Earnings Call: Q2 2020

Jul 17, 2020

Thank you very much, and good day, everyone. Welcome to this call. Together with me today is, as usual, our CFO, Fredrik Nilsson. The agenda you'll find on Page 2. We will cover a short update from myself, business area updates as well and then a bit more details on our financials from Frederik and then some concluding remarks. And as always, we are happy to take questions at the end of this call. With that, turning ourselves into Page 3. Few comments, highlights to the quarter. As you have seen, a weak start to the quarter with April really being, beginning of May, the low point, the low mark in the quarter. But after that, we have seen clear improvements. So May being better than April June being better than May, an improvement in sales or volumes as well as earnings towards the end of the quarter. Within the business, the most significant impact with regards to volume reductions has been within Foodservice, where the sales is going That has been the area with the most significant volume drop. That has been the area with the most significant volume drop. Within chocolate and confectionery fats, there has been more of a across the globe reduced demand over a low Easter sales or really bad Easter sales, limited and airport sales, etcetera, etcetera being lower for with regards to our customer sales. And with that, we do see that our demand towards our customers has really been impacted by that lower consumption. And also on top of that, a destocking effect where our customer had to reduce their stocks. But again, in the quarter, gradually improving volumes also for Schachter and Confectionery facts. On the positive side, we do see our plant based Food Solutions growing again, doubling the business year over year, very nice to see. And we also have a good continued trend for our Special Nutrition business. With regards to our margins, EBIT per kilo has been relatively strong if you compare it to volume, only down year over year 5%, and this is despite volume reduction of 50%. We have had a strong focus on our value added products also through this period. We have taken measures to adopt our cost levels and also very strong execution by our organization with regards to staying safe, acting safe and with that securing business continuity, we have been able to operate through the COVID-nineteen situation with a very few exceptions. And so really for us being a critical part of the food supply chain, there's been a volume reduction basically everywhere. We have not seen a need to close plants or so, but really a slightly or 50% lower volume in general for the business. So with that, fairly good margins still. Page 4, lockdowns and restrictions. We all know that by now. In most countries where we operate, most countries where we sell, there has been versions of lockdowns and restrictions in the world. This has impacted, of course, demand and with that also the earnings that we have in the industries that we serve, with a few exceptions. In response, we have also optimized our cost base to secure short term as well as midterm profitability. But this and this is important, this is without jeopardizing our long term strategic focus. We have no reason today to adjust our strategic direction Health and safety for our employees in our network at work, at home has been in focus. I mentioned before a strong focus within the organization, execution on our continuous plans has really secured that we have been able to operate and supply ingredients to the very important food supply chain. This is very much thanks to our global team's passion, drive and attention to safe procedures. I'd like to take this opportunity to thank the whole organization of AK for achieving that. As communicated earlier in the quarter by in the end of June, we have also initiated measure to optimize our structure on the more mid- to long term horizon. With this, we plan at achieving SEK 150,000,000 in savings and expect it to have full run rate by the second half of twenty twenty one. This is also fully in line with our strategic direction. We are aimed to optimize our bakery, dairy and foodservice businesses as well as continue to make strategic investments in chocolate and confectionery fats, health and nutrition as well as plant based food where we see strong growth trends going forward. Also glad to see that we have closed the acquisition of MPO Margarone LLC in Russia. This is a milestone for AAK. This is the strategic important acquisition giving us opportunity to grow in a very important market in Russia. All in all, AAK is well positioned to take advantage of a market rebound as soon as lockdowns restrictions are lifted. With that, turning into Page 5. Plant based food continued to grow. And also, very importantly, we see a more and more global market penetration with great interest from the get go, I would say, in Europe, North America, but we also see now Latin America coming strong and also in Asia. And an example here given in India, where we are entering into a corporation, a partnership with Good Food Institute in India in order to accelerate research and development as well as promotion of plant based food solutions. I'm also glad that we have a new colleague in the leadership team of AK. Steen Estrrup has joined us, a very experienced Director. He's the President of Asia for AK, and he has joined us already and is already up and running with a strong base out of the Singapore office of AAK, and we are longing for restrictions and lockdowns to be lifted so that we can also travel more, but really happy to have Steen in our team. With that, into Page 6. In an unprecedented or in unprecedented times like this one, the one we are in at the moment with a pandemic