transaction in order to make sure, as Torsten has pointed out, that we can run the whole year with fixed energy prices. This is to secure our production and also supply capabilities to our customers.
Whatever happens on the energy price development, we will no longer be affected or hardly affected by that, because to a large extent, we are secured price-wise for the full year. On slide number 10, you see the development of our Composite Solutions, the second smallest of our business units. Last year, we could report a turnaround starting from Q1, and this has even further developed. The sales went up by over one quarter. They've reached now 25% increase, reaching EUR 35.8 million in the first quarter 2022. The whole upward trend is confirmed, and this has mainly been driven by our automotive customers.
When we look at the bottom line, the EBITDA pre, there we see a very strong development coming from EUR 1.8 million in the first quarter last year, and we've reached EUR 6.3 million in the first quarter this year. Where does it come from? On the one hand side, we have a higher capacity utilization. We have further cost savings from our restructuring efforts, and we focus on very high margin products, and all this boosted our profitability quite substantially. However, there's a one-off effect in the EBITDA pre, which are compensation payments from automotive customers, which affected the EBITDA pre, and they are not the case that this can go on throughout the whole year.
EUR 2.4 million out of the EUR 6.3 million are one-off compensation payments, which are shown in the EBITDA pre. Operationally, the result has slightly more than doubled. Reported, the result has tripled. Last but not least, on slide 11, you can see also the development of our corporate business unit, which is the only non-operative business unit where we just comprise all corporate functions and corporate services. There you see that the sales have gone down significantly, and we did that intentionally. With the divestment of all non-core or non-operative lands, therefore, we don't get any rental incomes any longer from the properties.
Also with the services which we can't charge to any divested businesses anymore, the sales go down significantly by EUR 1.7 billion. Again, this is also our intention. Our corporate business unit shall be a lean internal service provider, which is just supporting the corporate needs that we have, but not doing businesses for other parties. Two years ago, we still saw some on a full-year basis, EUR 30 million sales there. In this year, it will be around EUR 10 million. This is just whatever we charge to our joint venture in Meitingen with Brembo and all the other costs are just the overhead costs that are remaining for SGL.
When we look at the EBITDA pre, you see a remarkable improvement coming from EUR -5.1 million in the first quarter last year. We now achieved only, so to speak, EUR -2.8 million, which is an improvement of EUR 2.3 million compared to the same period of last year. The reason for that is we've done our homework in our transformation. We have lower personnel and lower administration costs. Indirect spend went down significantly. In the end, with lower sales and better profitability, we have a EUR 4 million improvement overall in this business unit. On slide number 12, I will show you maybe the most relevant KPIs besides sales and EBITDA in the various business units.
We have a strong development, as you can see here on the left side of our net result. You probably remember before 2021, our net result has been negative for many, many years. Now in Q1 of this particular year, we reached a net result of EUR 21.4 million, which is an improvement of EUR 15.3 million compared to the same period last year. Half of it, which is, or to be precise, EUR 8.5 million, is a one-off effect coming from the sale of our heritable building right in Griesheim, which we published on the thirteenth of March via an ad hoc message to the capital market. There's more to come later throughout the year.
When we look at our equity ratio, then we see that we went up, and I mentioned that at the very beginning, by another 3.6%, which is good. The driver for this development is on the one hand side, the strong profitability which we show in Q1. The second is also, and this is worthwhile to mention, that the long-term interest rates are also, that they went up. This also helps regarding the valuation of our pensions and the relevant counterpart, and it's always the equity. Last but not least, also the net financial debt, it went up only slightly by 4%, which is, well, we expected that, but still it went up a little bit.
However, it's -20%, if you compare it to the same time of the year last year. Last but not least, maybe worthwhile mentioning our ROCE, our return on capital employed, has now reached 8.3%, and this is another 0.3% improvement compared to the same time last year. I think I could show exactly what Torsten was mentioning at the very beginning. We had a very good Q1. We are very happy with that development. I think that the figures show that what Torsten has promised at the very beginning. I hand back to Torsten to guide you further on through the presentation.
Yes. I like this sentence, our operational challenges are manageable, and the geopolitical effects are difficult to predict. I want to show you what we mean with this. Our drivers of the business fundamentals are very stable. We have a strong demand in all business units, and our order books or the order backlog is very comfortable right now. The orders are not going down through this Ukraine effect. Especially the semiconductor and the renewable energy industry is supporting our business, and we also see no sign of decline there. We were able to sign contracts for very nice automotive businesses in the business unit CS.
