Ladies and gentlemen, thank you for standing by. I'm Constantino, your Chorus Call operator. Welcome and thank you for joining the ArchCity conference call and live webcast to present and discuss the Q3 2021 Financial Results. All participants will be in a listen only mode and the conference is being recorded. The presentation will be followed by a question and answer session.
At this time, I would like to turn the conference over to Mr. Polatzen, Chief Financial Officer Mr. Orkand Sime, Finance and Enterprise Risk Director and Mr. Alper Gur, Investor Relations and Capital Markets Compliance Manager. Mr.
Sen, you may now proceed.
Thank you very much. Good afternoon, ladies and gentlemen. Welcome to our Q3 2021 results webcast. Before going into these details, I'd like to take the opportunity to thank all of our employees for their dedication and hard work during this year. I'll start with Slide 2.
Let me give you the highlights of the 3rd quarter. Our consolidated net sales was TRY 18,100,000,000 in this challenging quarter, registering 2% year on year and 25 percent quarter on quarter growth, while the growth was 29% year on year and 6 percent quarter on quarter organically. As expected, as the demand across regions started to normalize within the quarter and raw material costs continued to increase. Despite falling demand and cost inflation, we have been able to post better EBITDA margin of 10.4% compared to the previous quarter on comparable basis excluding the impact of acquired operations of Hitachi and Whirlpool Manita factory. On a consolidated basis, including the impact of our recent acquisitions, EBITDA margin has stayed flat as 9.8%.
The resilient profitability was a result of operational efficiency, the price increases in the market and the positive mix impact. Our OpEx to sales ratio in 3rd quarter came down by 194 basis points to 21.2% compared to the last quarter. On comparable basis, the ratio was down by 90 basis points to 22.1%. Enjoying the positive impact of acquisitions and improvement in net working capital items, our net working capital to sales ratio was decreased to 26 0.1% from 26.8% in the Q2 of the year. As of July, we have started to buy back our shares since we do not believe that Artific's market capitalization does not reflect its actual operating performance.
As of September end, we have acquired 26,600,000 shares in total, corresponding to 3.9 percent of the equity with weighted average price of TRY32.12.30. Our leverage was 2 times in this quarter, including the share buyback impact of 0.12 times, still around the safe zone. Our recent acquisitions is included in the leverage calculation with 3 months operations. Therefore, the leverage is negatively impacted with an annualized EBITDA contribution of our recent acquisitions, the leverage would also be positively impacted again 0.12 times as well. So you will see 2 times, but comparable basis it is 0.12 and 0.12, totally 0.24 times less than that.
Let's move on to the other slide. Our revenue on a consolidated basis has increased 52 percent as I've just explained to TRY18.1 billion in the Q3 of the year, thanks to the additional units mainly from recent acquisition and price increases and strong euro dollar against Turkish lira. The growth was 29% year on year like for like basis. As I was mentioning, the raw material costs continued to increase in this quarter as well. In addition to lower capacity utilization, strong U.
S. Dollar and euro and relatively lower profitability of our recent acquisitions resulted around 200 basis points contraction in gross profit margin on a quarterly basis. Like for like basis again, our gross margin was 29.8%, reflecting the limited contraction compared to Q2 'twenty one. Within the period of July to September, we saw an increasing trend in gross margin and particularly in September, our margin was above 30%. On the right hand side, you can see our EBITDA margin.
The operational efficiencies that we have created in this quarter helped us to deliver 10.4 percent EBITDA margin, 62 basis points higher compared to the 2nd quarter, again on like for like basis. On a consolidated basis, including the impact of recent acquisitions, the margin was 9.8%, which is flattish to Q2 as the diluted impact of acquired lease were not as high as Archila. I'll move on to domestic markets. In the Q3 'twenty one, Turkish MDA VI market was down by 11% in unit terms as it was expected due to the strong base of the last year. Our performance was slightly better than the market, yet we posted 9% contraction in unit terms on a yearly basis.
Besides cycling its strong growth a year ago, consumer appetite was not high due to the inflationary macroeconomic environment and natural disasters experienced in our country. On a cumulative basis, Turkish MDA6 market was up by 12% in 9 months 'twenty 1, while Archimix volume has increased by 18% on a yearly basis. Thus, we have maintained our strong leadership position in the Turkish market. AC market grew by 25% year on year on 3rd quarter and our AC sales have increased by 18%. CD market continued to shrink after Q2 as well.