ongoing, it is so important to be pragmatic and creative and to really stay connected while we still have to have physical distancing really. And in our organization, we have seen very good creativity in order to secure connectivity with customers, suppliers and also internally. And one of those examples is an initiative started in our North Latin America organization called Apart Together, where we get movie sense from the different parts of the AK organization in an attempt to really feel that we are together, although physically apart, just highlighting one example of the good spirit within AK. On Page 7, a few words on sustainability and sourcing of raw materials. At AAK, sustainability is really close to our hearts. It's a central part of our strategy and a top priority. And we believe in partnerships and strong engagement to drive change. And for a long time, we have worked systematically to achieve improvements. To just exemplify a few things, within West Africa, we source shea kernels, and we have a program that we call Colona Faso. We have now reached over 300,000 members, women, in our women's program, Colenafasu. That is over 30% and over 30% increase compared to last year and show our dedication. And this has also been achieved in spite of challenges to operate and communicate given the current situation. And this is all due to a very passionate and dedicated media coverage with regards to AK and our sourcing of palm oil in Indonesia. The picture painted and how we work do not correctly describe the AK as we know it, and they do not describe the engagement in sustainable sourcing of palm oil that we do apply. Let me assure you that within AAK, we have the ambition to ensure a pond supply chain free from deforestation. We know that there is so much more to do, and we believe that it is extremely this extremely important transformation can only be achieved in close collaboration with governments, industry bodies, suppliers, customers and NGOs. We are a founding member of RSPO, and we have been engaged in improving the palm oil supply chain for a long time. And we are fully committed to do our part also going forward. Finally, on coconut. We are, as you know, a multi oil, a multi raw material using company. Within coconut oil, we have also secured a better supply chain through active on the ground supplier development, and that includes also smallholder programs to develop a coconut oil supply chain that is better than the one we have had. As a multi oil company sourcing several raw materials, we are focusing on improving the supply chain in all aspects, including sustainability, which is a top priority, again, in our strategy going forward. With that, moving into more details on the different business areas of AK. Starting with Food Ingredients on Page 8. Volume was down significantly in the quarter if you compare year over year. Again, the low mark really in April and with lower margin more or less across the board, it meant lower utilization of our plants. This is not due to that we had to close, but this is more due to the general lower demand and with that a reduction by plants. That led to a hit on earnings. But again, EBIT per kilo, our margin was held up in spite of lower margins, really with regards to the measures also taken. The main driver of volume reduction within Food Ingredients was foodservice. I mentioned that before. The volumes were down 50% linked to the sales to restaurants, airline catering, hotels and so forth. But again, for Foodservice, very dramatic drop in the beginning of the quarter, but a gradual improvement towards the end. Plant based food doubled and Special Nutrition performed well, really with infant nutrition being a having a strong performance and predominantly with good sales in China and with new local Chinese customers helping that development. On Page 9, a few words on our chocolate and confectionery fats business, impacted very much by a weak Easter with regards to sales to consumers. And with that, our customer had a weak sales and a follow on, a ripple effect of that is our demand was down. And also on top of that, we have seen clear destocking with our customers or from our customers and that impacted our demand. Volumes did start to gradually pick up towards the end of the quarter within chocolate and confectionery fans. One of the highlights in this business area is that we did manage to improve year over year our operating profit per kilo, our margin. It's up 8% year over year in spite of lower volumes. This is very much thanks to the already implemented supply chain improvements with additional capacity in orders as well as better yielding chi kernels and productivity improvements. So again, showing the capacity and the leverage that we can have in this sector as soon as restrictions are lifted and demand starts coming back more and more. With that, turning into Page 10, Technical Products and Feed. Volume is up, but really volume is up on the lower margin businesses where we have seen volumes being down in our fatty assets business and predominantly within sales to candles and technical products. And with that, that took a hit on earnings in that business area. With those comments on the business areas, I am turning it over to Fredrik Nilsson to give us a bit of an update on the details in our financial figures. Thank you, Johan. Looking into Page 11 and cash flow. We have seen a lower EBITDA with 9% in the quarter, and that is due to the lower operating profit as Johan has just explained. If we dig into a little bit more detail, looking into the working capital, we have an outflow of $262,000,000 to $152,000,000 in the quarter. That is linked to accounts receivables was positive due to lower sales. We have good