Earnings Call: H2 2018

Mar 7, 2019

Ladies and gentlemen, good morning. Thank you for attending TTi Group Company under the joint announcement for the year 2018. I'm happy to report that TTI delivered another year of record revenue. Profit gross margin, we had solid revenue during the power equipment. And of course, very good news, our FLORCAD has turned around, and we have improvement, substantial improvement in margin and in revenue. And I think our momentum will continue. And I don't want to go in details in gross margins and improvements and so on. That will be explained by Frank, our CFO, and Joe. And what Jules said this morning on TV, we are not there yet. The best is yet to come. I will explain a little bit more once we are finished with our presentation. Once again, thank you very much for coming, and you will enjoy the presentation. We have really exciting or good news. And Stefan, we did one thing right. We hired the best management there is on this planet, which TDI did, not cheap, but I think we have good results. That's for the issue. Last year, our name is the Chairman. Yes, that's correct. Frank, you're an exception. So you're on that page. Do I get a raise or one? We consider that, Fai. Thank you. And thank you, Leo. So many wonderful faces here from before and I am really, really excited and happy you all can come. It is an honor for me and for the whole management and the Board and a lot of Board members here. They are all attending. They like the presentation that Jody had yesterday. They like to hear it once more coming to write? You all couldn't sleep. You got so excited. And shall we start? Frank, will you start the presentation? Yes, sir. Thank you. Okay. Thank you, Mr. Chairman. Last year, 2018, we delivered an organic sales increase of US957 million dollars It's all organic, a 15.8 percent growth to a total revenue of $7,000,000,000 the 9th consecutive year of record revenue. This record sales was mainly driven by our ongoing strategic commitments and dedicated focus in the development of innovative cordless products together with strong category, channels and geographic expansion. Milwaukee continued to lead the sales growth momentum, delivering an over 28% increase globally, followed by the stellar performance of Viobe 1 plus collar systems. 4 ks and appliances, as Chairman pointed out, also contributed to the revenue growth with well received cordless vacuums and carpet washing products, the new products are at the back. So gross profit increased by US388 $1,000,000 to US2.6 billion dollars with margin further expanded by 50 basis points to 37.2 percent, the 10th consecutive year of gross margin improvements. The increase was mainly driven by our very consistent and focused strategy of introduction of new innovative products, category expansion, mix improvements, productivity gains and very effective supply chain management, offsetting any commodity inflation. You might have heard us describing this proven strategy over the past years, and for sure, you can expect us to continue to execute this strategy going forward. We therefore are very confident that our gross profit margin and gross profit will continue to improve. EBIT increased by 17% to $607,000,000 with margin increased from 8.6% to 8.7%. Consistent with our proven strategy, we will continue to further invest in strategic SG and A to maintain the sales growth momentum and further margin expansion, while leveraging non strategic SG and A spend on our sales growth. Net profit increased by 17.4 percent to US552 $1,000,000 with margin increased by 10 basis points to 7.9%. Earnings per share increased by 17.5 percent to $0.30.16 per share. The Board recommended a final dividend of HK0.50 dollars per share, representing an increase of 26% over last year's final dividend. Together with the HK0.38 interim dividend paid, subject to the shareholders' approval to the final dividend, Total dividend for the year will be HKD0.88, an increase of 30.4% over 2017 with a payout ratio of 37.5% as compared to 35.2% in 2017, the 7th consecutive year of payout ratio increase. It has always been a target that EBIT and net profit improvements must outperform sales growth. We've managed to deliver that with an 8 years CAGR of 10% sales growth, while our EBIT delivered a CAGR of 16% increase over the same 8 years period from 2011. Power Equipment division accounted for 85.6% of the group's soil revenue, delivered a 17% sales growth over 2017. As mentioned at the beginning, the growth was mainly driven by the outstanding performance of Milwaukee globally, delivering an increase of 28.2 percent and a 5 year CAGR of 23%. We'll be rampers' collar systems also outperformed the industrial growth average and delivered a double digit growth. EBIT margin of this division remained comparable to that of 2017 at 10% as we continue to invest in strategic SG and A to capture further revenue growth momentum and margin enhancing opportunities, together with the introduction of margin accretive new products. We are confident that this division will further improve in both sales and margins going forward. Floorcare and Appliances division, accounting for 14.4 percent of