I'll move on to the European market. In Western Europe, we saw contraction at varying degrees in almost all the countries in both July August, mainly due to the high base of last year. We have seen the highest contraction in UK as companies still having supply chain disruptions and driver shortages, which causes lag in delivery. In Eastern Europe, Ukraine, Romania, Poland and Russia continued to grow, yet the growth was decelerated compared to the previous quarter. The share of European markets, I'm moving to the other slide, the share of European markets in our total sales was 43% in Q3 of 'twenty one, of which 30% was coming from Western Europe and 13% was coming from Eastern Europe.
As demand was weakening in Western European markets, Arctic took benefit of having acquired inverter manufacture. The additional units provided by that acquisition together with the price increases led revenues to be increased by 20% quarter on quarter and 25% year on year in euro terms. With strong Q3 performance, Beco has strengthened its market leadership position in UK as of 9 months 'twenty one results while Archilb Group was gaining slight market share in France, Spain and Italy. In the Eastern Europe, Argentina benefited from relatively good demand and increased its top line by high teens percentage on quarterly basis. With Deco and Arctic brands, Archivik Group maintained its strong leadership position in Romania in this quarter as well.
Our price index in Russia has been increased in July August, while we were able to gain slight market share in Ukraine with improved price index. When we look at Africa and APAC, cycling a quite strong base with lower units sold, South Africa revenue was contracted by mid to high single digit percentage in Q3 on a yearly basis in euro terms. On a quarterly basis, despite the looting issues in the country, Ifai was able to increase its sold boats in domestic and export markets and also increased its top line by double digits. Just like in most of our operating geographies, our strong leadership was maintained in South Africa as well by even gaining market share in the 1st 9 months of 'twenty 1. In line with our strategy, APAC sales is now getting more share in our total sales with Archila Hitachi contribution.
Archila Hitachi shares in total APAC region sales was 60%, while its share was 11% on a consolidated basis. Despite the 4th wave of COVID-nineteen and continued inflationary environment, our sales in Pakistan was 25% higher in both PKR and euro terms on a yearly basis, thanks to the continued high demand and pricing freezes. Having been impacted mainly by the government imposed restrictions, our sales in Bangladesh contracted by 26% on a yearly basis in Bangladesh taka terms. When we look at the raw materials, in this quarter, average metal price index was flat compared to the previous quarter as copper, aluminum and electric sheet metal price negatively impacted from electric prices that we are facing with. On the contrary, average plastic prices came down from 3rd quarter from historic high levels compared to the last quarter, mainly due to the supply surplus normalization period and eased force measures.
We now see that the average raw material prices in 4th quarter are parallel with 3rd quarter and expected to be parallel in first quarter as well in 'twenty two. Yet this energy crisis that the world has been facing with so far is going to have a negative impact on some of the raw material prices. Going forward, although the uncertainties are still there, we expect the average raw material prices to be lower in 'twenty two compared to 'twenty one. So, I'm going to leave the
stage to Ozkan to move on from here. Thank you. I will continue with the sales breakdown. In Q3, Turkey sales grew by 31.6% year on year organically. On the other side, our international sales grew by 62.7 percent of which 4.4 percent was organic growth, 22.6 is FX impact, 35.6 which is actually 2.8000000000 is coming from the acquisitions.
We are benefiting from diversified operating geographies. On the right hand side, you can see our revenue breakdown. The share of Turkey in total sales has gone down by 4.5% compared to the same period of last year and by 0 point 3% on quarterly basis as our recent acquisitions enhance our diversification. I will continue with the financials. Here you can see our detailed financials.
Those figures include the impact of our acquisitions. As mentioned in the highlights section, thanks to the contribution of recent acquisitions and price increases, we have strong revenue growth of 52% on a yearly basis and 25% on a quarterly basis. Excluding the contribution of acquisitions, yearly growth was 29% while quarterly growth was 6%. With revenue of TRY18 1,000,000,000 in Q3, we have reached TRY45,600,000,000 in year to date figures. Our consolidated gross margin was 28.2 percent in Q2, Q3, reflecting the further increases in raw material costs and the dilutive impact of the acquisitions.
