Good day, and welcome to the Q4 twenty sixteen Stora Enzo Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Ula Payanan, Head of Investor Relations. Please go ahead, ma'am.
Thank you. Good afternoon, everyone, and welcome to this late Friday conference call about our Q4 twenty sixteen result. And just in order to save time, I will hand over to Paolo for his presentation. Please go ahead, Paolo.
Thank you, and very welcome to this call. And good morning or good afternoon depending on where you are in the world. So we I would like to start to go through the Q4 earnings and I would like to make sure a couple of things. So first of all, we came in on a sales which is basically 2% below the same period last year. However, we were growing in the areas where we want to grow by 4.5% and that is excluding structurally declining paper as well as divested entities.
Operating EBIT came in at $191,000,000 and there are very clear expectations why and that is hardwood pulp, Beihai and Innosvel. We managed to have a very strong cash flow in the fourth quarter and we came in on a return on capital employed of almost 9% and slightly above 12% if you exclude the Beihai. Net debt to operational EBITDA is down to two times versus 2.3 times a year ago. We have also launched today based on the uncertainty in the European area, in the global economy, a cost reduction program focusing at reducing our mainly our fixed cost with €50,000,000 This is also a way of making sure that we are nimble going into uncertain future. We have also today published that we or the Board proposed a €0.37 dividend per share, which is an increase of €04 or 12% versus last year.
This is actually a vote of confidence that we are leaving 2016 as a stronger company when it comes to product portfolio compared to when we entered 2016. I will come back to that later on. But then going into explaining what had happened in the quarter. If you look upon this simple table, it actually explains what has happened in the quarter, but also demonstrates the underlying earning potential in the company. You can see that Consumer Board is down by $15,000,000 But in reality, the business excluding Beihai and the ramp up of Beihai mill is actually $10,000,000 above and sales excluding Behar is more or less flat.
But we have improved the efficiency resulting in a $10,000,000 higher result than a year ago. Packaging Solutions coming in like $3,000,000 below and then we had the big profit fall in biomaterials. And that is explained by basically two components. We are having in Europe a hardwood price that is more than 20% lower than a year ago and a double digit also in China even though the prices there has not fallen as fast as they have done in Europe. But that is 35,000,000 in hardwood pulp prices.
On top of that, we have an unfortunate with the power generation and a turbine in Enocell costing SEK5 million. All of that has is basically capturing the development in biomaterials. Paper came in with a SEK23 million better results and then we have others coming in SEK11 million lower. And that is basically because of lower energy costs as well as lower wood prices. But with this slide, I think it's also important to remember that when we have additional costs as we have in the quarter because of Beihai, it's because we take them earlier and I will come to that later on.
This is a slide that I'm very, very happy about. We have actually managed to delever the company from about three times net debt to EBITDA to coming down to two times in forty eight months. That is a strong performance on how we manage cash and how we manage profitability going forward. I also want to repeat everybody that 2016 has been an extremely busy year for us. We started up one of the biggest investments that we ever done in May, that is Beihai.
We have started up the LVL production at Baikal's. We have inaugurated Murrow. We managed to get to an EBITDA breakeven at Warkaus. We have done a lot of additional small investments. And today, we also went out with an additional investment to increase quality, capabilities and capacity for $28,000,000 in Hainulah fluting mill to get us to the next level in the high quality fluting mill floating board area.
At the same time, we have divested, which is represented on the right hand side of this slide, about 915,000 tonnes either in closing down, selling off
or
stopped the fact or EUR $950,000,000. This represents a EUR $3.00 6,000,000 cash inflow. Coming to Beihai, and I think it's important here to that we are ramping it up and it's going very well and we are ahead of time. That's why we spend four million euros more than we previously thought. If you look at this slide here, on the right red little thing here, that represents for increased capacity 38,005 tons.
We managed to get basically 5,000 tons more in 2016. We're estimating that we can drive up even more this year, thirty thousand and three thousand five hundred tons in 2018. So that is actually going faster than we thought. We still are talking about an EBITDA breakeven in Q1 twenty eighteen. We started up as previously announced, the CTMP mill in the fourth quarter.
The other thing I would like to say about the fast learning curve of the people that we have trained over two years who's running the mill. When it comes to efficiency, this was the second highest efficiency within all the consumer mill board machines in the month of December. It's going really well. Before handing over to Sappo, I would like to come back to the slides that we are looking on every quarter. We have moved from a company of having 30% in non paper business to almost 70%.