inventory management that has also given us an inflow during the quarter. However, all the positive thing linked to the receivables and the inventory was offset by lower accounts payables and that was a consequence of lower purchases and also the deferred impact of higher raw material prices. Reported tax cost was very low in the quarter, actually down to 15%. This is not the underlying tax rate you should expect going forward. The earlier guidance is still valid, excluding the income we had as item affecting comparability. It's not that was not taxable. So the underlying tax rate remains still 24% for the full year. Cash flow from investments, €174,000,000 in the quarter and that was mainly related to regular maintenance investments and capacity increases. Let's move to Page 12 and looking into the raw material prices. During the Q1, raw material prices almost returned back to the levels that we saw before the rally in 2019. That should imply that we should get a positive impact in our working capital during the second half of this year. As you maybe recall, there is a time lag of 6 to 9 months until we see the cash flow effect in our from the price volatility in our cash flow. And also another reminder is a 10% change in all our raw material prices will affect working capital with around €350,000,000 just to have that in mind. Looking at Page 13, return on capital employed. It declined down to 13.6 percent in the quarter and that was mainly driven by the decreased operating profit and the impact from higher raw material prices. Looking at Page 14, our net debt. I think it's important to highlight AK has a really strong balance sheet. Equity asset ratio, 47 percent in the quarter. We have a net debt of SEK 3,200,000,000, up around SEK 100,000,000 since year end and net debt divided by EBITDA at SEK 1.14, So really strong balance sheet key figures. Let's move to Page 15. Looking at our loan and the duration profile, we have today 90% of our loans with a duration with more than 12 months. We have 2 sub credit facilities, SEK 8,200,000,000 and we have SEK 6,900,000,000 in committed credit facilities. As you maybe also recall, this is many years ago now, we also have a revolving credit facility of €400,000,000 that will expire in mid June 2021. This has now been extended by additional 12 months, but adjusted to €280,000,000 We have also approved by our Board today 2 new facilities in total of €120,000,000 euros Moving on to Page 16. We saw a negative carousel translation impact in the quarter of $10,000,000 $6,000,000 linked to food ingredients and $4,000,000 related to chocolate and confectionery pads. And also based on the current spot rates, end of June, we should expect a continued negative translation impact going into the Q3. With that, I would like to hand it back to microphone to you, Johan. Thank you, Frederik. And the next page, Page 17, is actually about you, Frederik. My dear wing mate, Frederik, he has decided to pursue new opportunities. And with that, I would like, if I said anything else that I have said with you leaving AK, but I am simultaneously happy for you, a good opportunity. Fredrik will stay with us to the beginning of next year. So that gives us a good time to find a strong successor for Fredrik. But I'll take this opportunity to hand it over to you again, Fredrik, for a few words on that. Thank you, Johan. With the big AK heart I have, it has not been an easy decision to leave AK for new opportunities. And to be honest, I will say it's one of the most difficult decisions in my professional career. I have to go back. My career started here in AK back in 2007 and it has been an amazing and exciting journey all the way and I'm extremely proud of being a small part of the AK history. As Johan said, I will be here close the year, and I'm also really looking forward to delivering the strongest possible second half of twenty twenty. At the same time, it's also with great confidence and pleasure that we'll join Trelleborg during the Q1 2021. Thank you, Frederic, and we'll come back to say goodbye to you. But with that, the process to find a new successor has started today. Concluding remarks from myself. We do offer plant based, healthy, high value adding oils and fat solutions based on our co development approach. Of course, in the short to midterm, we see the corona pandemic, obviously, increasing uncertainty. But there is no reason for us to adjust our view on the strong favorable underlying long term trends in our market. And therefore, we do remain prudently optimistic about the future. We've seen a drop in volume. We've seen corona impacting many, many industries, and so it has with ours. But we've also seen in the quarter a gradual improvement sequentially with April being the lower mark in the quarter. So with that, again, prudently optimistic about the future, strong underlying trends on the more mid- to long term basis. Thank you so much for listening. We are happy to take questions from now and forward. We do have some questions in the queue already. So we begin with Alexander Jones from Bank of America. You have the floor. Thank you very much and good afternoon to both of you. Two questions, if I may. The first one, you've talked about sequential improvement through the quarter. Could you perhaps give an indication of the exit rate that you've seen in segments like Foodservice or in Chocolate to get a sense of how things stack up into the 3rd quarter? And then the second question is on the chocolate segment. You talked again about destocking having been an impact as well as the weaker end market in general. Is it possible to quantify that relative to the weaker end market in terms of the sales decline you've seen this quarter? Thank you. Thank