Earnings Call: Q1 2022

May 3, 2021

Good morning, ladies and gentlemen, and welcome to the Mann's AG Conference Call regarding the Q1 2022 Results. At this time, all participants have been placed on a listen only mode. The floor will be open for questions following the presentation. Let me now turn the floor over to your hosts, Mr. Martin Drasch and Mr. Manfred Hoch Leitner. Thank you very much. Good morning and also a warm welcome from our side here in Ruutlingen for the presentation of our financial figures for the Q1 of 2022. As you will see, we do the reporting now in our new organizational structure with the divisions. First of all, like usual, We will have a look on the financial numbers, and afterwards, I will give you some insights and also an outlook regarding the development of the 2 divisions. First, I would like to hand over to Manfred Vogtleitner to give you an insight of our financial figures. Thanks, Martin. Also from my side, good morning to our today's conference call. Let's have first a look, as usual, on the income statement of the 1st 3 months 2022, we see that revenues are almost 20% higher than last year, where both segments contributed to the increase of revenues in the same amount. Including the capital at R and D works, mainly coming from our IPCI project, we achieved a total operating performance of €65,400,000 which is roughly €11,000,000 higher than at the end of March 2021. In the Q1 of the previous year, we had the positive onetime impact of the sales in our joint venture Talos included in the other operating Income without this impact of EUR 14,300,000, the other operating income would be on a similar level like this year, So roughly in an area of between €4,000,000 €5,000,000 On the material cost ratio, we see a strong Increase from 58% at the end of March 2021 to now 71%. The main reason for this Increase are, on one hand, orders under the make or buy approach with high material costs but low personnel expenses and on the other hand, A project in commissioning phase with an increase in material expenses. This can happen in project business as we are still in the ramp up phase of the mobility market. This is sometimes typical for first time projects. With our activities becoming then more and more mature and an increase of repeat orders, These impacts of these first time additional costs in projects should decrease in the future. In addition, new projects with higher margins, The personal expenses are roughly €1,100,000 higher than In the 1st 3 months of the previous year, the main driver for this increase is the increase of headcounts in Germany and Italy, mainly under our subsidy program, OIBADINO IPCI, which is at least partially compensated by the capitalized R and D expenses. The other operating expenses include an additional impairment of €1,200,000 In connection with the insolvency of a nice solar energy game, Baha'i and Schwabisch Hall, which is our former subsidiary, which has been sold to our Chinese partners a couple of years ago. Mainly due to the higher material costs, both The EBITDA and EBIT are negative with €6,000,000 and €6,400,000 respectively, excluding the already mentioned onetime impact of €14,300,000 in the previous year, this is roughly €3,000,000 below the results of the Q1 of the previous year. Having a look on the balance sheet. The balance sheet total is almost The same as at the end of 2021. Compared to the end of last year, we see on the asset side mainly an increase of trade receivables and contract assets, which lead to lower cash and cash equivalents and the residual amount of the increase of trade receivables and contract assets, which was not On the other side, we see higher trade payables Then at the end of 2021, also shown on the liabilities side. The equity ratio came down from 35.4% Now 32.5 percent due to the negative results of the Q1. The net debt increased significantly at the end of the Q1 as first down payment For new orders and progress payments for orders in process only came in after the 31st March, so during April and now in May, And could not be shown under our cash positions there. This leads now to the detailed view on the cash flow. As already mentioned, our cash decreased from point 1,000,000 to now €27,800,000 The cash flow from operating activities was minus €6,100,000 mainly due to the operational losses. But compared to the Q1 of the previous year, although still negative, this number improved significantly. With the progress of our big subsidy program, OIVATIN, we see our contribution in the cash flow from investing activities. In the previous year, the money which we received from the sale of Talos was shown under this position. Without this impact, the cash flow from investing activities in Q1 last year would have been almost on the same level as this year. As you have seen in the balance sheet, Already, we see an increase of current financial liabilities, which is shown here under the cash flow from financing activities. Consequently, as already mentioned, the cash at the end of 1st quarter amounted to €27,800,000 so roughly €6,000,000 lower Sorry, roughly €9,000,000 lower than at the beginning of the year. So far, my overview and explanation of the results of the first Groder, I'm handing now back to Martin for further details regarding our segments. Many thanks. Thank you, Madsrik. We are starting now with the Segment, Mobility and Battery Solutions. As you have seen in the presentation of Mansfield already, the EBIT is strongly influenced Higher than expected increase in the material cost mainly. And also, we had a project in the development where we had higher costs in the Commissioning then expected. We are here in discussion with the customer to have here further support from his side in this direction as also some of this cost. We are not only due to our wrong assumptions and also to changes in the