Hello, ladies and gentlemen. Thank you for standing by, and welcome to the GDS Holdings Limited Fourth Quarter and Full Year 2018 Conference Call. At this time, all participants are in a listen only mode. After management's prepared remarks, there will be a question and answer session. Today's conference call is being recorded I'll now turn the call over to your host, Ms.
Laura Chen, Head of Investor Relations for the company. Please go ahead Laura.
Thank you, Heaven. Hello, everyone. Welcome to the 4Q 2018 and full year 2018 earnings conference call of GDS Holdings Limited. The company's results were issued via newswire services earlier today and are posted online. A summary presentation, which we'll refer to during this conference call can be viewed and downloaded from our IR website at investors.
Gdsservices.com. Leading today's call is Mr. William Huang, GDS' Founder, Chairman and CEO, who will provide an overview of our business strategy and performance. Mr. Dan Newman, GDS's CFO, will then review the financial and operating results.
Before we continue, Please note that today's discussion will contain forward looking statements made under the Safe Harbor provisions of the U. S. Private Securities Litigation Reform Act of 1995. Forward looking statements involve inherent risks and uncertainties. As such, the company's results may be materially different from the views expressed today.
Further information regarding these and other risks and uncertainties is included in the company's prospectus as filed with USFCC. The company does not assume any obligation to update any forward looking statements, except as required under applicable law. Please also note that GDS earnings press release and this conference call include discussions of unaudited GAAP Financial Information as well as unaudited non GAAP financial measures. GDS press release contains a reconciliation of the unaudited non GAAP measures to the unaudited most directly comparable GAAP measures. I will now turn the call over to GDS founder Chairman and CEO, William Huang.
Please go ahead, William.
Thank you, Laura. Hello, everyone. This is William. Thank you for joining us on today's call. 2018 was an amazing year for GDS, We achieved outstanding results in terms of new business, results, development and financial performance.
We see a sustained high level of demand for data center capacity in China. And we are clearly fast positioned to capture this opportunity. Let's start with our sales achievement. In 2018, we signed up customers for over 81,000 square meters of net additional area committed, or over 180 megawatts of IG power capacity. Almost double what we did the year before.
This may be the highest ever reported by a data center company. To support this level of sales, we scaled up our resource development adding around 100,000 square meters of total capacity. We increased our data center count from 'twenty at the beginning to the year end of the year to 'thirty five at year end. We invested nearly $700,000,000 in CapEx compared with the $300,000,000 in 2017. The flow through to our financial results was impressive.
Our growth accelerated, hitting over 70% for revenue and over 100% for adjusted EBITDA year over year. In the last quarter, our adjusted EBITDA margin hit 40%, almost 10% points higher than in 4Q 2017. Meanwhile, we maintained our disciplined approach to capital management, with every project fully funded. Over the year, we secured over 1,000,000,000 of funding raise. Today, I'm excited to announce that we have secured a 150,000,000 strategic investment from Ping An, which I will talk about later.
Turning to the Slide 5. We ended 2018 with another quarter of strong sales growth. In fact, 4Q 2018 was a record for us. 22,000 square meters of net add or organic or in Tier One markets. How did we achieve this staggering sales performance?
The growth of our business is These verticals have been growing at high rates and will continue to do so. During the first wave of growth, we succeeded in establishing very strategic relationships with the top tier of cloud and internet customers in China. Cloud went from 0 to 70% of our area committed in 3 years. We continue to deepen these customers relationships and that they continue to generate significant intent new business. In 2017, our top 3 customers contributed 35,000 square meters to our new bookings.
In 2018, the same 3 contributed 47,000 square meters. Building on this space, we targeted new strategic customers. Companies which are reaching an inflection point in their business. This yielded results faster than what we that we then we expect new strategic customers such as JD, Kingsoft, NetEase and Ping An Technology, contributed 28,000 square meters or 35% to our new bookings stand our current sales momentum. Our strategic customer relationships give us bottom up visibility into new demand.
We are now tapping into a large and more diversified group of hyperscale customers. Which includes every significant domestic and global cloud service provider in China. The digital economy is now slowing. Chinese government policies are promoting growth. New technologies are coming, which can be demand multiplied.