the group's revenue, was an increase of 9.3% over 2017, and margin further improved by 10 basis points. The improvement is mainly from the double digit growth of cordless products and carpet washes, both our target strategic growth drivers going forward. With the introduction of the new cordless systems, which Joe will talk about a little bit more later, we believe this significant portfolio transition to collars, together with our focus in carpet washes, this division will continue to deliver sales growth and margin improvements. From a geographic perspective, all our regions delivered double digit growth. North America remained to be our major market, but accounting for 76.3 percent of the growth revenue, followed by Europe, 15.2 percent and rest of the world, 8.8 percent, consistent mainly of Australia, New Zealand and South Korea. As mentioned, we continue to invest in SG and A to grow the business and profitability. In 2018, SG and A was 28.7 percent of sales as compared to 28.2% in 2017. We increased our spend in introducing and promoting new products launched and to be launched and further step up our R and D spend by 20 basis points to 2.9% of revenue as compared to 2.7% last year in 2017. We consider these investments play a very important role to the future growth of our business. We have, however, managed to lever down our non strategic SG and A expense with administrative expenses increased by 13.5% on revenue growth of 15.8%. Despite higher interest environment in 2018, we've managed to capitalize on our strong cash flow and balance sheet together with very diligent financial execution. We delivered a very efficient and effective finance cost. Our net finance cost was 6.2% lower than that of 2017 on a 15.8% increase in revenue. Net finance cost now only represent 0.18% of our total sales only. Effective tax rate remained comparable to that of 2017 at 7.1%. Through various effective and prudent tax plan leveraging on our global sales operations, we remain confident this high single digit effective tax rate is very sustainable going forward. Our balance sheet further strengthened and in a very healthy position. Shareholders' equity was at 3,060,000,000 dollars an increase of 11.5 percent or $370,000,000 as compared to 2017. As of December 31, 2018, we continued to be in a net cash position. With the operating cash flow and capital expenditure projected in 2019, we remain confident that this net cash position is very sustainable. Working capital has always been our major focus, and working capital as a percentage to sales was at 13.3% as compared to 16.5% in 2017. We have explained it in previous various presentations that we strategically maintained a slightly higher level of inventory to support our tremendous growth momentum. So even though inventory was at 92 days, 4 days higher than that of 2017, we are very comfortable with the envisage any issues carrying this slightly higher level. More important is that this additional inventory day is basically being financed by the 5 payable days increase, which our global procurement team managed to deliver, capitalizing on the volume and order visibility. Receivable days was at 57 days. We projected that the receivable days will be maintained at around high-fifty to low-sixty days level. With the quality of our customers, we have no concerns for the credits that we offered. CapEx was at $259,000,000 as we continue to invest in capacity expansion, R and D, in particular, and operation efficiencies. We maintained a higher cash level and at the same time slightly higher debt mainly due to the execution of our very prudent risk free financial plans and structure to maximize our finance cost efficiencies. Currently, 56% of our debts are long term and 89% are floating rate. We will constantly be reviewing our debt portfolio and structure to maximize our operational and balance sheet strength to further improvements and for the continuous growth ahead of us. With that said, I would like to pass the floor to Joe. Thank you, Frank. Okay. I would like to try and help you understand 2 misperceptions that are restricting the stock price of this company. First of all, you notice we grew 15.8%. That is dramatically better than the market. And the misperceptions are that, number 1, people think that we're a housing stock. Every time the housing cycle changes, people would think it's going to affect our company. And I'm going to show you today once again, we are not a housing stock. Now that issue is propagated by our competitors who when they have bad results, they blame housing or they'll blame some other issue. And the second point is people tend to link our prospects with our competitors. But you see, we are taking share from our competitors. So of course, their results are bad. Of course, they're going to blame housing because we're killing them in the marketplace. So please stare at that 15.8%. That is well above market. We used to be classified horse as an industrial company. We are now a technology company that happens to make labor saving devices called floor care in lawnmowers and power tools. And anyhow, hopefully today's results in our strategy will clear this up a