project from the customer side. These discussions are Ongoing, but mainly the topic is influenced by higher personal costs we had due to the huge demand out of the market and Discussions and also evaluations with customers in the pre project phase, and we will see this later on In our presentation, what is the demand from the market, the battery segment is still really on the run, and we receive a lot of You are refused from customer with overall development of entire lines. And therefore, we had to increase with Specialists here, our team as well in Italy to really then also have the possibility to give the right answers to this future and potential customers. Overall, we see a huge and a good development in the order intake and also in the revenue side. As you can We have compared to Q1 in 2021, 36% higher revenues. And as you have also for Sure, recognize that we have some good order intakes now in the last weeks from a certain European company for the assembly of battery modules of Prismatic sales and also you have seen that we have received a follow-up order from Britishvolt regarding a scale up line in April for their fab in England. Overall, the strategy here also really needs Now like we expected it, so the companies which we are working in with a huge potential in development like Britishvolt, But also some of our already since long time partners of months, they have huge plans in development and our clear strategy With 3 to 5 of these potential companies, which increase in their demands in sales and also in the global strategy to increase their footprint really takes now part and is there. And we see for 2022 and also 2023 A good development in their plans and in the demands for support from one side. This beside, for sure, a critical situation In the overall supply chain market, which has some influence and also in the processing of the orders we have on hand, Yes, some lead times now really getting tremendously higher than expected. So we come in from some parts of days delivery time now to Munces and that for sure has some deviations in, but we are here in discussions with our customers. And As you know, for example, BMW is one of our customer. This helps to have some really high valued customers to have discussion Suppliers like Siemens and Beckhoff to have here really a better position in the race regarding components and get them earlier than maybe competitors. So this is The overall situation we see here, yes, for sure, some difficulties due to the overall and for everybody, the same Critical situation in the supply of parts and components, but the outlook and that's the positive thing of this critical situation That our customers also recognize the situation and they know they have now to faster make decisions to secure here the resources and And confidence they cannot take too long time to make decision and to place orders. So this is what we see actually that They are aware of this situation and the demand is still increasing also due to the change in the global energy consumption area. So the Energy transformation also in the transportation area and car industry is now really accelerated by the Actual situation of corona and as well the Ukrainian war. There is also sometimes some positive And that's what I mentioned here. The positive thing is that we see this acceleration in decision making process of our customers. In the segment Industry Server Solutions, we see also some good developments in the revenue. This is coming mainly out of our targeted FOP LP product we have now in the market, and we have some good Customers there with also some potential and plans to have higher capacities in this packaging Industry and also this technology also is now really on the race due to the topic of the semiconductor salt shortage Chip shortage in the market as this is an easier and cost competitive solution we have here on hand and we saw here a huge order increase. And Also last week was a fair in Thailand where we presented together with our partner, Beckhoff, and saw a huge increase of demand and Also plans from different customer sites in Europe as well in Asia for this technology. The EBIT is impacted by this topic of Industrial Automation Business regarding the impairment of €1,200,000 like Mansfred mentioned before, out of the insolvency of our former The other company in this direction, which is now recognized. But as said, also here, we see a huge development and increase in the demand. And as you have also seen with MBN Photonics, we also get now a very good order from this Area in this industry where we use our technology out of the solar business and use this in this organic solar sales production, which also has A huge demand in the future as energy as well here is really the key and with this technology Where you can use inside houses, solar cells and generate energy, for example, for remote access or for Cameras or whatever is in the house and you can charge the batteries with this technology is a huge advantage. And from our part, it fits Great to our technologies, batteries, recharging batteries, energy storage is our key, and we are really happy to have here Ampere Photonics as our New customer with also great plans for growth and further developments. As I mentioned, coming to our strategy, just to confirm once more, this is the strategic Focus we have, you saw in the few pillars we have in our strategy, one is the energy storage. We want to be here Europe's leading process integrator and want to be the technology leader here in the field of energy storage. We have Here, the necessary support also from the government in Europe with our RPCI project, where we have now already 60 to 70 EnPlu is working on the next generation and also on the USPs on processes for this energy storage and battery technology Developing here in the partner network with IPCI already now the future and