With all the price increases, which are coming from energy, from raw materials, and also, from transportation, we were able to pass this on to our customers. What also helps is our transformation project or the, cost saving project. This is supporting to protect our P&L. Thomas, just presented you our Q1 figures were really excellent. Of course, there are risks, and, I think we were able to mitigate all, of, the risks which are operational. Raw material, prices, went up and also, some raw materials are just scarce. It's, hard to, get them. We reacted by multiple sourcing, and we managed it. There was no day of a production stop in any of, our plants right now. Energy development, I already mentioned this, at the chart at the very beginning.
We decided to hedge 85% of electricity and also 85% of our natural gas demand. This enables us to run through, because we have so many orders that we just want to produce, and this is what we did, the first three months. Last but not least, I want to mention again, and I think it's the last time that I mention it. It's the BMW i3, we had a very nice carbon fiber contract here, and this contract expires by end of June this year. The wind energy market is running so strong that it's pretty easy for us to push all the volumes, which went formerly into the i3 into the wind energy businesses.
There are, of course, risks which are shutdowns at customers, for example, at automotive customers, supply chain disruptions in China or an embargo of Russian gas, which has not materialized so far, and we have had about every month, which we perform as well as we did in the first three months. On the next slide, you can see that we confirm our guidance. We guide the capital markets to a top line level of slightly above EUR 1 billion, like prior year. EBITDA, which is our most important parameter, will be between EUR 110 million and EUR 130 million. It's worthwhile to mention that Q1 was a little bit above our expectation.
Coming to our summary, as I said in the first slide, there is hardly any impact so far from the war in Ukraine. Our top line is strong, and the results are very good. Our order situation and also the order backlog is on a very good level, driven especially by customers from LED industry and semiconductors. Of course, there's a little bit of headwind coming from raw materials, energy, and also transportation, but we found our way to mitigate these price increases. I told you that we hedged 85% of the energy. This enables us to run our capacities flat out. We were able to pass on those higher raw material and energy costs to a large extent to our customers, and this is the reason why our results are so excellent in Q1.
We also confirm our guidance. We are well prepared for everything which happened and what will happen. With this, I would like to hand over back to Claudia.
Yes. Thanks so much. Now we can start our Q&A session, and the moderator will give you some more instructions how to ask a question.
Ladies and gentlemen, at this time we will begin the question and answer session. Anyone who wishes to ask a question may press star followed by one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star followed by two. One moment for the first question, please. The first question is from Andreas Heine from Stifel. Please go ahead.
Yes. Thank you for the opportunity to ask question. Actually, I have a number of them. Most of them are very short. One is a little bit longer. I start with pensions. They were nicely reduced, the pension provision by EUR 20 million. However, if I look on the sensitivity provided in the annual report, I would have expected sharper decline. Maybe you can elaborate on this. I have more question I would like to ask them one by one, please.
Well, we've done everything that we could in order to reduce the pension, Mr. Heine. In fact, we've done a global approach on all the pension schemes that we had, and all voluntary pension schemes have been, so to speak, frozen. We've done that in Japan, we've done that in France, we've done that in U.K. and also in the United States. We sold certain parts of the pensions and we funded them also, especially in the United States, to a large extent. We introduced a kind of capital option also here for the German pensions so far.
We haven't said that the whole pension project is finished, so we are still on our way. This is some discussions and some changes there require a lot of preparation and a lot of interactions also with our works council and so on throughout the world. We have not done that, I would call it this way. We of course we've done our homework and a rising long-term interest rates also helped. We think there's more to come, Mr. Heine, and we're not done that with the pension.
I acknowledge that you did a lot. I was just referring to the discount rate. If I take the sensitivity annual report just with the discount rate, I'm not talking about any other activity, I would have assumed that pension provisions would have to come down by EUR 30 million-EUR 40 million just by the movement in the first quarter. I'm asking this because of obviously interest rates are on the rise also in the second quarter, and I was more hopeful that that has an IR impact. I just wanted to know whether there is anything in the technicality I missed.
No, we went down by EUR 18 million. In fact, this more or less reflects also the changes in the interest rate. You are right, also in the first quarter and also in the second quarter, it went up quite a bit. In April, we see again rising interest rates. If it continues, we will also see an effect in Q2. In fact, our figures, we did that to a large extent with our auditors. We don't see that there's anything wrong with the way it developed. We double-check just to make sure that everything's in line, also with our sensitivity analysis. Yeah.
Okay, thanks. Corporate costs, that was a great success indeed. I, according to your comments, that is now a sustainable level. In our models, we should look to, let's say, EUR 3 million instead of EUR 5-6 million per quarter.