China is focused to spend around RMB 200,000,000,000 on 5 G CapEx up to 2025. This can enable a new wave of ultra low latency data, which makes our data centers even more in demand. Let's turn to Slide 7, results progress. Turning to results on Slide 7. We focus on Tier 1 markets where demand is concentrated and align our resource development around the growth plans of our customers.
This enables us to maintain exceptionally high commitment rates. In 2018, we started 15 new data centers with a total capacity of 100,000 square meters and broad 10 new data centers into service, adding 59,000 square meters We probably have 1 of the largest construction programs in the world. We ended the year with 48 percent pre commitment rate for area under construction and a 95% for area in service. In 4Q 2018 alone, we started 5 new data centers. I would like to highlight the 2 in Kunshan.
This is a site 45 kilometers from the center of Shanghai. Where we own the land. The project is our largest to date Greenfield project. And 100% pre committed. Securing real estate and power capacity in Tier One market is very challenged, as the scale increases, so that's the challenge At the end of last year, we had 79,000 square meters held for future development in Tier One markets.
This is enough for about 1 year new business at current run rate. Despite the challenges, we have successfully added new capacity in downtown area. For example, during 2018, we were able to increase strengthen our development pipeline and maintain our resource advantage. We have started to acquire land in strategic locations on the edge of the big cities. This is a long and complicated progress.
A process as it involves identifying sites which work for our customers. Have the right telecom network connectivity, sufficient developable area and power capacity. And where the local government is supportive. Availability of land and power is still major barrier. In January 2019, we completed the acquisition of the strategic site in Guangzhou, which can support 34,000 square meters of data center capacity.
We are also at an advanced stage with strategic sites in Changshu near Shanghai, Longfeng near Beijing, Chengdu and Chongqing, which would be a new Tier 1 market for us. Within the next few quarters, we expect to have locked up at least 3 years supply and further strengthened our resource advantage. Finally, we are seeing quite a few attractive M and A opportunities. These are asset deals which could add capacity in key location and shorten our time to market. We are currently evaluating several targets We are highly selective and will only move forward if the deals are strategic and value accretive.
Let's turn it to Slide 11. GDS today is in the strongest position ever. We have the largest market share in the fastest growing market in the world. Fantastic customer relationships and proven ability to execute in a superior way. Our team has demonstrated for many years that it can set a big goal and exceeded them.
Our growth has accelerated and underpinned by a stronger secular trend. With that as a strategic backdrop, we will continue to build on our competitive advantages and further increased gap between ourselves and other players. My priority for 2019 are clear, enhanced resource supply in Tier One markets, both organically and by acquisitions. Build on our strategic customer relationships and reduce our unit development costs and maintain investment returns. Let's move to Slide 12.
Before I hand over to Dan I'd like to say a few words about Ping An's strategic investment, which we have just announced. Ping An has been an investor in GDS for the past 6 years and we are honored to count them as one of our top customers. Pingya is the 3rd largest non SOE company in China by market cap and finance and technology powerhouse. PMI is the market leader in key digital verticals such as fintech, healthcare, auto services, real estate and smart cities. Their platforms include the largest online finance marketplace, insurance provider and healthcare ecosystem.
GDS and Ping An are committed to working more working together to realize synergies in technology, real estate and financing. We are proud of the trusted relationship we have built with Ping An and are excited to work more closely together in future. With that, I will hand over to Dan for the financial and operating review.
Thank you, William. Starting on Slide 16, where we strip out the contribution from equipment sales and the effect of FX changes. 2018 finished strongly and I'm pleased to say that we beat our revised guidance for revenue and adjusted EBITDA. In 4Q 2018, our service revenue grew by 10.2% Underlying adjusted NOI grew by 13% and underlying adjusted EBITDA grew by 15.9% in consecutive quarters. Our underlying adjusted EBITDA margin hit 40% in the last quarter.
For the whole year, our reported adjusted EBITDA margins increased to 37.5% compared to 31.7% in FY 2017. Turning to Slide 17. The main driver of revenue growth was the increase in area utilized. With over 7600 square meters added in the 4th quarter and nearly 47,000 square meters added over the whole year. Monthly service revenue, or MSR per square meter, declined slightly in 4Q 2018, and we expect that it will continue to decline by around 5% over the course of FY2019.