developing the customers as well. As you have seen, there are More than 48 companies in the iPCI project, some of them are potential customers in the module assembly, but also in the Battery production and also with good impact out of the material and as well of the pack assembly industry, which we can Further increased in our business in future. Very important for us, therefore, it's the 2nd pillar, it's the digital transformation. We see this as a huge potential in the future to increase the competitiveness and the customer benefit to this data analysis To really find out where we have possibilities and processes to improve and to increase the yield and therefore also on the other hand then reduce the Scrap rate, this is clear advantage for the customer in regards on competitiveness and is our clear target is not only To serve the European market and to help our customers to become competitive as well worldwide. Therefore, such measurements and transformation of digital information into re usage in production process This is also one of our key developments and strategies for the future. Also, the inorganic growth It's clearly a topic we have not to develop everything our own. Therefore, we will further develop and Invest in technologies and also companies which have good developments in processes or technologies And machines which we can use and integrate into our lines. And for sure to be also here In the different regards, the 4th pillar of modular equipment design is also very important that we have then really the chance to fast adapt Our designs and not to use too many very rare design resources to be really fast in the market and have solutions which are fitting them Next, you see here our overview regarding the Expansion of plant production for lithium ion battery cells in Europe. We changed the a little bit to make it more visible and also more transparent from your side. As you can see, We have addressable market by month of 135 gigawatt hours. There is an addressable market, which we didn't approach Yes, because of the customer is not ready so far or it's even from a workload perspective actually not Possible. And there is also not addressable market from our side, for example, if there is already dedicated supplier Decision taken by the end customer and or from a technology perspective, there is technologies demanded, which We do not serve to have here also a clear focus and dedication. But you see out of this 1.2 gigawatt hours of Plant production capacity only in Europe. We serve already and address already a huge portion of the market in different countries. And the interesting thing is that most of our customers we have here, they have also plans to step over to the U. S. Or to the North American market, but also Rest of the World, India especially, is also coming into the focus, and there is also a huge demand Coming up for battery technologies and production technologies out of this direction. So still on the growth for these technologies, for sure, there's every day a change and different companies coming up With new demands, and we see this is now really accelerated, like mentioned before, due to the Actual change in energy, politics and the clear demand to be independent in the future and have to have more local production In Europe, this is driven and there is a huge investment taking place where Manns is well positioned with its partner network To be really here, one of the leaders in our clear strategy is to become number 1 for the integration of such battery production lines. Also reflected here on the growth industries we are serving, you see this in our example. In the car, you can see that we have different production solutions for various components in the electric powertrain, but also in the Automotive infrastructure, for example, projects for inverters, which is a huge Accelerating and also growing part of the car industry, mainly actually assembled manually. But due to the higher demands, There is also automation requested, which is a clear task for our Industrial Solutions department, but as well as cameras and assistance systems, lidar sensors, displays and for sure, the battery cell itself, the module and the pack As well as the battery management systems are here in our focus, and we see here also still big interest For the OEM sites to have already developments together with months for the next generations of the car industry for their models, which are coming in the future. For the inorganic growth, you can see that We also realized this strategy. And now step by step, we have investments in Cadiz. This is an engineering specialist For Inkjet Systems, they have the process know how. And they are, as I mentioned before, they are already Quite good technologies and printing heads available in the market. The topic actually is that to bring the speed of the printing head The product and especially in 2.5D and 3B shape, this is a topic which is not served in the market so far. There we Step in with our technologies out of different products and processes we already established And combine this with the technology and know how of Hardist and already received here the first orders out of the toy industry, Where such technology is demanded to be more flexible and more efficient, and we see also here in the Functional printing in the future, a huge development potential, especially in the Asian market, but as well European and American market is So it's showing more and more interest into this technology. We have also a minority interest in Cubic3D. This is printing With plastic components or plastic particles solutions on a quite good scale, This is to strengthen our competencies in the contract manufacturing area. We see there also huge potential to Integrate these systems into our R and D topics and also on customer sites for having A, B and C samples produced on a