bit. So yes, we were up 17 Frank in the flagship power equipment business and Floor Care is finally showing the benefit of a painstakingly thought through turnaround plan, which I'll show you some details today. We had an outstanding gross margin performance last year, 50 basis point improvement in gross margin. And I'm equally proud that we were disciplined enough to invest in strategic frank SG and A. We added 20 bps of investment in R and D last year, which is which you're going to see the benefit of in the next 5 years and you're not going to believe the product flow and the new business flow that we will show you in this company. The organic growth we can achieve in the next 5 years is going to be very, very exciting and very good for investors. And of course, profit was up 17.4% on 15.8% sales growth, so we got leverage. But make no mistake, we are investing and it's conscientious investment in SG and A. We're investing in new product development and we're investing we're building out a geographic expansion program attacking new countries that we've never been in before, that will allow us to harvest the benefit of all these new products in even more marketing companies throughout the world. So this chart is a thing of beauty. We should frame it Frank and put it on the wall in the office, take the arc down, 10 years in a row. And what's the most important about this chart is that we're not finished yet. Our guidance is that we will continue to improve our gross margin as a percentage of sales, roughly 50 bps a year over the next 3 years. That's pretty strong guidance. And yes, we face the same commodity inflation worst as our competitors, but no, we don't use commodities as an excuse. We find ways working with our distribution partners, working with Home Depot. We find ways to become more efficient as a supplier so that we can offset the issue of commodity inflation and still deliver gross margin improvement. I'm extremely proud of what our team achieved, Frank, in working capital. Can you imagine growing 15.8% and having working capital still produce $65,000,000 of cash flow? Where have you ever seen a company growing as fast as we are that's so efficient in working capital management that working capital becomes a source of cash? Now our customers Home Depot is our largest customer, and we have other really key customers around the world. And they expect us to deliver product when they need it. And that's why we put, Frank, more inventory in this year as a conscientious decision to be ready for improved sales, which and it worked out great. But we funded all that inventory investment by being relentlessly disciplined in receivables and doing a better job managing our suppliers with payables. Why did our receivables go down 10 days a year, which is extraordinary? It's because we don't take chances. We don't sell customers in high risk countries when there's a risk that they may not pay their bills. Sometimes we don't get credit for the things that we don't do at TTi. We didn't rush into Turkey or Argentina. Our competitors are saying that their receivables are issues because they went into these high risk countries. We are very, very thoughtful with our geographic expansion programs. And we don't take bad debt risk, Frank. And because of that, working capital was actually a source of cash at a time when we grew 15.8%. Our the basic productivity measure of any company is sales outgrow headcount. And once again, Frank, sales outgrow headcount. And this trend, we believe, will continue as well. One of the things that is a real differentiator for the company, and this has become an unassailable competitive advantage for TTi, We've been investing in campus recruiting and hiring in our leadership development program, in hiring blue chip high potential college graduates from over 75 campuses around the world. And this investment has been going on year after year. In fact, in 2019, we're going to hire over 780 college graduates. These are handpicked superstars off campuses that will populate our sales and marketing and engineering and logistics and finance organizations throughout the company. And this pool of talent will give us the ability to continue to grow because we'll have people that can manage the ever growing enterprise we're creating here at TTi. The campus recruiting program is special because most companies struggle with this because the payback here is not instant. It takes 3 or 4 years for a college grad to actually produce a good return on investment. And the first thing new CEOs do is they come into companies and they whack the campus recruiting because it's easy to cut. You don't feel the pain for about 3 or 4 years. But anyhow, we are very committed to this program. We now have over 12 vice president level executives in the company that started as a college graduate in our LDP program and that number is going to go up a lot over the next 5 years. So let's look at some of the new product launches today and then I'm anxious to get to Q and A to help clear up some of the misperceptions about the company. First of all, as we have promised, we now have a plan in FLOOR Care to win. Our FLOOR Care business