The MSR trend is tracking the reduction in our unit CapEx cost, and it is our strategy to share this benefit with our customers while As shown on Slide 18, our profit margins are on an upward trend. As it takes a center level, our adjusted NOI margin was nearly 50% in 4Q 2018. As illustrated on Slide 19, 58% of our portfolio is now stabilized, up from 45% this time last year. This shift has been a major contributor to the NOI margin increase. As shown on our SG and A was just over 10% of service revenue in 4Q 2018.
We expanded our headcount by 20% last year, to gear up for our accelerated growth. We expect to realize significant further operating leverage over our central costs, and target SG and A to be around 8% by the end of FY19. Turning to our CapEx on Slide 21. 4Q CapEx increased to RMB 1,700,000,000, including nearly 700,000,000 related to the Hong Kong land acquisition. For the full year, our CapEx totaled around 4,700,000,000 or $690,000,000, which was higher than we guided due to the accelerated delivery of a project in Beijing and the initiation of 5 new projects in the last quarter.
Is 59,000 RMB per square meter, excluding the real estate portion. For comparison, the unit CapEx for everything we have completed so far is RMB68000 per square meter. With regard to financing on Slide 22, during FY 2018, we obtained RMB3.8 billion or $550,000,000 of debt facilities, including refinancing. We've established an excellent track record for project financing, and in current conditions are getting the best terms ever. On the equity side, we just announced a convertible preferred share issue to Ping An, The key terms of which are summarized on Slide 23.
It's a $150,000,000 investment with 5% annual dividend payable in cash or kind at our option and a conversion price of $35.60. We can force conversion after year 3 if our share price goes up above 150 percent of the conversion price. I. E. $53.40.
The instrument is treated as equity for accounting purposes. On completion, it will take our pro form a year end 2018 net debt to last quarter annualized adjusted EBITDA multiple down from 8 to 7.2 times. As William mentioned, we feel really good about our market position, customer franchise, resource pipeline and opportunities in front of us. Financing is the final ingredient. You may have seen our announcement regarding the launch of an ADR offering.
Since we are in process, I cannot comment on the offering on this call. However, I hope you can see that today we are putting in place the capital we need to position GDS strongly for the next phase of growth. Turning to Slide 24. At the end of 4Q 2018, our backlog had increased again to over 75,000 square meters. We currently have around 108,000 square meters, which is revenue generating.
The backlog therefore implies that we can grow our Finally, on page 25, we base our revenue and adjusted EBITDA guidance on the installed base the project delivery schedule and the expected customer move in rate. We start from a solid base as quarterly churn was only 0.9% last year, and less than 7% of our total area committed is due for renewal this year. We also have a high degree of visibility from our substantial backlog. With that said, to be in the range of RMB3.9 billion to RMB4.1 billion implying a growth rate for total revenue of over 43% at the midpoint of the range. We expect adjusted EBITDA to be in the range of 1,640,000,000 to 1,700,000,000 implying year on year growth of close to 60% at the midpoint of the range.
Our revenue and adjusted EBITDA guidance implies an adjusted EBITDA margin of 41.7 percent for FY 2019, which would be 4 percentage points higher than FY18 using the midpoint guidance numbers. We also expect CapEx of RMB 4,500,000,000 to RMB 5,000,000,000 Included in this guidance is a budget of around RMB 500,000,000 for land acquisitions. With that, I'll end the formal part of our presentation. And we'd now like to open the call to questions. Kevin?
Thank you. There might be a slide pause as questions to queue. Thank you very much. And our first question here is from John Atkin from RBC. Please ask your question, John.
Yes. So, thanks very much. I had a question about, build costs and you talked about kind of the reduction in the cost per square meter And if you were to normalize that for power and just take about some of the design parameters around your data centers and resiliency levels and so forth, Is there, further improvement that you think you can make in CapEx spend per unit of capacity And then my second question is just in terms of the scale of the business. And, as you go to more square meters sold and commissions, over the next year. Are you able to accommodate numbers significantly greater than 80,000 in terms of your ability to construct quickly and accommodate demand if it were to further increase.
Thank you.
Hi, Joanna. I'll start by answering on build costs and then let William address how we are reducing it. But just in terms of numbers, I mentioned that what we have under construction right now has an average unit cost of 59,000 RMB per square meter. We're excluding a couple of 1000 RMB because certain of the projects had some real estate portion. So normalized for that, it's 59,000 RMB per square meter.