very Fastway and also integrated here the first products to some customers and producing them in our fab here in Reutlingen as well in Slovakia. Then we have on plan to have finalization of the custom sales tubing and joint venture where we want to build up the production capacities for handmade cells into an automated line. So first Those normally are made manually, but then it's needed to scale up and have B and C samples done and also maybe some Mass production, our shop here in Tubingen is well prepared with dry room and clean room installation and also The machine part which we will bring into this joint venture and to have them in the future here access for our customers to pre produce their cells on Made the lines and if they produce them, then already on Mann's machines, we see there is a huge advantage for us to further then also deliver the Mass production equipment and to support our customers in their process to develop cells. Coming to the outlook. 1st, regarding the order intake, like I mentioned before, We see a huge step forward in the order intake. Maybe you remember last year, We had some shifts in the beginning of the year. This year, it's the other way around. So we have already more than €40,000,000 of order intake in Mobility and Battery Solutions, and we still have if you remember that in Q4, we get the order from British On a very high amount, and we expect in the next weeks for the intakes due to the situation in the market And that we will get here very soon some further order intake. And as well in Industry Solutions, you see that we already Doubled, more than doubled the order intake in this area. Also, here demand is very strong. And overall, You see that we have increased in the Q1 of the order intake of more than 150%. Also, this clearly is then Reflected in the order backlog, and you can see that in Mobility and Battery Solutions, we have now more than €180,000,000 of Order backlog and nearly €90,000,000 in Industry Solutions. So overall, an order backlog of 273 €1,000,000 which is 60% higher than the last year. For sure, we would be or we targeted to have a higher Work and realization of POC in the Q1, which was impacted like described before on this shortage Materials and therefore delayed deliveries in some areas. But nevertheless, the order intake and the backlog is sufficient and good. And also, as you know, not all of these projects will be completely recognized and realized as POC in 2022. Some have longer lead times and process times, but with the potentials in order intake we see In the next months and quarters, we are really convinced that we can achieve our targets, which we have communicated a few weeks ago. Therefore, our guidance, we keep our guidance and see this as still Reliable and we work in this direction for sure. As said before, we have a lot of uncertainties coming up. But so far, The measurements we have placed and we are discussing with our customers, we are convinced that we can keep our guidance. So we will have a significant increase revenues in the mid double digit percentage range and the EBITDA margin in the mid to upper positive single percentage range and the EBIT in the lowtomidpositivesingledigitpercentage. So far from my side Regarding the outlook and the situation in the divisions, and now we are looking forward to receive your questions. Thank you. And there's one first question coming from Safa Ruzka from Pareto. Please go ahead. Your line is open. Yes, gentlemen. Hello, and thank you for taking my question. My first question is regarding the cost overruns in the Mobility And Battery Solutions segment, just to get a better feeling for the cost development here, can you give us a breakdown of the items which have led to a higher than expected cost, probably in absolute terms would helpful. And how do you think you can cope with that in the quarters to come? I mean, I guess, the material costs are likely to remain high. Do you have the possibility to adjust your pricing level to some extent even if the contracts are already signed? Yes, so let's come. Price breakdown or cost breakdown, we cannot share with you, but I can give you Rough numbers. Overall, it is like that that with the British old order, for example, We started later than expected. This was due to negotiations on the contract, which are very important for us We have here a clear picture and we see with the scale up line that this is really now also having some effect because now the follow-up orders can really be processed Much, much faster. So the recognition of the British World Order was not taking place like planned in the Q1. This is one part why we have not the necessary revenues to cover the fixed costs, but for sure, we worked on this project together with the customer, Mainly on the sales side, so the costs were here higher than we had in our original planning. The second topic is related to material costs, Which are actually higher than we had planned and also having contracts with the customers. In some of these I mean, these projects, we have price glide clauses or Price, correct corridors addressed with the customer, yes? And we are now starting with Then to show the deviations and having negotiations with them regarding change management and additional orders In that regard, in some areas, this is already done, especially in the project where we had higher costs in commissioning And we're forced to have some changes also, as I said, coming from the customer because of changes of the product. There, we already received some additional orders to cover this cost. So this will be recognized then in the next Quarters in the new projects, we have these discussions with the customer upfront, and we already Recognized here the price increases, inflation rates and further risks coming out of the market And achieved here already higher prices than compared to 2021. But