On a comparable basis, gross margin was 29.8%. Despite lower gross margin in Q3 compared to the previous quarter, we have been able to sustain our EBITDA margin of 9.8% through operational efficiency. Without the impact of acquisitions, we have delivered EBITDA margin of 10.4%. EBITDA of TL1.8 billion is almost the same as last quarter. In new today figures, we have reached 11.2% EBITDA margin, which is in line with our guidance.
Thanks to the strong operational profit, we will see our consolidated net income of TRY 716,000,000 in Q3, which is higher than last quarter And our net profit margin is 3.8%, 3.9% on a consolidated basis, while Turkish on a comparable basis. In year to date, previous net profit is TRY5.1 billion, which is 5.2% of revenue and almost 50% higher than last year. I will continue with the next step slide. Our leverage was 2 times in the 3rd quarter, stayed flat compared to last quarter. We have been able to manage to sustain the ratio at quite healthy levels despite cash outflows per acquisition and having EBITDA contribution only for 1 quarter and cash out of payback.
When the value of the shares acquired by the end of September is added to the net debt calculation, the leverage will be 1.83 and if we consider the impact of annulization impact of EBITDA, it will be 1.76 times. On the right hand side, you can see our loan and bond portfolio with TRY 21,000,000,000, which is with where 35% of the portfolio is Turkish lira loan and bond. As you know, we are financing our Turkish business working capital needs in Turkish lira loans. Starting from the Q3 of this year, as the market rates have gone up, our effective interest rates have been higher. But as of September, the effective rate is for the loan of Turkish bahai is 17.2%, still lower than the average market borrowing rate.
We have built our €360,000,000 bond in September, therefore our growth sets that decreased compared to the 2nd quarter. Next slide, you see breakdown of working CapEx and free cash flow. In this strong quarter, we have generated 40 free cash flow of CLN 43,000,000,000. Net working capital to sales ratio has improved from 26.8% to 26.1%. Strong EBITDA together with an improved net working capital sales and flattish CapEx sales ratio helped us to boost the positive free cash flow.
On cumulative basis, above September, our free cash flow was negative at 3,000,000,000. However, in the coming quarter, we expect to create better free cash flow compared to the previous quarters. Now, I will leave the floor to Polak for the guidance.
Thank you very much, Svein. We have decided to make slight adjustments to our revenue guidance compared to the Q2, while keeping all other items the same. Based on our most recent forecast, we increased our Turkey sales growth expectation from 30% to 35% and our consolidated sales growth expectation from 50% to 55%. Please kindly be informed that almost half of our 35% international sales growth guidance is the revenue contribution of our recent acquisitions. As we are getting closer to the year end, we are quite confident to achieve our guidance in all lines.
Thank you very much for listening to us. We are expecting your questions.
The first question is from the line of Lanka Sashank with Bank of America.
Yes. Thank you. Good afternoon and good evening, everyone, and thank you for the opportunity to ask questions. So my question is related to the raw material prices, especially in the plastics market. I think in the last few weeks, we've seen prices go up pretty significantly due to the Chinese dual control policy that we are seeing.
I just wanted to understand how are your raw material contracts right now over this quarter as well as Q1 next year? And how should we be looking at the trajectory? I know you said it's going to be flat Q on Q, but just wanted to get a more 6 month kind of a view here. Thank you.
To be honest, we have been going through a lot of crisis this year, first the chipset crisis, then the logistics crisis. Now we are facing the energy crisis. And all those are affecting every single raw material item in a different way. So especially with these energy crisis, we are mainly affected with price pressure from, for example, aluminum is affected a lot. Now, in the sales, they are using lot of electricity to melt for the smelters.
And then also copper is affected. That is something that we expect that the electricity prices is going to be affecting. And also glass manufacturers are affected that we are using in washing machines and refrigerators and ovens as well. So those are the prices that we expect to be a little bit under pressure in terms of increase. But with the other raw materials like cold rolled steel, polystyrene, etcetera, we do not see that high increase in terms of pressure, price pressure.
So, for quarter 4, I have to talk average to average because as I talked, every single raw material is moving in a different way. But in average to average comparison, quarter 4 is going to be very similar to quarter 3 and we expect the same trend to continue in quarter 1 as well. So in 6 months perspective, we do not really expect a huge change in raw material prices, that is the expectation. And we already are leaving Q4 and we have we are starting to discuss for Q1 as well. So we have some information about it.