has struggled. The competitive set in FLOOR Care is formidable. We respect the competitors here a lot and we have just launched something that is a true breakthrough, we call 1 Power. This finally, we have a cordless floor care system that's led by the core product, the ProVac, which is now the most popular type of upright vacuum cleaner in the world. And this system has an interchangeable battery. So the same battery that powers the Polvac will also now power a series of other products, whether they're blowers or wetdryvacs, torch, spot removers, etcetera. And by coming up with a detachable battery system, we create tremendous value proposition for the user because if you buy your vacuum cleaner now with a charger and 2 batteries and then you can buy these other products without the battery and charger. So you pay literally half price for these fantastic products. The same battery used in all the different products. And remember, we're the global leader in cordless technology, lithium technology. So the efficiencies, Frank, we have in purchasing and manufacturing and power tools, of course, cascades into our floor care system now. And I can tell you the momentum that we have with our retail partners in this one power launch is really, really exciting. So yes, FLORCARE will improve. It won't happen overnight, but over the next 3 years, you'll see FLORCARE become a contributor to the company's step on improvements in EBIT as opposed to an excuse. We also have been tremendously successful with our new generation carpet washing, our PowerDash, which is a lightweight product in the smart wash system. These products have taken off like wildfire and gives us true optimism as we look forward in our Flour Care business. So Fler Care is not perfect yet, but we now have a way to win and we're excited about it and you will see the results here over the next 3 years. Okay. Let's shift gears to power tools. Frank mentioned our global leadership position in Ryobi 1 plus Ryobi 1 plus is unique. This is the world's largest cordless DIY system and we have the only overarching platform in batteries that goes from power tools to outdoor. So the same batteries can work whether you're working in the yard or around the house. We have the broadest line of high performance DIY cordless products in the world. We're about to roll out another 15 1 plus products in our power tool division alone. And let me show you an ad we're going to run. This is a U. S. Ad this spring and when we have a massive promotion around the Ryobi One Plus system. Let's see, Frank. Okay, here we go. Ryobi 1 plus is now the world's largest 18 volt system. It's because we keep making new innovative tools that help you get more done faster and easier. Now with brushless technology, our tools work harder than ever before. We're putting all that power in your hands so you can complete that dream project without having to plug in or fill out.com. And we never have or never will change our battery compatibility, so there's no tools left behind. That's why our new high performance lithium ion batteries will improve the performance of all our 18 volt tools, even if they're 20 years old. So what you have with this OnePlus system is a platform that has become seriously number 1 in the world in consumer DIY power tools. And the number 2 competitor is really there's a tie with 5 different companies for number 2. We're so far ahead in this space. I don't think people realize the strength in the position that we control today. And in outdoor, we also have a great story. We are pioneering a global shift, a revolution from petrol powered lawn care to cordless. So lawnmowers have historically been gas or petrol powered and we have developed over 20 different lawnmowers that are powered by a lithium battery. And can you imagine the benefit to the environment when you go from gas to using a lithium powered outdoor product? And you can see some of the products here today. We grew last year 17% in outdoor. And you have to remember, last year, one competitor after another announced how terrible the weather was in Europe and in the U. S. And how the weather conditions hurt the numbers. And we're in the same 50 states in the same countries and we're up 17%. And what that tells you is this business is not linked to housing starts. We are not associated with our competitors. We are it doesn't matter whether the market grows or shrinks. We're changing people from gas to lithium. So we control our destiny. The global market for mowers is roughly $9,000,000,000 The market that's cordless is less than 2% today. And believe me, we're going to change that and we will be on the vanguard of that revolution here when it comes to outdoor. So this is another area where we're really just getting started. We actually have competitors that are investing in gas powered lawnmower companies as we speak. That's like that would be like buying a payphone company to prop up your sales and earnings in the short term. And we don't do pay phones. We're doing smartphone. And that's how you have to look at TTi. We're a technology company focused on the future. And this is one reason why our results continue to be so