Earnings Call: Q2 2021

Jul 20, 2021

Good morning, and warm welcome to Bonnava's presentation of the Q2 2021. Speaking is Carolina Stramlid, Head of Investor Relations. And with me today, I have our CEO, Peter Wallin and CFO, Lars Grand Leuv. We will follow the usual procedure and start with the presentation of the highlights and financial results, followed by a Q and A session where you're able to ask questions if you participate in the telephone conference. I would also like to mention that presentation is recorded and an on demand version will be available on our website. With this, I hand over the word to Peter Berlin. Good morning everyone and very welcome to our conference here. And I would like to Start with giving you a view of the market conditions. The very good fundamentals and strong market is continuing. So we are seeing a very high demand and possibility to increase prices across all of our markets. We are seeing a tendency in some markets that the growth rate of prices has abated somewhat but are still at a very good level. Another thing we are seeing is also during the pandemic The trend to prioritize the housing situation moving to larger housing and also with the Possibilities to go out in green areas has continued to strengthen. And this Something which benefits the happy neighborhoods that we are providing. The fundamentals in terms of macro And with low interest rates, low unemployment and a good growth in the economy And also very strong positive sentiment for companies and households is continuing. So this underpins the new production and starts. And we see this both on the And we see this both on the short term and on the long term for the housing market. Turning into the profitability. The net sales decreased by 4% due to the lower recognized volume of investor units compared to last year. If we look on the number of units you can see that they dropped by The whole 21%. So that means that we have a higher price per unit, also the fact that we are selling more consumer units with good margins. We significantly strengthened the EBIT and margin And this is also due to the fact that we have more consumer units recognized and also we're able to increase prices and also contain cost. So that meant that the gross margin strengthened across in all segments. In the Q2 as announced in May when we announced the decision to wind down the business in Denmark and Copenhagen we took SEK 117,000,000 as an items affecting comparability relating to the wind down. So of course the comparison with Q2 last year which was fully impacted by the pandemic is a little bit skewed. But I think that this report clearly indicates a step in the right direction. Looking into the sales development, we have increased the number of starts. We have also increased the number of sold units and those 2 are linked together as you can see. And if you look to the rolling 12 month level, they are both overshooting last full year. Also comparing to last year, we had a very Skewed Q4 with a lot of starts into the Q4. So that was a quite low start in 2020. Another point I would like to make is if you look on the recognized unit you can see that the number was quite below last year, but the consumer part was much stronger. And this again is coming back to the stronger impact on the P and L. And Lars will comment much more details of this. The outlook that we have and the guidance we're giving is still at the 5% mark if we adjust for the close down of Denmark that we announced after the Q1. So this should be based on the base of close to 5,400 units 2020 excluding the Danish units. I would also like to present 2 of projects we started in the Q2. If we start on the left hand side, we started a project in the Manta district which is very close to the Port and also close to the city center. And it's also very close to green areas as we talked about. And it's actually A rated in efficiency, energy efficiency. Turning to the right hand side, we started up a project in Umea in the Northern University City in northern part of Sweden where it's also very high on the agenda in terms of sustainability. And in this area we are developing and are looking into developing more units as time goes by. Then turning into the external factors that we have playing around. If we start with the pandemic, still the health and With staff, customers and projects is the key priority for us. And of course we are keeping a very Strong eye on the development of the spreading of this delta virus as we are seeing. So far we have very limited disturbances on our operations from the pandemic and also the implication that this has given on the supply chain. Looking a little bit closer to the supply chain, we are seeing a lot of cost increases of course And this is offset by the very strong growth in sales prices which means we can start project with sufficient margins. And of course if We experienced shortages of material and resource. This may impact margins and handovers and starts timing wise. But this is something so far which have been able to manage. We are focused on optimizing the purchase and flows Our projects and as a company which overstretch in a large number of markets, we have the ability to drive larger volumes and also tackle