Somewhere in between, then you're on the safe side.
Okay. That was the second one. Third one I've seen in the cash flow that there was a restructuring outflow of EUR 11.5 million. Is there more to come in this year? On this restructuring outflow, I mean.
No, there's even an outflow. No, that's to a large extent what we have there. This is because some further former employees left and finally the company, and this is why the restructuring costs were in this Q1. This is definitely the larger portion than the restructuring costs that are about to come in the upcoming quarters.
Graphite just for clarification. You talk about a strong order book. I would assume that book-to-bill is still above one for Graphite Solutions only.
Hi, Andreas. Yes, it is. Order entry was so strong that we went in sales control in March. That means there were more orders than we can handle by capacity. We waited with order confirmation a little bit and then decided and picked out the best one. Order entry is excellent, and this is true for all business units.
Well, that's a luxury problem, I guess. Now I come to the last, but this is a little bit longer. I really do not get my head around about the Carbon Fibers. If I adjust for the EUR 9 million, then you have achieved EUR 14 million underlying. I would assume the same level in the second quarter, which is the last one for the BMW contract. If I strip out the Brembo joint venture, which is ballpark EUR 4 million a quarter, that gives me EUR 10 million. What is what I should look then for the underlying business, which obviously drops with the BMW contract in the second half? What is what I have to have in mind excluding BMW, but including the wind energy.
If I look to your guidance and with what you said on the corporate cost and with Graphite is, if I take the upper end, the EUR 130, and look on the trends in the three segments and drill them down, what is then left for Carbon Fibers. Then if I take very seriously the upper end of the guidance, then there is, yeah, basically nothing left except the Brembo joint venture, what you bake in the second half for Carbon Fibers. Maybe you can help me to what I can look for, what in the second half, and then obviously what that means for the coming years.
Yeah, Andreas. In fact, I like your math because I also like the simple calculations. If you take one quarter and take it times four, or take it times two and then deduct just the potential impact of the BMW impact from the expiry of this contract. This is true. We know as many others. I mean, we are not the first one to report in this quarter, but we've listened carefully also what other companies, especially which are a little bit in our industry and high energy companies, what they report. If you take everything literally, then I can follow what you are saying.
I mean, in the end, we gave a range of our guidance, and this also expresses the kind of uncertainty that we still have. I mean, so far we're only three months into the new year. We are just about to finish April and we're talking about potential gas embargoes and how we can run. Shall we have the private households first just in case it comes to a scarcity of gas, or shall we run at least some kind of critical infrastructure and so on. So there's a lot of uncertainty in the market. So is it also, especially in the second half, also price-wise. Are we really able to pass through all the energy costs also to the wind energy and so to speak.
In Carbon Fibers, this is the business unit that changes. Has such a change in the way they produce as we've probably never seen before in this business unit, because this contract with BMW is quite substantial and also the profitability. We do have plans to pass it all through, but we first wanna see it until we are really convinced that this is sustainable and we can rely on that. There are huge efforts. I think the business unit has done a great job in acquiring the order book with the win. We need to materialize also the profitability that we expect with the prices and the costs that we are facing there.
The guidance that we gave, the range, I mean, you mentioned upper end. If I follow your math, then I can follow you, and I can see how you calculate. Again, there's another nine months to go for us and our guidance that we gave expresses all the uncertainty regarding all the effects that Torsten was mentioning, the manageable risk, but also the ones that are not in our hands. Just in case we gain a little bit more clarity, we are more than happy to limit the range of our guidance or to adjust it in case if needed.
Yeah, that's very fair. If I may add one comment. If I put it in other words, what you told me, then there is uncertainty, let's say, from this geopolitical and macro picture in niches as the segments, and if I drill everything down to corporate and to Carbon Fibers, then I'm too negative. Is that fair?
Yeah.
Thanks. These were indeed now all my questions. No, thank you.
Andreas, do you have your figure now?
I'm not allowed to share, as you know.
Okay. Very good. Thank you.
Thank you.
The next question is from Richard Schramm from HSBC. Please go ahead.
Yes, good afternoon, gentlemen. First point I would like to touch is the pricing, where you signaled that you are very successful in passing on the higher costs to customers so far. I'm just curious to hear, is there a kind of automatism that allows you to do this? What is the driver behind the successful development? Because you are standing out a bit with this, as most companies complain that they have at least a certain time lag to bridge in passing on the higher input costs they face.