strong. Okay. So this is the outdoor family. This is just outdoor, just lithium powered products and that slide is going to get busier and busier the next 3 years because we have dozens of really interesting outdoor products with the same battery systems that you see today. Okay. So the highlight of the year, of course, was the 28.2% growth in Milwaukee. Now think about that for a second. We're supposed to be in an industrial sector that grows G and P, we're up 28%. This is unheard of. We outgrow the market like 4 times. And the thing that you have to realize is we still are just getting started here. This is not an endpoint. What we've done is build out a foundation of strength and momentum. And I can assure you that that kind of growth rate is just a signal of our potential. We actually have the, frankly, the boldness to be able to guide that we're going to grow Milwaukee. Over the next 3 years, I feel very strongly we will grow this business 20% a year. And look, history is the best indicator of the future. So 5 year CAGR of 23%. And yes, Milwaukee base is getting a lot larger. But yes, the amount of new product come in, it will blow your mind. And yes, we believe we can grow 20% a year. And the gross margin, of course, of Milwaukee is highly accretive. So when you wonder how our gross margin keeps going up, obviously, if Milwaukee outgrows everything in a company, the gross margin is going to keep going up as well. And yes, we invested heavily in R and D, Frank, to drive our Milwaukee product development system. Eventually that SG and A will leverage down. We all know that. But right now, we're in a land grab. We are literally in an environment where there's so much opportunity. We think there's an opportunity from with our competitive set. We think there's massive opportunity for us to expand geographically and we are going to seize that opportunity here and continue to invest. If you look at our regional performance, this is a very exciting chart. Of course, we were up in North America, that's our home market, 20 7.9%. But look at Europe, How many articles have you read that say Europe is slowing down? How many of our competitors complain that Europe is a tough market? And we grew 33.8% in Europe. Whether it's Brexit issues or people talk about Italy being struggling, somehow our team found a way to grow 33.8% in Europe. And I can tell you that the next 3 years, our European theater of operations will be one of the most exciting growth areas in the company, whatever the economy does in Europe, because we're changing people from traditional power source to cordless. As we focus on just cordless for a moment, let's remember back over the last 4 years, there's been a lot of noise, competitive noise in the cordless market. And there are some people, some analysts thought we would be affected by some competitive introductions. But the fact is our main line of cordless, our high technology fuel system, which is brussels motors and advanced onboard software technology, We grew 45% last year. That's 3x the rate of our competitors' recent introductions in the cordless space, 45% growth in cordless. And I believe that that's a number that indicates the potential here, not an endpoint. You will see us continue to outgrow the market at a big rate because of what our strategy here, which is quite different. So and here's the here's why you need to stop worrying about the housing cycle, please, and stop reading our competitors' press releases. We are transforming the global market for power tools and equipment from traditional power source to revolutionary lithium powered cordless, whether it's an accorded power tool, a pneumatic tool, a hydraulic tool, a gas or petrol power tool or importantly, even a manual device. We're transforming all those traditional World War II era power sources, seriously, to lithium ion cordless. And that's we have the broadest line of professional cordless in the world today. That line is going to expand like crazy over the next 3 years and everything we launch will be high technology, will outperform the market and will give us more opportunity to continue this revolution. So let me give you a couple of examples. This lovely device is called a pipe threader and it's a little bit heavy. This is the first pipe threader ever developed that's cordless. So we are entering a market. So this device you put on a pipe and you spread it so that you can attach a fixture. All the pipe threaders in the world today are corded. This one is cordless first time ever and not only is it more convenient, but this cordless pipe threader is faster than a corded. Can you imagine? The cordless pipe threader is faster than corded because of the AI we build in because of the software technology. It's also safer because we have a clutch and if this gets locked up, instead of throwing you across the room, this thing shuts off and it actually becomes a safety advantage. So many, many contractors will insist on switching because of the safety element. Now that's an example. We have literally hundreds of products like this we're developing to change people from old fashioned World War II power source to cordless. Okay, here's another