you. Starting with the trend, as we said sequentially. So obviously, there is a lot of uncertainty still. But there is nothing in July so far that is showing any other trend line than that we are continuing. And to be a bit more specific, as you asked, Foodservice. Yes, Foodservice was, of course, very a dramatic drop as lockdown hits early on, but we were also very fast in our foodservice organization to adopt to apply following and now adjusting to the new reality with that demand. And as soon as we saw societies opening up a little bit, we also see immediately a pickup in demand. Of course, also in this sector, there must have been destocking as several restaurants closed and so forth, and there has been a bit of filling the pipeline. But from an index point of view, clearly, we see that we are on a week by week gradual improvement within Foodservice, but still obviously with significantly lower level compared to before corona since there is still clear restrictions out there still in the world. With regards to CCF, less of a V U shaped pickup, but still gradual improvement. And I cannot give you the specific details because this is based on what we know from our customers, but we do not get a specific range about how much was destocking, how much was demand. But if you look at the underlying development in the shocker and confectionery market and then apply them destocking a bit, then you see where we sit. So clearly, when destocking is lifted and we go back to a normal demand, there will be an additional gradual improvement, I hope to see. But less of a sharp improvement, but still a gradual improvement in CCF from the beginning of the quarter towards the end. I do believe that there is still some destocking to do after a bad Easter and after generally lower volumes. But after that, we should see a gradual pickup as soon as restrictions are lifted. Great. Thank you. Thank you. Next, we have a question from Kenneth Towle from Carnegie. Please proceed. Yes. Thank you. A short one. Can you explain where the positive result in EBIT came from your changes in finances? And also why those changes did not end up in the financial net and on the EBIT line of side? Absolutely. Hi, Kennen. Frederic? Absolutely. It was linked to internal optimization and it was linked to old FX variances in equity that we had to release due to that we changed in the legal structure. That was the reason. As it was FX, you need to report them as another income. Okay. So it was more sort of internal structure rather than refinancing? Absolutely. It has nothing to do with the refinancing. This was just pure optimizing our own structure. Turning every stone, looking into the restructuring program, looking at the opportunities. And this one came up as something we needed to do and wanted to do. Next, we have a question from Andreas Bok from Quayle Global. Please proceed. Thank you. Andreas Boehrer, Fund Manager at Quail Global. I have a question regarding ESG. And I'm just trying to make money for my investors. And the thing is that, that whole Expressen article on palm oil, it really put a negative feeling around the stock and has affected the share price. And I really appreciated your comments earlier today about how you view palm oil. But I have a question. Could you please just, on that article, could you just state publicly here on the conference call for everyone to hear that you actually that article wasn't relevant because you actually don't have production in that area at all? And secondly, could you just please give us something more tangible about how what can we expect in the next 12 to 24 months from you when it comes to this whole palm oil certification? Thank you so much. Thank you. So first of all, that was, as you mentioned, that was a statements made by an evening tabloid in Sweden. We source from suppliers in Southeast Asia in several countries, and we are working diligently to secure our supply chain. And whenever we get any information and or statements alluding to something, we always take that into account. We're always happy to engage further. And in this specific case, we made an investigation. And today, we have not found anything confirming that AAK would have been acting in the way it was at least described and painted, call it, in this article. We have been, for a long time, very active, as I mentioned before, to transform the palm oil supply chain. We are one part of it. We are sourcing from our suppliers who in turn are refining oil and they are buying from crushing companies if they don't have them themselves, and then they in turn are buying from Plantation. So this is a long chain that we have to master together in order to make improvements happen. And that's where we are still dedicated to continue to drive change, to monitor and to work with our suppliers to really make a change happen. But with regards to one of the most important things here is really to get deforestation to stop. I think still the debate is a bit twisted with regards to palm oil, whether palm oil is good or not. Palm oil is really an important ingredient for the world, feeding the world, one of the most efficient ones. So we really have to get the dialogue about how we get deforestation to stop. And that needs to be in coordination with government bodies, with industry bodies, suppliers, customers as well as NGOs. Excellent answer. Thank you so much, sir. Our next question will go to Pashtarinam from BNP Paribas. Please go ahead. Hi. I have a few questions. I'll go 1 by 1. First of all, could you update us on the emerging markets, please? I think you flagged India, for example, being a challenge. I think you have big exposure in India, Mexico, Brazil and Turkey in particular. Could you update