So we're building, let's say, on average, around 2 kilowatts per square meter or slightly higher. So you can see on a per kilowatt basis that would imply around 29,000 or 30,000 Rmb per kilowatt. But to give you an idea where it can go, we have done projects where the build cost has been 25,000 or 26,000 RMB per square meter, and those are projects in Tier One markets. The projects we did in remote location were another quantum below that level, although in that case, what we're really looking at is a different kind of product with a different design with lower redundancy. But I think all of this gives you an idea of of what can be achieved over time.
William, do you want to add to that?
Yes. I think the product is not very diverse Fi and based on the current fast move market. So we are be able to design a different introduced, different architecture to our different customer. For the multi tenant type of product, it's almost standardized. We finalized the standardization.
For the Bluetooth product, we try to introduce lead our customer accepts suitable architecture for them. This is number 1, so reduce the cost. It's a we have the various way to reduce the cost. And we also share some cost saving for our customer On the other hand, we are pretty likely to leverage our current scale. As I mentioned, we are the most maybe most largest data center director in the world.
So we are we do have the ability to will manage our supply chain. And this will let us have the huge space to improve the cost.
On the final part of your question, whether we have the capacity to exceed 80,000 square meters, of course, assuming the demand is there and that we can capture the orders. John, that's certainly our objective. On the resource side, we talk about significantly increasing the amount of resource that we had secured. Up to 3 years supply in each Tier 1 market. And within a few quarters, we aim to be there the holding cost of that resource is very low.
It's insignificant. But what it does do is give us the ability to respond to whatever level of demand there is. That is higher, we can accelerate. The other element of course is whether we have the financial capacity, so that's what we're trying to put in place today. The ability to have a fully funded 2 year business plan and the flexibility to do more if the opportunity is there.
John, I would like to say, based on our current resource plan, and our funding plan. And you will see we have the ambition to do more, right? But every time we try to manage the expectation properly,
Thank you. And then in addition, as you think about where you want to add new capacity. I'm interested in your views on kind of satellite markets. And Kunshan is an interesting example because showing signs of life recently, from both you and I think maybe even some others. And that's been facilitated by improved fiber connectivity across provinces.
And so are there analogous examples that, that you see in other parts of China that might lead to development opportunities in some new markets?
So, John, firstly, just from the definition point of view, because There can be a lot of confusion about this. Satellite markets are Tier 1 are just part of the Tier 1 market. So maybe the periphery the Tier 1 markets, but we don't let anyone think we're talking about something else Tier 2 market or something. We're just talking about sites which are on the periphery of Tier 1 markets, such as Kunshan and such as the other sites which we are working on in terms of land acquisitions. Now there are only very few locations around the edge of Tier One markets that work.
So William, do you want to address that?
Yes, I think the, in terms of the, we treat this edge time surrounded tier 1 market, it's Tier 1 market. So it should fulfill the local infrastructure, it's a very, very good. And the second of the network connectivity is work the 3rd of the local government support. The 4th is the power, existing power or potential power capacity can fulfill our business plan in the future in the next 3 or 5 years. This is our criteria, but that means there's a lot looks like a lot of the locations you can select, but actually not, just very few locations suitable for you, for us, meet our criteria.
So we are we try to be a 1st mover in this land acquisition to build our next wave resource advantage. And we start to working with that, without that, almost 1 point 5 years.
The next telephone question is from Frank Louthan from Raymond James. Please ask your question, Frank.
Great. Thank you. Can you walk us through a little more color on what exactly the JV is going to do for you and the assets being put in there. And then can you talk to us about as far as your demand goes, if talk about going forward, any need to expand outside of China? Are you still pretty much looking all domestically?
Frank, I don't know if we've confused you. We haven't established a JV. If you were referring to the Ping An investment, they are investing in our equity. In fact, they will take their ownership level up to nearly 10%. But at the same time, we are increasing our strategic cooperation in various areas, William would like to comment on some of the potential areas for cooperation?
Yes.
I would say Ping An is Pianan Group is a big group. They had the financial service and they also had the Ping An Technology. So from the our GDS sites, we treat them like, we can have the more deepened relation cooperation with that in several areas. One is that Ping out last year, Ping An already be our have been our top customer. This is new.
And we believe we will do more deals in this year in the next few years. So they are our strategic customer right now. 2nd of all, Ping An, they also own a lot of property in China. This led us have the more flexibility to develop our resolved plan. So we are working on some projects right now with them.