example. This is the 1st in the world ever 1 inch impact wrench. I love this product. This to me is a very sexy product, this impact wrench. So, what you have is a large size anvil to drive sockets for bridge building and ship building and these large circuit mechanical fasteners. Historically, you would use a device that weighs 3 times as much as a cordless unit. It's tethered, it's either pneumatic so it's got a hose or it's corded. If it's corded, it runs off a generator which burns diesel fuel and has all sorts of hazardous elements. And anyhow, this is the first in the world. Let me tell you what this is not. This is not where's Leon? This is not a Rescon product. You will not find this around the house. This is bridge building, ship building, etcetera. And what we're trying to show is that our served market has very little to do with ResCon and housing and a lot to do with the rest of the world. And that's why we have so much potential. So today, here's another cool impact driver. This impact driver was designed for the power utility industry. I'm going to talk about that in a second. And you'll notice when you work on a power line, you have to wear a glove that's insulated. Otherwise, the electrocution risk is bad. So you insulate yourself, but that glove is huge. So on this particular impact driver, we extended the handle so you can actually use it with a glove to keep it from getting electrocuted. Now it seems like a simple thing, right? First ever in the world. And we have many of these kind of innovations that will help propagate this revolution to cordless. We now have the broadest line of impact drivers in the world today. These are not rescon products. These are all industrial construction, maintenance infrastructure projects and the leadership position here gives us a great entry point into these different verticals again that are not respline. Here's another example, we just developed an angle grinder with an electric brake, cordless. You turn it off, it stops in 3 seconds, which is a major safety feature. And that now gives us the broadest line of cordless angle grinders that have these special features. Again, these are not Rescom products, but allows us to grow in the infrastructure space. Okay, here's another cool product. This is called Switch Tank. Here's a cordless sprayer and you can switch from a pesticide to water, to a detergent, to concrete sealant and we sell different tanks that work off the same platform. And for an end user in a commercial job site, this is a big breakthrough. And again, of course, it's cordless with the same battery. Here's an extension of our Milwaukee outdoor products. This is a chain we call this a chainsaw on a stick. It's a pole saw and it's part of a broad line of outdoor products that has allowed us with Milwaukee to use the same battery and serve the landscaper in the professional marketplace outside of the workshop. Of course, we have pioneered the concept of lithium powered cordless lighting. Lighting on job sites historically was powered by noisy generators that burned petrol. Now we shift to lithium powered lighting. There's no electrocution risk. It's the same battery you buy for your power tools. And this is a category that's taken off like wildfire for us and it has immense long term potential. So today, we have the broadest line of cordless professional tools available And this line has expanded so much that a very exciting phenomenon has happened. Historically, a tradesman, a core tradesman, plumber, electrician, carpenter, contractor, data common stone, a core tradesman would have back in 2008, maybe 4 tools, cordless tools, 3 batteries. But because this technology has expanded, think of this as apps for the iPhone, right? Because the technology has expanded, we think last year that the average core tradesman went to 39 tools and over 30 batteries. So when you're wondering how we're going to keep growing, let me tell you in 5 years from now that chart is going to continue to go up and up and up because as we come up with more cordless applications and we liberate people from the pneumatic and hydraulic and petrol, etcetera, there will be reasons for people to accumulate even more tools per tradesman. And of course, that creates an opportunity for storage. Where are you going to put all those tools? And of course, we have the answer, PACKOUT, which is the world's fastest growing pyro tool storage system. This is a system we've created, invented. It's interlocking. It's got really cool features and selling like crazy. So if you wonder, okay, how is CTI going to keep growing? Just think of the phenomenon that every user we have is accumulating more tools per year that are cordless. They're going to need more batteries and battery is a consumable, it wears out and you have to buy additional batteries and you have to store the things. So there's a lot of growth drivers that we have in front of us here. Okay. So let me just to finish my remarks before we open up for Q and A. Let me give an example again to help you understand why we're different than our competitors and why we're not focused on homebuilding and rescon. We have core trades at Milwaukee. These