us on each market? Yes. Thank you. I will yes, it goes without saying that although on an overall level, we can say that it's been versions of lockdowns and measures taken by governments. But really, India was difficult in the quarter because the way they did the lockdown made it actually impossible for us to operate for a while. And we see that as one of the countries where that could still happen, so uncertainty about the way they do restrictions and lockdowns. We finally managed to get approval for being a critical ingredient in the food supply chain as well as getting our employees into the plant and being able to operate. But clearly, that was a bit of a challenge in the quarter. And that could still be in the future. But again, we are part of the critical food supply So one way or the other, we get through, but it can be more difficult in this case, in India. We are operating in Brazil, Turkey and China as well, as you mentioned. China was early on, as we all know. We have been able to act safe to keep on operating. So business continuity has been really strong execution by our China team. So China as a country on demand has come back, but not to the level it was before. So it's still more to give in a general demand sense, but from an internal point of view, still operating well and maintaining business continuity. In Turkey, we have had the impact really on our we do sell and have a business that goes through to many, many, many thousands of artisanal bakeries and call that type of foodservice business that, of course, will sit as well. And that is something that is expected to improve as also restrictions are lifted there. And then coming into Brazil and Southern Latin America, I think we have all seen in the news the difficulties and the way it's spreading at the moment. We have again been able to operate safe. We have it under control internally. But with regards to demand, that is, of course, impacted quite a bit due to restrictions and lockdown. But I think we should expect the same pattern as they are lifted, the demand for our products are also coming with it. So in the short term, very uncertain and volatile, but in the mid- to long term, still pretty optimistic about these regions as well and countries. And then the next question on CCF. I think last quarter you had talked about down trading by some customers. When you look at the volumes that you do have in this segment, do you see that the high end is suffering? Is there a trading down still happening? Yes. It's been in the results that you see that is included in the quarter already. And that is likely to continue for some time, but not a long time. That's not what we forecast. But that has been part of the result in the quarter, yes. And the final yes, thank you. And then as a final question, we hear from other ingredients companies that innovation activity is slowing. Do you find that co development activity is slowing for you as well? And I wonder, given your long development time, if this could be a headwind on mix with a bit of a lag? Well, very relevant question. And of course, I think we all feel that some activities are difficult to maintain. So there has been certainly a change of the way we do things, but we have managed to continue some co development activities and academies where we have been able to do things virtually and even sending samples via post and having a virtual camera setting in a lab, etcetera, etcetera. So again, we show our agility, our creativity to make things happen. But if you simple answer to is it slower, yes, a bit slower, but it's certainly not dying. And going forward, I think in the short to midterm, as we cannot travel, as we cannot meet as we did before, yes, it will be more difficult. But at the same time, I see that the underlying trends still call for later on at least accelerated activities and reformulations and so forth. Our next question comes from Oskar Lindstrom from Janssen Bank. Please proceed. Hi, thank you. I have a couple of questions. I'll take them in turn, please. The first one, in the PowerPoint presentation now, you have a comment on Page 4, where you say that you guide for a significant drop in demand for foodservice and other non food segments in the coming quarters and that this will have a material impact on earnings. I don't find at least not this exact comment in the report. I mean, you do mention sort of further disruptions from lockdowns. So in light of this, what do you mean by material impact? And how should we see H2 volumes in light of this? And is this irrespective of sort of lockdowns ending during H2? Or I'm a little bit sort of interested in this comment. Can you repeat it? And where did you say you saw that, Page 4? This is on Page 4, update on the coronavirus situation, the section business impact, the second to last bullet, if you will, or drop in So I think, Oscar, you're having the right presentation. You're not having a Q1 presentation in front of you. Maybe I've gotten the wrong that probably explains it. Well, thank you. I was a little bit worried there all of a sudden. Yes. No, but you clearly saw in Q2 that that happened. Yes. Good. No, I was just wondering that you're sort of warning for this for H2 as well. No. Okay, fine. Let's leave that behind. I have a second question around the sort of turnaround in infant nutrition, which you mentioned here with new local clients in China, etcetera. Is this segment now sort of back on track after the weakness last year? And have you been forced to make any changes to your offer or business there in China? Thank you. Well, not really. We have had always a strong position in China, but we know that the infant formula business was down predominantly linked to lower birth