We had a very strong quarter in paper, which means that now onethree of the profit. However, twothree of the profit is coming from business that was less than 40% in 02/2006. So the transformation continues. With that, I hand over to Seppo.
Thank you, Karl. And I start with the key figures and the reported sales that went down 2% versus Q4 a year ago. But like Ale said, sales were actually up 3.5% if you exclude paper and divestments. Full year sales figure was €9,800,000,000 Operational EBITDA margin was 12.7% for the quarter, slightly down compared to year ago, but the full year EBITDA was flat at 14% level. Operational EBIT €191,000,000 Operational return on capital employed excluding Beihai project was 12.1%, slightly below Q4 a year ago.
Full year twenty sixteen return on capital employed excluding Beihai was 13% reaching our strategic target level. And that is also up from 12.2% for 2015. And net debt to last twelve months of Russia EBITDA decreased during the year from 2.3 to two point zero. That is a demonstration of the strong cash flow that we are continuing to generate. Then moving forward to different divisions and I start with Consumer Board.
We're ramping up of Beihai mill continues and that is also reflected in the sales growth of 3.6%. Operational EBIT increased €10,000,000 excluding Beihai operations, thanks to improved efficiencies and lower wood prices. And that demonstrates the good underlying performance of the operations. PeiHai operational EBIT was €38,000,000 in Q4, and we expect that to be approximately €34,000,000 in Q1, so 4,000,000 less. And year on year, if you look at the expectations in Q1, expect that effect is about €30,000,000 negative in Q1 this year versus last year.
Operational return on capital 7.4%, but excluding Beihai mill it was 30.8%, so at an excellent level. An investment of €9,000,000 was announced during the quarter, where we are investing in microvibrated cellulose production at Imatra Inkore and Forest Meals. Then look at the Packaging Solutions, the ramp up of Warkaus kraftliner mill is at the final stage and sales increased 18%, reflecting Warkaus data, but also impact in China and higher volumes from containerboard mills and corrugated Russia. Operational EBIT was €3,000,000 lower, mainly due to lower recycled containerboard sales prices and higher recycled paper prices. And Warkau's kraftliner mill ramp up is proceeding and EBIT breakeven is expected in Q2 as said and communicated already earlier.
Also like a feasibility study that we announced last year is at the final stage at the moment and we will come back to that later. We also announced this morning a new investment at the Haynor Fluting Mill in Finland that is €28,000,000 and addressing and preparing for the increasing demand of high quality fluting globally. And that investment is expected to be completed in Q2 twenty eighteen. And return on capital is expected to be about 20%. That is our strategic target level for Packaging Solutions division as well.
Then Biomaterials, where the result and sales are impacted by historically low hardwood pulp prices. Effect was €35,000,000 like Karel said during the Q4 versus the year before. And also Enel Sao power generator problem affected the result by €5,000,000 during the quarter. And we are working on this fixing the problem, but unfortunately we expect repairs to take some time and the effect is about €10,000,000 negative during the first quarter. Then we are moving ahead with the startup at Pacas to silos demonstration plant in Raysland, USA, where first batches of silos are expected to be delivered this year.
And we also have signed now first commercial contract for silos. Wood Products, there we have also strategic investments ramping up and that is Warkaus LVL mill and Murrow sawmill, they also increasing sales. But operational EBIT decreased €4,000,000 mainly due to the increased cost and depreciation due to those strategic investments. LVL and Warkaus is moving ahead well and now we have 70% of product certificate and remaining are expected to be done during the quarter that has just started Q1 this year. Visibility study that we announced last year for the CLT at the Gruber mill will be finalized during the spring and more on that later.
Euros 12,000,000 investment was announced during the quarter to buy a composite granulates in Zulte Millspina that is new type of production and opportunity that we are looking forward to. And we expect to finalize that investment in next year in Q1 twenty eighteen. Then Paper, where strong performance continued in Q4, both result wise as well as strong cash flow generation that continued at record level. Also important to note is that sales remained flat excluding the divestments and that is a great achievement by the team and division taking into account the declining market. And operational EBIT increased 56% year on year.