Yeah. Thank you very much for this question. It is both. It is hard work, and it is automation. Especially in the automotive contracts, we have price escalation clauses. They are based on the main raw materials, and if the raw materials increase, we can increase the prices for the next months. I would say the majority of price increases is really hard work, especially in the carbon fiber and in the graphite segment. We went through the list of all our customers, and depending on profitability and strategic position of the customer, we decided for a brute force price increase or a softer approach.
I have to say compared to other businesses I was in, we are very successful in doing this. We approached the market and with a very good position, especially in Europe, where most of our customers are. It went much better than we expected at the beginning of the year. What helped is that we started this raw material cost pass-on already in the second half, beginning of the second half last year. That means all preparatory work was done, and now we are going to execute. This is why it runs well. What I can say, we are right now starting the third round of price increases. Yeah. The story has not ended. We are going to further increase prices.
Interesting. Thank you. I have a question on this energy hedging. You mentioned that 85% of your energy consumption for the current year is fixed, leaves the relatively limited amount of 15%. On the other side, obviously then this means that for the time beyond the current year, you're not hedged. When the new contracts for 2023 will be negotiated for end of this year, you have to take then what the market offers or what is your policy there? How long are you fixing prices usually?
Yeah. A pretty easy a certain share, which I'm not allowed to mention, is already hedged for the next year for pretty good conditions and for the remainder. We want to go a quite similar approach. Like this year, we want to hedge between 80% and 90% of our total energy consumption. The delta between what we have hedged so far and what we want to hedge, we are closing 10% of it every year. We look into the data, because, you know, we are running 29 production sites in various countries of the world. When we think it is a good opportunity, we close the deal either for electricity or for natural gas with the target to have end of the year 80%-90% hedged.
We run a budget approach. That means, guaranteed energy supply is more important for us than the cost itself, because we have to run our capacity flat. Our capacity utilization is a big driver, and as our order books are so full as they are, this will be also next year our strategy. I hope this helps you in how we are going forward.
If I understood correctly then, this means that 80%-90% of costs are fixed, then end of this year for next year already, so that you always have 12 months, let's say, on a kind of rolling basis, fixed.
Yes. This is our way, and at the end of the year, we can give you the exact number, how much we have hedged then.
Okay. Thank you. Last point I'd like to touch is the inventory. You had a significant increase here and of what was it? About EUR 25 million in inventory. Is this also including kind of safety buffer for the supplies, or is it just reflecting the volumes for customers you have on hand and the contracts you will work down in the next month or that we should expect better free cash flow development than for the second half of the year?
Yeah. I think you read our asset side very carefully, and you're completely right. Our inventory is indeed quite high. However, our working capital is still okay. We're happy with that, but we can breathe a little bit with our factoring on the liability side. You're completely right with everything that you said. All arguments are valid. On the one hand, there's a currency effect in there. On the other hand, there's a price effect in there, as Torsten also pointed out. At certain inventories, when you have an opportunity to buy it, you just have to take it in these days. This is exactly what we did.
This is also for the third reason, also in order to make sure that we grab every opportunity that we have purchasing-wise in the market and also to secure our ongoing production and supply to our customers. These are the three reasons for that. You know that we follow working capital management normally very tightly. This was exactly a part of our mission when Torsten and I started here together with the teams here. In these days, we are a little bit reluctant in being too strict in order to keep the inventory at the previous levels. Day-wise, by the way, we are not so bad.
In absolute terms, especially when it comes to quantity times price, we have to take what we get, and this is reflected in this, in this figure. You can be sure, we expect a better cash flow, in the upcoming quarters. That's for sure.
Thomas, maybe I would like to add one special raw material which goes into our carbon fiber chain, which is acrylonitrile. The following happened. The prices went up, and the result was that some acrylic fiber producers in Turkey went out of business, and there were already vessels on the way coming from Asia. We purchased on a spot basis at very attractive prices acrylonitrile, which we put in our storage tanks in Portugal, Lavradio, and they are quite significantly below the budget which we make. If there's a good opportunity to buy in times right now, cheap raw material, we do it. This might have increased our inventory level a little bit, but you will see later on good results coming from this opportunistic purchases.
Okay. Thank you very much. That's all I wanted to know. Thanks.
Thank you.
There are no further questions at this time. I hand back to Claudia Kellert.
I see no question here at the moment. If you want to ask questions, you have now the chance to follow the instructions of the moderator.
As a reminder, to ask a question, press star followed by one.
I think nobody wanna ask the questions anymore. Thanks so much for your participation. If you have further question arising reading our quarterly report, call the IR team or myself. Thanks so much. Have a nice afternoon. Bye-bye.
Ladies and gentlemen, the conference is now concluded, and you may disconnect your telephone. Thank you for joining, and have a good day.