The third one Pingai is in China, they had the insurance bank and other financial institution in China Security. So we are we also potentially maybe can work with them in a project level in order to get more lower interest rate and get more stronger support in our project.
So Frank also asked about thoughts about expanding outside of China?
Oh, I think current, so our study is still in China. That's our main focus. It doesn't change. And then outside China, we are more expected to have some more projects in Hong Kong. So everybody know, last year, we acquired a piece of land in Hong Kong.
We already start to, in that process to design and try to build as soon as possible because we got a lot of the, our main China based customers' demand already. So we try to seeking more projects in Hong Kong. That's our current plan.
Got it. Okay. And thanks for the better explanation on Ping An. And then what's the outlook for adding new logos over the next 12 months? How's the sales force focused and compensated on that?
What do we expect for new logo growth?
Yes, Frank's asking. I think we take it in two parts, William. 1st of all, in terms of strategic customers, more targets, in that category. And then second part, the growth of our enterprise customer base. Yes.
Yes. I think we have our sales strategy is very simple. I think number 1, current priorities I will still follow-up the clock because cloud is still in the very early stage in China. The good thing is GDS is already ready for right on their growth because we have all the major crop player customer in China. And they are deploy their computing and cloud pops in a significant way in GDS.
That's very unique. And that's where we are confident to write down this trend. 2nd of all, I think the we there's a lot of new internet giants still growing very fast. Everybody knows last year, we are quite a lot of the new internet vertical giants like Ctrip, like TD, like NetEase, there's all the biggest supplier in each vertical. So we believe there this new logo will let us have another key driver to drive the demand for us.
On that and for the retail side, we keep developing some well named, well known name, customer, especially in financial service. Last year, we gathered 2 significant new customers, 1 is the China Unipay, 1 is JP Morgan, So I think this way we'll still keep this development in the 3 major verticals.
Okay, great. Thank you very much.
Our next questionnaire is from Gokul from JPMorgan. Please ask your question.
Yes, hi.
And Dan, thanks for your comments. Just first question I had Could you talk a little bit about the details of what you talk about pricing potentially going down 5% in 2019? Are these primarily for the newer contract you're signing? Is it because of the expansion to more satellite locations and the 5% down, is it excluding the impact of her base?
Yes, Gokul, the multi service revenue per square meter in 2019, we'll largely price that's in the contracts, which are already in the backlog. So as those contracts are delivered, that's what will result in a change in the MSR. That trend has been there for at least 3 years. In fact, our MSR went up and down, but it's actually overall has trended down. What I try to point out, which I think I try to point out on every earnings call, is our unit CapEx is also trending down.
And our target is to maintain our returns, which we have done so very consistently, in the 13% to 15% IRR range, over multiple years. And with certain customers, that's very transparent. What I think is the positive in this is that because we're able to reduce our unit CapEx cost, we can create a value for our customers. We can create a cost benefit to them. And that is something which is very positive to them.
We can do that whilst maintaining our returns is absolutely win win.
Our next telephone question is from Colby from Cowen And Company. Please ask your question Colby.
Great. Thank you. Two questions, if I may. I think your book to bill is something just over a year long. And at this point, I think you said you have somewhere around 79,000 square meters in your backlog.
Taking those things into consideration, what are some of the bigger, dynamics that we should be paying attention to that could swing you either below or potentially above the guidance that you put out there for 2019. And Part of what's behind that question is that in 2018, despite those, that structure being the same, you were able to raise your guidance a few times through the course of the year. And then secondly, you seem like you're going to be doing a lot more M and A of asset, data center assets in 2019. Would that be in lieu of CapEx or would this be in addition and I guess to the extent that you're successful with those, could that potentially be a source of revenue growth acceleration or at least how should we think about that in terms of revenue impact and also, I guess, how long would fund that?
Yes. Hi, Colby. It's good questions. Last year, you're right. We experienced a shorter, book to bill time lag than we had done historically.
This year, for the purposes of guidance, we kept the, assumption that we've had from past years, which is more like 15 months or 5 quarters. And when we look at it bottom up, we look at what data centers are coming into service in which quarter, what do we know about our customers moving intentions, what's the delivery schedule in the contracts. So I think our approach is conservative, but leave some scope upside, but it can't be very much deviations, if we're talking about 1 year forward, On the second question, M and A can be a substitute for organic. If we acquire capacity in a particular location, it may shorten our time to market. And then we readjust our organic development program in that market maybe to hold back or slow down an organic project.