as this is still very hard to predict, we have these Claus is in, and the customer is well aware of this. And we cooperate very closely with our customers to support us, especially on the Components side where the chip industry is with electric like TLCs and this topic that they support us to achieve their Prices as well. As you maybe know, some of these companies have contracts, frame contracts with these suppliers, and We can participate from these frame contracts in future, and that's the measures we have taken and can give you some rough Overview where this deviation is coming. So one is shift of revenues second, higher costs we had in development or in processing of projects, Which we already received some further order intakes. And the third is the higher material prices, which were for sure not reflected in Calculations in 2021. Okay, perfect. Very helpful. And regarding the material costs on group level, Around 70%. Will that remain at this level? Or can we expect some improvement so that you And probably around 60% at the end of the year? This is also impacted by the situation. You know that we have projects Together with our partners and for sure this project where we have no really own supply chain in, so we have Just some add ons on this one, and this is also, for example, on the BMW project with our partner, Yinghe, the case. So we have high revenues With high material ratios, and this mix will change in future as we have then more projects with a higher Part of material costs inside months and not just, let's say, by projects like they are actually, in this case, in Q1, Mainly driven by Yinghe project. So this is the mix. And overall, we expect and work for sure on improvement of the material cost ratio. Okay, understood. And then on the overall situation in the battery market and the order situation, I mean, you I touched this already to some extent in your presentation, but to get a clear view of you, There are some opinions in the market that the mobility boom in Europe could slow down due to the increased raw material prices And the potential for the competitiveness of the battery driven cars. Do you share this opinion? And did you have seen already Time from your customers in this direction are probably the postponements of the projects due to the higher prices in the market Or even some cancellations from projects? So we had no cancellation of projects, not even from RFQ side. This has Two reasons from my point of view. 1st of all, in the beginning, we have a very close look On our potential customers, if they already have orders on hand, that's, I think, one of the keys we have to And to really recognize if we start cooperation with potential customers. And this also, Like I explained before, we have the clear strategy to work with 3 to 5 really key and core Customers that have a growth strategy and for a growth strategy, it's necessary to have already orders on hand. That's our Clear decision making process and with our good connection we have in the automotive industry, we know already in advance Who will produce at the end of the day the sales as we are doing the developments with them? That's very helpful. And I think that's the reason Why we did not see so far any stops or also cancellation of projects as they have already orders On hand, that's one of the keys we see. The other topic is, yes, there are some Restrictions in the market, but still the demand is so high and the material price increase is as well valid for also the Asian suppliers For LG, for Samsung, for which we did or whomever, they have the same situation and the transportation cost, and that's the positive thing also increasing. So even maybe they can produce a little bit cheaper. Nevertheless, the supply chain is a disaster, and this will also not So for the future and to transport very heavy battery systems or modules from Asia or elsewhere to the production hubs Of energy storage or OEM customers makes less sense and is also a huge part of the cost they have And the other topic is then really the knowledge on how producing such cells and batteries. So And with our 3rd point, with our actual customers we are working with, they for sure have the topic of increased cost and have a high, high Pressure on reducing scrap rates and improving the yield rate, but there, it actually fits perfect to our strategy because we have Already developments really on hand and trying to find customers to really prove these developments In regards of data analysis, improving processes, higher automation rates to have their cost Decrease in their production lines, and we see more interest from our already Actual customers to have here further developments and doing here equipment and improvement in their lines to improve their Your cost structure. So that's how we see it. And if you have a look on the overall market, still It's huge. And for sure, there will be, like I mentioned before, some of the customers which will not make it. But I think we have here Really a very good selection method developed with this R and D and very good connections, like I mentioned, to the Growth Industries and then selecting the right partners together with Manns to develop this growth and being successful in there. Okay, perfect. Thank you very much. And I jump back to the line. Thank you. Thank you. And there is one question coming in from Reuter Schmidt, Metzler. Please go ahead. Yes. Good morning, gentlemen. I would like to have an update On the current negotiations with Jean Louis, when do you expect being able to reach an agreement? Hello, Mr. Schmidt. Yes. As you maybe know, there was Golden Week in China for 1st So they are coming back now. We further processed the negotiations and small Sales steps forward, but in the right direction so far, positive development of these negotiations, but unfortunately not yet Finalized, but it's going