But after that, starting from quarter 2, we expect a decrease actually, which is going to make 2022 average raw material prices less than 2021 average raw material prices, all in all. Thank you.
The next question is from the line of Demirtas Sissima with Ata Invest.
My question is about the contribution of Hitachi and WERPAOL. Could you further elaborate in details what portion of that was from Hitachi and what portion of that was from Whirlpool? And could you give some color for the rest of the year and for the following year from that business? Yamalvi, just to understand your question better, which part of P and L or balance sheet you're asking about? Is it the step by or profitability or where?
First, from the revenue side. I see some numbers from the footnote, some numbers for Hitachi around $2,000,000,000 something. But I want to understand the revenue contribution in the Q3. That's my question. And if you give some color on the EBITDA side, it will be more than welcome.
And for the following quarters because we were making some estimates based on some rough estimates, euro estimates, euro base. And it's a little bit lower than what I thought. So I want to understand what could be the trend for the following year? Yes. In terms of sales, Hitachi's contribution was around CNY2 1,000,000,000, a little bit over CNY2 1,000,000,000 and Manisa factory was around 750,000,000, a little bit over 750,000,000.
So when we look at the EBITDA, as we have tried to explain, without those without the contributions of those companies, it's 10.4%, with the contribution of those companies, it's 9.8%. We do not I do not have the numbers with me right now 1 by 1, But it's obviously clear that Hitachi and Manista factories are in terms of EBITDA, it is lower, but in total average, it is 6.8% for the acquisition EBITDA. In the coming months, our expectation from those acquisitions or let's say in the coming year, we are expecting some synergies to kick in. So, we expect upside potential in 2022 for the acquisitions that we have made this year. It's really not easy to say because of this volatile raw material issues that we have here living in.
But definitely, we really have been working in these companies right now for 3 months and we see a lot of synergy opportunities, especially in the raw materials and on the supplier side. And also we see a lot of synergies, especially in the ATEC region that we can utilize some of our capabilities and their capabilities. So I can say that it is going to be higher than this year, definitely. In the Epic space, right, U. S.
Dollar, euro or euro base? Sorry, I didn't get the question, sorry. Okay. In euro, U. S.
Dollar base, you mean, right? What is euro or U. S. Dollars? So yes, yes, yes.
The levels you mean like in terms of the size should be based at U. S. Dollar or just the euro? The one that I have explained is 2,750,000,000 or 30,000,000 actually in total. In euro terms, we are talking about for Hitachi, it's around 200 more than €200,000,000 more or less.
And for Manse, it's around 75 €1,000,000 for the 3 months. And as a follow-up, I see there is some minority interest, which is higher in this quarter, around $65,000,000 What is it related to? When we come to the net income, right, like the when we because we subtract that number minority. I see higher number, dollars 65,000,000 in 3rd quarter. And I see a higher EBIT depreciation, by the way.
Could we assume that the depreciation will remain at current levels? Or should we expect some increase in quarterly depreciation for the following quarters?
Gemalade, the minority impact is actually related to the Hitachi acquisition, because there are some minorities in the sub space underneath our JV. So I will provide you more detail after the call for that variance, but it's related to EKEL ship.
And the depreciation side, actually the difference could be related to the acquisitions again, but let us check and get back to you on that one as well. We should be if this is related to the acquisitions, I think we should be expecting this level of depreciation from now on. Okay. Because I see around 4.60,000,000 depreciation for the Q3, and it was BRL380,000,000. So around BRL8 1,000,000 higher depreciation.
So that's why I asked.
The next question is from the line of Filipina Hanzada with JPMorgan.
Beyers, Kami. I have three questions. The first one is regarding the demand outlook. So how do you see the current market trend both in Turkey and in that international market? And maybe, particularly for Turkish market, do you believe that you may be able to process a fixed impact to retail prices without hurting the demand?
And second question is about the cost pressure. I mean, there are many different views around the cost inflation for the investor actually. And I try to understand what type of scenario do you reflect to your cost assumption so that you see a decline on your cost on material growth in the Q4? And recently, there was some sort of news flow regarding the shortage of magnesium, which may impact aluminum. So is this something that could affect your industry?