rates. But we also have good business opportunity. We have had good business opportunities in pipeline and a few innovations and new product offerings in the higher range of the high value added solutions. So call it that, we stabilized it, and we are now growing from that new level and in a stable pace. And through corona, we have seen no impact really on demand. If anything, slightly positive and with a good traction in China. Absolutely. We have also got in some new local Chinese customers here during the last quarters as well. So it's not a situation where you've sort of simplified and reduced the price of your products or made any such changes? No, no. Okay. And my final question, which I hope is also relevant. I mean, the CCF performance in Russia and Emerging Markets in the Q2 in light of not only corona, but also weaker currencies. Sort of how has that impacted your business? Is that fully in the second quarter? And then do you foresee sort of having to raise prices locally? What kind of effect should we expect there? The effect that we have seen, and it is in the quarter, we Eastern Europe and Russia, predominantly an important market. Yes, that's a market where it's strong for us. It's we forecast to be strong going forward in a more mid- to long term perspective, and that's why we made an acquisition into Russia as well, clearly, with the ambition to continue to grow there. But that is one of the countries and the region, if we take Eastern Europe into it, where you do see some down trading. There was a question before there from Heidi. Yes, that is in the quarter already and has been an impact. That is probably the most important impact. And then the other things that you mentioned are also included in the quarter, but not as significant to the overall results. All right. Thank you. So it's CECF, call it 3 dynamics, a bit of down trading, a bit of general volume reduction, but also our own cost improvements from the implementations we have made. And that's why I also see a margin improvement within that. All right. Thank you. Those were my two questions. Sorry. Thank you. You're welcome. Next question comes from Stefan from Millennium Capital. Please go ahead. Good morning. Thanks for taking my questions. Good afternoon actually. Just 2 for me on the Chocolate division, just shorter term and longer term. Do you see I mean, Barrick Harbour reported results here and then they downgraded somehow their long term algorithm taking 20 20 off a lower base and telling us that volumes would grow off a lower base in chocolate. Do you also see the longer term prospect slightly affected here in chocolate due to the lower demand? And second, you mentioned the Easter impact in Q2. Would it be fair to assume that we're going to see also a weaker Christmas season this year and that the negative effect would come on top of the destocking in chocolate and confectionery? Very relevant, of course, in a situation like this. We don't I don't have all the answers to that, but I'll still answer your question, what I believe. Yes, is it likely that we will be completely in a new normal or normal situation by Christmas? I think that is something that I don't believe. I don't believe we will be completely back to normal anywhere in the world. So does that then have an impact on Christmas? That I don't know. Could be. But could be that we have now find ways to shop what we need and to create a great Christmas and maybe more online shopping for gifts and so forth. Let's see how the our industry here is really developing. But our sales is really going to the production of chocolate. So what we need to see here is the trends really from the consumption of chocolate and with that, our customers' sales, whether we see an additional impact with regards to Christmas. But clearly, we had this pandemic came right over Easter, and I can easily understand how that was impacted. Then with regards to you mentioned 1 player in the industry, we certainly have we are supplying most of the players in the shocker and cofectionery industry. So we our demand follow very much the dynamics in the industry then with the caveat of our different value propositions and products, of course. But so we have one indicator there, but and that is included in our total customer base, but we need to see the whole development for the whole sector in order to draw better and more precise conclusions. I do expect demand to be gradually improving as restrictions are lifted, call that from a new base in Q2 and forward. Thank you. Can I ask a follow-up question on the infant nutrition business here? Reading some of your quarterly comments and already a trend we've seen for a few quarters of like local Chinese different if we see market share shifts in infant formula in China, how does that affect your EBIT per kilo in that region? Thank you. Thank you. Not a major shift. We the price level or margins is quite the same, but it's more showing how we are relevant and how we are able to follow our customers, both the multinational, international customers as well as the local ones. There are no further questions at this time. I would like to invite the speakers to deliver their closing remarks. Thank you very much, everyone, for listening. An unprecedented situation, a very challenging to some extent quarter, strong focus on staying safe, being able to secure business continuity, well executed by the organization's measures taken, cost adjustments in place, more long term, medium term actions also announced, and we have seen a gradual improvement through the quarter. With the restrictions lifted and if they are and if they continue, we do see that as a positive to a continued sequential improvement. Thank you very much for listening.