into, as I said, the right direction. And we have here good support from our shareholder SEC, Which is also quite interested in parts. I mean, I see it's also part of our customer shareholder structure. He knows that we have to find here quite a faster solution. And I cannot tell you So far, when this really will take place as these are government companies, which are here involved, is very complex and long Leading decision making processes, but as I said, I think we are here on the right way, and hopefully, we can close this topic Quite soon. And then a follow-up question here. In your press release, you mentioned there was a 1,200,000 Negative special effects from an impairment, and I was surprised not to see that in higher depreciation. Is it included in the material expenses? No, it's under the other operating expenses, the €1,200,000 And this is in connection, as we said, with the insolvency of our former subsidiary, which is now part of the NICE group in China. And in connection with this insolvency, we had to depreciate also these receivables or these assets which we had still on the balance sheet Due to the situation that under the insolvency of course, this company cannot provide any services anymore. Okay, understood. Understood. And then you also mentioned that you expect some fresh And strong order intake in the next couple of months. Could you give us an indication with regard to the amount? The amount is I would not like to tell too much, but I can give you maybe some Outlook in which direction our interests are going here. As you have seen with Britishvolt and others, we have a good Split in markets and also in end products, and we want to increase that. So we do not want to have an independency of one Core Industries, we are actually working here with a company out of the truck and transportation Business, which has a high interest to develop with months, a future technology and battery cell Also with the necessary chemistry, which fits especially to the truck industry. And we are seeing a good development with this potential customer, and we are expecting here a quite good And fast order intake in the yes, I think it will be somewhere between €50,000,000 €100,000,000 what we actually discuss with them depending then on their final decision making process. But At the end, there is also, like I explained before, the clear intention to have a mass production in the gigawatt scale. So we are talking here About laboratory and pilot lines, but for sure, the interest is to have your gigawatt lines in the future produced. The other area where we are in is coming out of the industry, as I said, we do not want to be Dependent of only automotive, truck or whatever it is at the end of the day and there is also a huge demand Coming out of the industry for standardized sales and equipment, so we have here a customer, which is interested to build In different countries and regions, a standardized production line for prismatic cells, so they produce They defined already the product and have land and such topics already addressed. And we are now looking forward to receive here The first order for the first line and the good thing is and this would then be really great for our future development as the Development costs for us will be very low. Our engineering resources just are needed then to have developments, but The line itself will be a standard line, and then it's really built to print line, which we can then supply with our network. And also here we expect in the next weeks an order intake. So this is a little bit the peak review What's going on? And also here we are talking about an order volume in for online It was around €20,000,000 each. Okay. Sounds good. Thank you. You're Welcome. And there is one follow-up question from Saver Ruska. Your line is open again. Yes, hello, again, hi. Two questions from my side. The first one, during your presentation, you mentioned that you have targeted higher POC In the Q1, without the delays, what is the amount you missed? Or what would be your revenue size without the delays in Q1? It would be roughly 15% higher Then what we have accounted? 50,000,000. 50. Or 15,000,000,000, okay. Okay. Good. And then the final one on the other operating income in Q1 in the amount of SEK 4,900,000, And it seems that's a pretty high level on a quarterly basis. Are there some unusual items? Or what The drivers here in the Q1, and I don't expect this to be the run rate for the next quarters. Yes. This depends, Mr. Wirtzka. So we have Also gained on exchange rates here. Maybe you remember that last year, we had losses of roughly EUR 3,000,000 Of exchange rate differences, now it's the other way around. So we had additional impact of roughly EUR 2,300,000 Coming out of gains from changes in currencies or exchange rates. So this is CHF 2,300,000 included under the CHF 4,900,000 There are no further questions. So back to you, Mr. Hochleitner, Mr. Trasch. Okay. If There are no further questions. Thanks a lot for the questions and the interest in MasS AG. I think We are here really on a growth path. And for sure, we do not I have expected this impact we have seen in Q1, but as mentioned with the already strong order intake In the measurements we have taken, we are convinced that our growth strategy is on the run, and we have taken the necessary measures to become again Profitable, this is our clear target, and we will see this in 2022. That's a clear target of the management team and the entire Group of months and we are still convinced that this development will Lead on in the next year due to that we have made the right decisions for markets and industry. So thanks for your Support so far and looking forward to meet you again latest in 3 months for our half year numbers. All the best to you and have a nice day. Thank you. Bye bye. Thank you. The conference is no longer being recorded.