I think China is supplying the magnesium, so there is some sort of shortage there. And the third question is about your EBITDA margin guidance. You are very close to your guidance at the moment. Do you see any sort of risk in the Q4 for the full year? Because I think 4Q is traditionally a lower quarter from a margin perspective.
Thank you.
I'll start with the demand outlook. We have just started our budgeting process for 2022 and the understanding for 2022 in terms of demand, both for let's say European market and the Turkish market looks alright. We are expecting growth in the European market, that is what I can say. But in Turkey, because of the strong growth and basis of this year, we think that the growth should be limited. I think it should be in terms of units, it should be around low single digits in Turkey.
That is our expectation. And in terms of FX effect in Turkish market, yes, we are really trying to adjust our prices in order to keep our profitability. And is it affecting the demand? Yes, it is. We have started to see that the demand is affected.
That's why we are a little bit, let's say, more cautious about giving a high growth in for next year for the domestic market in terms of units. But in the other markets, we are expecting growth, including Europe, Pakistan, Bangladesh and South Africa, which are our bigger piece market. And also we are expecting some growth in APAC region as well and we are expecting growth in Hitachi side as well. In terms of cost assumption, you talked about the shortage of magnesium, which is affecting aluminum. Yes, we are constantly following up any issue that may come up, let me say.
But right now, we do not see anything high alert situation in any of the raw materials that we are using. It is still manageable and we do not really expect kind of stoppage in production or something like that in the coming quarters because of those shortages in the market. Because it's not only about aluminum, I have to say, We are also experiencing the same in the, for example, electrical steel that we are buying as well. But all of them are still manageable, that's what I can say. On the EBITDA margin guidance side, it is important for you to understand that in the second quarter, we had a sharp decline in EBITDA and our gross profitability.
April was better, but May June, it started declining. We stopped to decline in July August, so it was very flattish to May June, July August. Especially in September, we have been able to increase our gross profitability again with the measures that we have taken in price, in promotions, in mixes, etcetera. So right now, we have changed the, let's say, the direction of the growth acceleration. So we are expecting better margins, especially in October.
And in November December, of course, December is a half month, so the margin is going to decrease. We are counting into that. That's why we think that November October is not going to be harsh as April to August period. So, our expectation is for the quarter to be in line with our expectations and that's why we didn't change the guidance for the year end on EBITDA.
The next question is a follow-up question from the line of Demirtas Semmel with Ata Invest. Please go ahead.
I have 3 more questions. The first one is about the financial expense side. I see the numbers for interest expense, we were expecting a little bit higher. I see that there is a normalization in interest expense side. That's my first question for the following years, assuming what's your assumptions for the interest rate and the potential impact on here.
And normally, I get the numbers from your details. I didn't have that time this time. But did you have any FX gain in this quarter or FX loss? That's related to all financial and FX side. The other question is about the Competition Board investigation.
What was it about? And do you have make any comment on that for what reason it was in the agenda. And the third question was about the tax side. Effective tax rate was 7% in Q3. Could we assume this low effective tax to continue for the 4th quarters?
Thank you and for the following year. Any color? Thank you. All right. I'll answer the question on competition board investigation and I'll hand over to Erskine to answer the other question.
The Competition Board investigation is a general investigation that the Competition Board decided to go and they have been they have according to their claims, they have made the investigation and send us what they have found. And now we are they expected a kind of a defense from us and are trying to understand what our position is and we are trying to explain. We do not think that we are in a position as of today to be able to make a judgment on whether that is going to be an important thing or not. But right now, we are thinking that that is something that we should be able to explain to them, but it will take time because that is a bureaucratic investigation at the end of today. There are some phases that we have to go through.
And whenever we have enough information or something that would really we understand if we understand that there is an impact on our financials, we are going to be sharing with the public.
So I will continue with the interest financial expense side. In Q3, we have a finance expense of around TRY 500,000,000. Actually this is mainly impacted actually it increased compared to the previous quarter because of the Turkish borrowings in our portfolio has increased. As I mentioned, we had some low rate loans in our portfolio where we need to grow and have a higher rate interest loan. And the average is around 17% and most of the interest is fixed rate.
So therefore, we do not expect much increase in next year in the coming years. But due to lower rates renewable with higher rates, we expect around 100 basis points increase for the Turkish lira size of our portfolio. And regarding your question of the FX gain and loss, this quarter, we have a loss of TRY 57 million, but in year to date figures, it's almost 0 FX Again, a lot of we don't have any loss in year to date figures. And why is it so, if you ask? Because our side of exposure affects the side of our aid by our sell side.