If that's the case, it doesn't add to our CapEx, in terms of the guidance for this year. But if the acquisition is in addition to, meaning that we carry on with our organic program as originally intended. And this is a supplement to that. Then it is on top of what the guidance that we've given. It's hard to say at this stage.
We do have several targets, which we are, quite far along in terms of our evaluation. And frankly, they could fall into both categories. They could be targets which shorten our time to market and therefore, we prioritize their mobile organic, or there could be targets that add to the extent of our development activities. If they shorten our time to market, it can have positive revenue and EBITDA impact this year, maybe not very material, first of all, because we're already in March and there's only so much time left in the year. And new data centers coming into service, they may actually have negative EBITDA, initially at the project level.
But I think in terms of, forecasts for 2020, yes, it could add quite significantly depending on how many projects we do. Does that answer your question?
No, it doesn't. Just one quick follow-up. You mentioned guidance is assuming 15 month book to bill, which is longer than 2018, but in line with historicals is, are you actually expecting the book to bill to go back to those longer that longer term or is that just you trying to be prudent in your guidance?
Both actually, Colby. Yes, there's nothing fundamental has changed. To make customers, shorten that time period. In fact, we're probably getting pre commitments earlier in the life cycle of projects. I mean, invariably now, we have a pre commitment on day 1 of a project.
Sometimes we can't announce it because it's a pre commitment in the eyes of our customer and in our eyes, but it may not be a contra tax. But with pre commitment being made earlier, then it actually extends that book to bill time period. So if we stick around 15 months, I think that's pretty reasonable assumption. I'm not being overly conservative, with that, I think it's the appropriate assumption.
Our next questionnaire is from Yang Louis from Morgan Stanley. Please ask your question Yang.
Thanks for the opportunity to ask questions. I have two questions. The first one in terms of the new Tier 1 market you plan to enter this year causing demand and a return profile there and also the expected customer moving pace with new Tier 1 market? And the second question is, is there any early sign of the other Tier 1 Cities in addition to Shanghai, local government will adopt, electricity or power quota, in terms of giving approval to a new data center? Thank you.
First question was which new Tier 1 markets are we looking at and what are the conditions there? Second question is are there any cities where the government is very supportive?
Yes. I think we are still the Shanghai Beijing, Shenzhen, Guangzhou, still the Tier 1 market and including Chengdu, I mean historically, it's the IT center. So we are we a last quarter, we say we will we are quite active in the Chongqing market right now. So we think Chongqing giving a time, they will become another Tier 1 market in our view. And Hong Kong is our another new target.
I think we are since GDS has been in Hong Kong almost 6 years. And last year, we think the opportunity is mature right now. So last year, we made our decision to acquire one piece of the land and we're seeking further more development in Hong Kong. So this is Chongqing and Hong Kong is new to market where we are paying attention So this
How's the return profile in this to a new market?
What? Your return profile?
I think it will be similar like what we're targeting, but if we are we promise we'll commit all the its profile will be in a 13% to 15% IRR.
Thank you. My second question is, is there any early sign of other Tier 1 Cities besides Shanghai? The local government will adopt a power quota, when giving the approval to build new data centers.
Yes, we are very familiar with this. And because we are one of the data center players to support the local government to build up their criteria. So, definitely, we will be one of the beneficial. I think the process is still not not still in another process. We are, keep, talk to the government And I think this will let us have another opportunity to build a data center in the urban town.
So that's the current
Did you only mean that whether other cities would adopt the same quota approach of Shanghai?
Currently, it's only Shanghai, but what we see is Beijing Government, just like last week, ask us, they try to understand what's, what's Shanghai government doing right now we have them to understand the new criteria, what's the logical rationale, what we help to the government to set up
Got it. Thank you.
As there's no further questions, I'd like now to turn the call back to the company for any closing remarks. Please go ahead.
Thank you once again for joining us today. If you have further questions, please feel free to contact GDS Investor Relations through the contact information on our website or the Piacente Group Investor Relations. Thank you all.
This concludes the conference call. You may disconnect your lines. Thank you very much.