shortages in the group. So this is something which we are doing as efficient as we can. I would also like to point out that the situation with production of cement in Sweden which has raised on the alert side is something that would have an impact on our Swedish operations. So this is of course a very Big impact for Swedish construction industry and Swedish economy as a whole if this situation is not resolved. From a Bonnava Group point of view it's a very limited impact because it's only the Swedish operation that would be impacted if this crisis should be coming to fruition. Then I would also like to comment the floods That we have seen and experienced in Germany. The footage we have seen in the media is very disturbing and alarming And our heart and thoughts go out to the people that has been impacted by the flooding. I can happily report that We have not heard any of our employees being involved or hurt in any of the floods. And the closest projects we have to the flooded areas are in Cologne in the western part of Germany, 15 kilometers From the flooding. And some project has been impacted by heavy rain, but not any flooding. So the project has not gone through any major disturbances. As a company of course we are caring for the local communities and we are looking into how we can support the local communities when the flooding has subsided. Then I would also like to point out and come to the project starts. This is The engine of our business and we are committed and fully focused on increasing the number of homes to the market in a demand situation which far out stretches that of supply. And we need to make sure that we have the production and everything in control before we start the project. This comes to both the project, the pricing and also the costs. And we are not starting any project just to report a high number of starts. We are only doing it when we can secure the basics. We have increased the number of Starts in the period and I'm very pleased to see the work that the operation has done on that part. Secondly, I would like to comment that we are committed and fully focused on increasing profitability. The strategic review that we announced in the Q1 is ongoing. We announced the first Step exit the Danish operations and this is going according to plan. I'm also very happy to report that We have started a structured process of selling the land bank. This is done with a large interest in our assets and we were hoping to conclude this during the second half. The outcome of the strategic review will be communicated during the Q4. Thirdly, the sustainable business part is very important to us. And under the Q2, we expanded the green financing, which enables us to finance long term the sustainable housing that we are providing to society. Also And perhaps most importantly in our type of business it is securing an attractive portfolio building rights. And this is something which we are looking towards increasing with the sustainability and profitability as key focus in in most of our markets. With that, I would like to hand over the word to Lars Grondlove, our CFO. Thank you, Peter. Good morning, everyone. I think we start, as we have done the last few quarters, We had the buildup of net sales. As reported in our Q1 report, we were estimating completions Of about 8.30 units, 140 of them in the investor area and 6.90 in the consumer area for the Q2. We have hit the SEK140 1,000,000 in the investor area. And here you see that out of the SEK 8.30 Or 6 90 B2C, the customer area. 21 units were for different reasons postponed and transfer completions to later on. Out of the NOK809 that we completed then, NOK 38 Remain unsold by the end of the quarter. But on the other hand, we continue to decrease completed unsold from previous periods, And this time with EUR 121,000,000. So significant further reduction of these units in the balance sheet. And in addition to that, as we were reporting and mentioning in the Q1, we had a number of units that were sold completed, but for various Reasons not recognized because we have not finalized all the registrations, etcetera. So 151 of those were completed and added to adding to net sales for the Q2. So looking at the quarter and the figures year to date. Again, Peter mentioned that last year, Q2 was the Q1 where the pandemic really hit the business not only in Bonnava but the whole society. So it was not a very strong quarter as we know. But in if we look at net sales, we had more units recognized in the prior year, but this year with much more profitability. We had a mix So project where we were handing over and recognizing a number of not very profitable projects. In addition to that, of course, we had a mix of very much of investor projects typically at lower margins than the consumer project at that point in time. So that means that our gross margin for the 2nd quarter is almost doubled the gross margin in prior year, almost 14% compared to just above 7% in Q2 last year. And if we add then the selling and administrative Bences slightly higher than last year. Last year, of course, then everything was locked down, closed down. This year, we have some more spending, But not significantly higher, which you can also see on the year to date figures