are all non residential construction. One of the most exciting is the power utility market. If you think about around the world, power utilities is the utility companies represent a huge end user market. This is a market that utility companies tend to be monopolies, so they make a lot of money. So they have a lot of money to invest in safety and productivity and we find the space loaded with innovation potential. So let me give you an example. This lovely device is an overhead cable cutter. So this is not the little wires around the house, this is to cut cable that can be 2 inches thick and it's cordless. Historically, you would need a pneumatic cable cutter to do the same application. It would cost 3 times as much, makes all kind of noise, is inherently unsafe and we solve that and liberate this user with these cordless cable cutters. And we have actually developed an awesome range of power utility products. This entire fleet of products is targeting the power utility companies that have to fix the power lines and this equipment to support infrastructure around the world today. We have come up with a really cool marketing strategy. We have actually these trucks, these cherry pickers, bucket trucks that we use and we call on the end user, this power utility user and we demonstrate our products and we have a truck that makes them feel at home. And when there are storms, we actually send these trucks into the storm zones to help these power utility people repair things and use. We show them how in most dire conditions, how cordless is much faster and safer than the way they've been doing it historically. And let me just take you around the world and tell you how this is going, just to give an example of one area of focus that's non res con. So this is a private utility company in Florida that switched all to Milwaukee. Here's one in Pennsylvania, U. S, all in Milwaukee. Here's another one, This one in Canada, Ontario. You see the happy end users who were liberated and made the switch. And here we have Mexico City, more happy users. Let's see, Tasmania, we believe it or not, we were used the Tasmanian users were old fashioned and now we've liberated them to something more appropriate. Here's Perth, Australia. Here's a massive infrastructure company, power utility company in Denmark, switched 100% to Milwaukee. And even in China, we are now starting to penetrate Mainland China with very exciting success stories in Power Utility. So just to summarize before we open up for questions, TTi is a different company than our traditional peer group. We respect our competitors. We learn from them, but we're nothing like them. Our strategy is we are a technology company. We're obsessed with cordless. We hire different kinds of engineers. We're focused on software development engineers and AI and our tools. We are moving away from abandoning traditional power source like petrol and AC. We are not focused at all on ResCon. We're focused on the infrastructure markets around the world. We're focused on liberating people from gas to cordless in the outdoor arena and even in DIY tools. And I think that you'll see the results today will give you an indication of the potential we have going forward. We intend to continue to grow this company at a much faster rate than competitors. We'll continue to grow the profits while we invest like crazy in our future, and I think that's going to put us in a very exciting position. And Mr. Chairman, I turn it back over to you. Yes. Thank you, Joe. One question I want to answer. Vietnam Vietnam was not our main focus. It was a wake up call for us. And we found out that we cannot do without China. We added a lot of automation. We're having with twice the output, less people than we had 5 years ago. But we had products which are cheaper in Vietnam to make for the future, which will improve our product margin. And of course, the tariffs helped us to think about it and put more focus on that. And what we have discovered, Joe, is that we will continue to do certain products in Vietnam, not only for the U. S. Or tariffs. Also, we will ship to Europe and other parts of the world. And in a way, it was good for us. And in the United States, we have 6 manufacturing plant, assembly plants, the same plant, which do a fantastic job, the bulk, the shipping, the cost involved. And as Joe said, we are not afraid or concerned about any tariffs. We have managed so far, and we will be okay. Now one more thing I want to say. I want to thank all of you that we have to say that we are very proud to announce that TTi has been included in the Hang Seng Index, the quantity stock among the first 50. That was also because with your help, your confidence supporting TTi, buying our stocks, and I really would like to thank you for that. And the 2019, we will give you another very pleasant surprise. We are 3 months into a year, and we have some visibility, and I think we'll have even a better year next year when we meet again or not. Thank you very much. Frank, anything? No, Mr. Chairman. Frank, thank you everybody for attending and hope to see you again in August, August. August. August. That's maybe even better news. Thank you.