And that is thanks to active cost management and lower depreciation and very much to strong operational performance during the whole year and also in Q4. Strong cash flow after investing activities to sales continued and was clearly above the target level for the second quarter in a row now and reached 11.8% level. Our strategic target is 7%. We also completed during the quarter divestment of Suzhou Mill site divestment and the internal review that we announced earlier continues on how to create the best conditions for the paper division to compete under increasing cost pressures and declining market. Then look at the strategic targets, where we stand there, both Q4 and full year.
First of all, look at the growth. We continue to grow and beat the market. So for the quarter it was 4.5% and full year 3.1%. Balance sheet continues to strengthen. If you look at the net debt to operational EBITDA as well as debt to equity ratios where we are below our strategic target levels.
And operational return on capital excluding Beihai was 13% for the full year reaching the target. Fixed costs remain at 25% level. We continue to work to reduce that. And as part of that, we also announcing a new €50,000,000 program that Karl mentioned earlier to address the costs also. Divisions, divisional targets where the targets are return on capital in packaging divisions, biomaterial wood products, paper cash flow related.
First of all, Consumer Board excluding Beja was 30.8% or 36.2% for full year, clearly about the 20% targeted level. Packaging Solutions was below 20%. There we can see the burden of the Warkaus startup and we expect that to move the right direction now that we are at the final stage at the Warkaus kraftliner mill. Biomaterials 6.1 for the quarter and 8.5 for the year. That is a reflection of the historically low hardwood pulp prices.
Wood Products 13.1% for the quarter, 16.8% for the year, slightly below the targeted 18 to 11 But I think we can still summarize and comment that they continue solid performance. And I believe that they will also improve going forward. And paper clearly about targeted cash flow after investing activities of 7% both for the quarter and full year. With that, I hand over back to you, Karl.
Thank you, Sefbou. So coming to the guidance for the 2017. Sales are estimated to be similar to the amount that we had in the 2016. Operating EBIT is expected to be in line with the €191,000,000 recorded in Q4 twenty sixteen. Operational EBIT estimates include negative impact of the ramp up of Beihai and the power generator failure at ENOCEL of EUR34 million and EUR10 million, respectively.
No major scheduled annual maintenance shutdowns in Q1 twenty seventeen. And as I said in the initial slide, Stora Enso will start a profit improvement program targeted to decrease the annual cost by €50,000,000 with a full annualized impact in 2018. Today, the Board has also gone out in Q3 in the report with a dividend proposal. And the policy is to strive to pay stable dividends linked to the long term performance, and that is one half of the net profile, the profit over a cycle. So the dividend proposal that will go to the AGM is €0.37 per share, totaling €292,000,000 It's a 12% increase versus the dividend of last year.
So as I said initially, we believe that we are well prepared for 2017 and beyond. 2016 has been a year of transformation. We have strengthened the balance sheet. We have proven once again that we have strong cash generation capabilities. We have a solid performance despite low hardwood pulp prices and the very high start up costs that are coming earlier than expected because we are ahead of the schedule.
The low hardwood pulp prices, we believe, has gone and we are on the stable level. The question is on how fast they will increase. And then we are moving away as demonstrated in the releases of this investment that has been popping up recently, like the MSC, the wood composite investment in Hilte as well as the Hydro announced today, we are moving more towards the innovation and sales transformation. Thank you very much for that. With that, I would like to open up for Q and A.
Thank you. And we will take our first question from Antti Koskivori from Danske Bank. Please go ahead.
Yes, thank you. I have few questions and the first one is on the Beihai ramp up cost. Sorry, missed that part. So you are taking now extra cost on Q4, 5,000,000 or so. Is that also included in your guidance for Q1 of the €34,000,000 Could you explain that a bit?
That would be the first question. Yes.
So when you ramp up the mill and when you increase the capacity and when you're training the staff, there is a budget to ramp this up, which is 100,000,000 And the faster you do it, the earlier you will get the costs. Do you understand? Yes. Which means that for the total budget, we have constantly taken cost earlier. It's not that they are becoming more costs.
It's just that they're coming earlier because we are ahead of the ramp up, which is demonstrated in my slide.
All right. The other question or the follow-up question would be that how if you're taking cost earlier now, will that impact to your your kind of expected level where you'll be going to be in every quarter in 2017? Or is it just the few quarters that we are seeing here?
Right now, we have taken some extra costs. This quarter, we came in by $4,000,000 That is basically moving $4,000,000 from that. Will it change the EBITDA breakeven? No. But it will constantly do this in the coming quarters during 2017.