In times where we have long exposure, we announced FX change due to swap differentials. This has changed after the acquisition cash out. So our net U. S. Dollar provision turned out to be short and we executed dollar Turkish lira buy side forward steel in order to hedge our provision and this shift ended up with FX loss due to again swap differentials, but this time as a loss in this quarter.
And in the coming months, actually, we do not expect a higher loss, it will be close to breakeven because our U. S. Dollar position is not high in terms of short. So it will be close to breakeven in the coming quarter. For the tax side, as you said, our effective tax rate has come down in last quarter and this quarter as well.
The main reason behind this is the R and D incentives that we have in Turkey and also investment incentives, which increases our deferred tax assets. As we are an investing company, our CapEx is increasing. Therefore, with the perfect asset in relation to that CapEx expansion is also increasing. Coming from the Turkey operations effective tax rate impact, we had a lower effective tax rate in Q3. However, we do not expect a further decrease in the coming quarter.
It will be towards the average rates in year to date figures.
Thank you. And one last question about the Hitachi side. When I look at the details, as you mentioned, you recorded around TRY 2,000,000,000 revenue from Hitachi. And the net income impact was around TRY 122,000,000 as I see from these figures. And I see that the net margin of Hitachi was around 6% in 2nd quarter in 3rd quarter.
And 2 year, it was 7.8%. In that Hitachi, and the EBITDA should be lower, but I understand that there are some other contribution from the Hitachi side, which has higher, that's maybe, you have higher net margin in that business. Could you give some just indication about that for the following quarters? It's a more detailed question maybe, but I see that the net margin is higher for that Hitachi side. Let me give you clearly, Yamase.
Hitachi is a net cash positive company. So they do not have any financial expenses rather they have financial income. So working capital is positive there and also the net cash position is positive there. That is the main reason actually why EBIT between the EBIT margin is around, as you said, it's around 6.2% and the profit after tax is around 6.4%. So it's more or less the same because there's no financial expense basically.
The next question is a follow-up question from the line of Lanka Sashank with Bank of America.
Sorry if you already covered this, but I just wanted to understand what's driving the guidance increase for Turkey revenues? Is it being driven by volumes or is this more pricing driven?
It's mainly price increases that we have because of the Turkish depreciation. We had to adjust the prices and that is affecting the last quarter 3 and quarter 4 revenue to be higher. So that's why we needed to reguide the Turkish domestic market increase in sales.
We do have a follow-up question from the line of Demetra Samal with Aetna Invest. Please go ahead.
And probably, Linky, I see more commercials related to some campaign just organized by Archilicon Beko in local media. Are they also normal within your the plans? Or do we see are we seeing additional promotion activities in the Q4? Thank you. Promotional activities and advertising campaigns, we always do, as you know, we are one of the most active companies in the market.
I do not really we do not have any specific strategy to increase our advertisement spending in the last quarter. But of course, in order to increase the mix, etcetera, they are making some campaigns accordingly and they are trying to make people hear about that. But I don't think that it's a negligible increase if there is an increase that I'm not aware of any specific strategy on increasing the advertisement in Turkey.
We have a follow-up question from the line of Kirikira Hamzadeh with JPMorgan. Please go ahead.
Colaspe, are you questioning about your share buyback program? You already get to around 5% of the capital now, I think, according to my calculation. So what is the room here? Will we continue on this? Or it's now almost completed?
Yes, we are close to 5%, not yet there. We think that still the Arctic valuation as of today is a company with making almost 75% of our of its sales with hot currency mainly or let's say outside Turkey. I think that the hit that we have taken in terms of market share in U. S. Dollar terms is something that we think is not fair and that's why we will keep on continuing the program.
As you know, we have announced that we are going to buy up to 10% and as long as we see this situation, we are going to keep on buying or realizing our share buyback program. That is the intention.
Ladies and gentlemen, there are no further audio
Right. I would like to thank everyone who has participated in the call at this late time in Turkey. Thank you very much. If you have any further questions, please contact our Investor Relations department so that we can help you understand the numbers better. Thanks.
Good evening.
Ladies and gentlemen, the conference is now concluded and you may disconnect your telephone.