Absolutely.
Okay. Very well. The second question on the sales price on Consumer Board division. If I just do the math, seems that your average sales price is down €50 per ton since Q1 twenty sixteen. I was just wondering whether this is purely a high impact or whether there is something more behind that decline?
I think you cannot calculate that, because you need to understand that we are seasonally low always in Q4. The other one is the mix. So if you remember my slide from the Capital Markets Day, 60% of what we sell is liquid or CKB or food service board, the very stable prices And then a multiyear contract. 30% are FBB. And there we have the majority with fairly stable prices, because cigarette is very stable.
You have luxury like Camp Rides, Performa Brilliance and those which are focused on very specific segments. And then you have a 10%, which is SBS plus specialties. So it's more than mix that moves around.
Okay. So basically excluding Beihai, the pricing picture has been stable? Absolutely.
All right. You Thank cannot use statistics on FBB on us. We don't it's a very little commodity FBB. Yes. All right.
Thank you very much. Thank you.
Our next question is from Justin Jordan from Jefferies. Please go ahead. Your line is open.
Thank you and good afternoon everyone. I've just got a few quick questions on Packaging Paper. I appreciate obviously, Vaca Muerta had a maintenance shut in Q4, but just for 2016 overall, just give us some color. Can you tell us what the total tonnage produced was in calendar twenty sixteen?
What was the grade?
Sorry, I was talking about the ramp up of the Varcross kraftliner mill.
Okay. So that is kraftliner.
Yes. So obviously, you're successfully ramping it up. And I'm just trying to get some sense of in calendar 2016 overall, was the total tonnage produced from the mill?
So we've produced 270,000 tonnes in 2016 and always 73,000 tonnes, including maintenance in Q4.
Fantastic. Thank you. And just obviously, you're citing lower testliner prices and higher OCC prices within the packaging paper result in Q4. It's not unusual for anyone who's familiar with the sector, sadly. But what's your view on the price increases that are currently being announced by peers for Testliner and Carthliner for Spring twenty seventeen?
So
you're absolutely right. Testliner declined during the 2016, absolutely right. And kraftliner there has been a decline in the first, but have been stable for the rest of the year on a low level. However, if we look in for kraftliner, we believe that the prices will go up in the 2017. However, we have not calculated any effect on kraftliner because of what happened in Pensacola.
We don't know that. That's 500,000 tonnes gone out to the market, and we don't know when it's coming back.
Okay. And just with regard to the Australenca study that you're doing, potentially expanding that mill. Can you give us timeline to when you might be in a position to take a decision and communicate that with us?
It's going to be in Q1. It's a bit delayed.
Okay. All right. Just very quickly then, just on biomaterials, obviously prices have been falling in Q4. But in recent weeks, prices seem to be relatively stable and if anything, potentially going up in 2017. I don't know if you have a view on pulp prices in Q1 twenty seventeen?
Yes, we do have a lot of views on that. I think so first of all, have to understand, when you raise prices, it takes about a quarter to get them through the system, right? So if I take hardwood pulp Europe, we believe it's stable year on year and we believe slightly higher. The question here is what is likely and how fast can it go. The other one is that you have to remember that in hardwood in China, is a slightly stronger demand and it's higher.
However, we only sell like 30% -ish in China. Most of it is going into Europe. And the other thing that you have to keep in mind when you think about hardwood pulp is that by selling off some of the entities like Cobell and other mills Arapate, we are getting longer in hardwood pulp and in pulp in total. So in Q3, we said that we were basically 1,900,000 tons long on an annual basis. We've now gone up to 2,100,000 because we have divested and closed down including Suture.
You understand?
Yes. Yes. Okay. Just one final question. Just the new CHF 50,000,000 cost saving target you've announced, is that in addition to what you might do within the Paper division review?
Or does that encompass potential This is a
CHF 50,000,000 across all divisions, all star functions because the macro right now and you see it in the currency movements, you see it we have elections in France, you have no government in Italy, you are having a Brexit thing happening, you have a potential trade conflict between U. S. And China. So we are just being cautious. So this is irrespective of that.
So just so it includes potential capacity closures? No. No, no. Okay. That would be potentially in addition to that?
If these things would happen.
Quite. Yes, indeed. Thank you.
And we will take our next question from Harry Ketoneen from Nordea. Please go ahead. Your line is open.
Good afternoon.
Can you say something about the sort of overall cost inflation because some of your peers have sort of indicated the end of the sort of deflationary era. But what are you seeing in the main cost items on a sort of like for like basis?
Yes, it's Zeppe here. Hi, Harvik. In general, I would say that cost pressures are not high. So it's rather flat going forward as far as we can see at the moment. It needs to be largely stable with different input costs in 2017.
But in sort of all over, it comes out flat.
Yes. Okay, okay. Great. Another one, real quick. I mean, you referred to the talked about the pulp price.
But I understand what you mean. And that is also a reason why we are doing the 50,000,000.
Yes, yes, yes. On the pulp, as you sort of raised that impact on a sort of year on year basis, but did you see sort of a sequential change or impact in the same way? Because we all know that sort of short fiber prices came down already quite early last year sort of during the spring. So that's why I'm asking whether you had a sort of a sequential negative in your books in Q4 still from pulp?
No, they have been low. It's not gone down really, but they have not come up, especially not in Europe. And I think expectation was that it's going to go fast, but it seems to be harder. And hence, I'm a little bit I think they're going to go up both in China as well as in Europe. But I'm not sure how fast it's going to be.
I'm a bit cautious about that.
Okay, okay. And maybe sort of final, Antti already asked about this about Beihai, but it is really in a kind of a broad terms or sort of simple terms, I'll ask if you have the target of still going towards the EBITDA breakeven in Q1 twenty eighteen. But how sort of stable or steady trend do you see FRANCOIS towards the breakeven point? Or is there some sort of step kind of change? Or is there something you
know that sort quarter is different? Have
changed in the first quarter that we need. I will not go into them because I'd rather tell them when we pass them. But right now, I feel good. I feel very proud of the team in China.
Yes.
Related to that, there's been some concern about price increases announced by the local players, hasn't there? So have you seen sort of any kind of tightening in the market sort of which would be improving your possibilities to get the product out to the customers?
So the Bayside Mail is focusing on three grades, which is the end game, CTV, liquid and foodservice board. We are launching like a simple noodle cup already and we are working on it. But I feel that the market in China for various reasons is probably going to appreciate this and now it's a sign that high quality you can charge more for. So I've seen those movements and I'm happy with them. But we are not really, so to say, in the area where we should be.
We are still moving from basically trials to standard folding boxboard when we are training up to people and then qualifying the liquid customers and CKD and the more advanced full service boards.
All right. Got you. Many thanks.
Thank you.
And our next question is from Robin Santavouk, Siotr from Carnegie. Please go ahead. Your line is open.
Thank you very much. A couple of questions from me. First of all, could you comment what's the production run rate at Beihai now when we start the year? And what's the delivery run rate?
So run rate, I can give you because we made 140,000 tonnes last year and we delivered about 110,000, 111,000. But obviously, if you take that and draw a line from basically nothing in Q2. In Q2, it's basically happening most of this run rate is coming in late Q3 and during Q4.
Right. But it must then be so that because the new sort of run rates are quite high. So that the grades you sell now, so that the pricing is much, much lower than what you sort of aim at later on because the REBIT run is CHF160 million negative a year.
Yes, but that's also the ramp up, the repump and all that. So I think when we get into the 2017, this will be more interesting to talk about, because it is it has been mostly second grade FTD. And also you have
to remember that in the production with the ramp up phase, have short production runs when you are doing production for qualifications. And that means that the efficiencies etcetera are not necessarily always the best. But it
wasn't December was a special month.
Understand. And probably some other extra costs related to the ramp up. Then regarding the €50,000,000 cost cutting program, do you can you share any other details sort of what division, what measures and some time lines regarding
It's everybody. It's focused on fixed costs and staff functions.
Thanks. And then related to CapEx, now what is included? Could you sort of could you divide that figure you guide for 2017 into smaller pieces of the maintenance and growth investments potentially Orstoleka or just so we understand what is included in that?
It's basically what you had in Capital Markets Day.
The maintenance CapEx typically is like we have said about EUR200 million plus minus. And for instance, all the new CapEx projects that we have announced, including Hainova Flutingville investment this morning, it's all included in the guidance. As you remember from the Capital Markets Day, we still had some unallocated included in the €600 €650,000,000 So it's totally aligned with our previous communication.
Good. Thank you very much.
We will take our next question from Kevin Hoegard from Goldman Sachs. Please go ahead.
Good afternoon. I was just wondering if you could maybe add some can you give us a feel for how big the step down in CapEx or in maintenance shutdowns is 4Q 1Q twenty seventeen versus 4Q twenty sixteen?
Yes, it's Jeffrey. Maybe I can take that. If you look at the maintenance effect in Q1 twenty seventeen versus Q4, it's EUR38 million less. Okay. But then you have to remember that year on year it's flat.
Yes, yes, no, that's fine. It's just to get a feel for the
the quarter on quarter effect.
In the maintenance cycle.
Okay. Yes, no, thank you very much.
And we will take our next question from Linus Larsson from SEB. Please go ahead.
Yes. Thank you very much and good afternoon to everyone. If I may continue on the previous question and your assumptions for your first quarter guidance, given the big tailwind that you have on maintenance costs, which are the big negative factors that you're assuming Q1 on Q4, please?
JOSE So first of all, you have a seasonally volume wise weaker paper. And then you can see in the volumes year over year. Then we have the basically the other negative, which is the Irocell, which is five. And then you have Beihai minus I think it's 13.
Year on year. Year on year.
Yes, but sequentially, I mean sequentially.
Sequentially down then, we've got four four better. And then you're coming back, what is happening with pulp prices? I think it's going to take longer before the European where we sell most of our things is going to pick up.
But if you look at normal seasonality and previous years, typically Q4 and Q1 are flat. It's such that we are at the lower level now mainly due to the lower pulp
to And the question is when will it pick up?
But your planning assumption for pulp pricing is flat, it sounds like, if you look sequentially Q1 on Q4 then? Yes. So something needs and then presumably, I mean, Consumer Board has a stronger seasonality. I would expect better volumes in Consumer Board in the first quarter compared to the fourth quarter?
Yes. And then you have the additional shutdown of Vallecast because of changing the equipment that we announced at the Capital Markets Day that we couldn't fit in because of the lead times into the maintenance that we had in Q4 for Rykeros.
Okay. And that is not part of the CapEx guidance that you've given, the 38? Is it inside the 38?
Yes.
Okay. Okay. Okay. Okay. Okay.
It looks like a pretty cautious guidance statement. But are you expecting what do you expect for currency? For instance, do you have any delta on currency Q1 and Q4?
Just looking at in total picture in Q4 year on year, the positive from currencies was about CHF 20,000,000. Euros And if you look at the full year 2017, we expect some €60,000,000 better sort of improvement coming from the currencies, so the positive on the result. So there is some in Q1, nothing significant in the quarter.
But if you look what have happened in the recent days, it's quite volatile.
And are you planning for lower paper prices Q1 and Q4?
So we believe we are in negotiations, which means that we expect them to be stable. Okay.
All right.
And I think it's also we are basically not existing in the coated mechanical grades after what had happened with our asset base.
Right, right. Okay. May I just on Vaca, just finally, if I may. The how much potential is still left in Veracas? What was the contribution in the fourth quarter?
And what how much better can it get gradually during 2017, do you think?
So we have said the following. We were EBITDA breakeven in Q3. We had a maintenance in Q4. We are changing some equipment, and we are expecting to be EBIT breakeven in Q2. And then you will get the towards what we announced previously of the end result of IQOS.
Okay. But there's still quite a bit of potential there?
Yes.
That's great. Thank you very much.
And we will take our next question from Ross Creek from JPMorgan. Please go ahead.
Hi, good afternoon, everyone. Thanks very much. Just looking at Varkas kraftliner, would you be able to give a rough estimate of the split between sales going to the European market versus export out of the European market? And then just given your expectations around where cross liner prices in Europe are going, would you expect to see or to move some of that product that you're currently exporting back into Europe in 2017?
We don't disclose. But what we think is the demand will be stable and we see slightly higher prices for kraftliner. The only thing as I said to previous was that we don't really know the impact of the Pensacola 500,000 tonne mill.
Okay. All right. Thanks.
There are no questions at this time.
Okay. So then we will close the phone here. And thank you, everybody, for listening in. And Karl, do you want to say some color?
I would like to thank you all. We feel that we are well prepared for 2017 and beyond. And even though it's a rough macro, I think we are a lot better prepared for 2017 than we were for 2016. Thank you very much. Appreciate This you spending your time with
concludes today's conference call. Thank you for your participation. Ladies and gentlemen, you may now disconnect.