where we are practically spot on the level as we had in the prior year. So with that, we are delivering an EBIT of SEK 257,000,000 before these items affecting Comparability, I'll come back to that. With that margin, we have increased our EBIT margin with 6 percentage unit, up to 7.6% in this quarter. But as Peter mentioned and as we have reported by the end of May, we have decided to To close down, wind down our business in Denmark, and we have taken a charge down here in the Q2 of SEK 117,000,000. So after that, EBIT is SEK 140,000,000 still significantly above what we were recording and reporting in the prior year. If we look at net financial items, they have increased. And we have been presenting that before. We have Prolonged. We have longer financing now to reduce the financing risk, and that is, of course, increasing the interest rate. But it is also outlined in the report that we have an ownership by NCC in Germany, where we have an option to buy that ownership. And we are paying about SEK 3,000,000 per quarter for that and that has been added then to the net financials. And then you see that our tax percent It's low compared to what it used to be. And part of that is, of course, coming from the tax credit that the items affecting comparability is Great. So let's move into the segments. And as you saw in the heading in the prior slide. We have improved margins in all the segments, and we see that in the coming slides. And if we start then with Germany, We have a mix that has improved project and region mix compared to the prior year. And as you see here in the diagram in the graph on the right hand side, we had a significant portion, 60% of what was recognized Last year was coming from the investor segment at a lower margin. So a big improvement compared to the prior year. We also see that our selling and administrative expenses is slightly higher in the quarter but better than the prior year year to date figures. So we are delivering close to 13% EBIT margin compared to less than 4% EBIT margin in the prior year in Germany. And then looking at sold and started units. We see in Germany, as Peter also Blaine that all our markets, we have a strong demand and a very good sales development, and it goes, of course, for Germany as well. We have still prices on high levels. They are increasing, but the pace of increase is slightly lower than we have seen in the past. We are we have been selling, of course, on the consumer side so far, less on the investor side in Germany. And we have started twice as many units in the Cosomnjeire in Germany than we did in the prior year. Going to Sweden. Here we see more handovers to customers, as you can see from diagram here, At less investor deals than in the prior year. And we see improved margin from the mix and from the projects that we have handed over in the period in the quarter. Selling and administrative expenses in line with the prior year means We then have increased our EBIT margin to above 9% in the quarter compared to 6.6% in the prior year. And looking at the market, I would say that it's a carbon copy of the situation, Strong demand, good very good sales development. Also here, we see high price levels and the increased The pace of the increase is coming down slightly now compared to what we have seen in the past. And you see that sales is good in the consumer area, but we have not sold anything In the investor area, but we'll come back to that in the bullet further down here. So we have not added that in the quarter. But in terms of starts, we have increased the number of starts, and that is coming from the consumer area. And There is a high interest in the investor areas as well. We have then conclude 2 deals in the 2nd Quarter in Umea, the project that Peter showed you and also in Solentona suburbs to Stockholm. And after the end of the quarter, we also concluded 1 in Vasteras. The Nordic segment, they have a quarter with Very low volumes, as you can see, in terms of recognized units. Only 1 22 units recognized in the quarter. No investor deals, just on the consumer side. And that, of course, then brings a low net sales figure. But with less of investor deals handed over in the quarter, we can see an improved gross margin even though on the still on the low level. We are building some selling and administrative expenses here. And this is Mainly due to that now when we are winding down Denmark, we are then addressing Norway And as a stand alone market not being assisted and serviced by Denmark. So we are building that organization as an investment for the future. EBIT still on the negative side even though it has reduced the negative amount And then we coming to the SEK 117,000,000 in items affecting comparability as we're talking about early on is the Winding down with Denmark. And it's relating to warranties, it's relating to staff and it's relating to the remaining organization that we see here. Nevertheless, also here, we see strong demand and sales development with increased Prices in all of our markets. You see that we are strong in terms of sales on the consumer side, a bit weaker on the investor side compared to the prior year. But we have closed and Solen started 1 in Turku in Finland in the period. And we are starting more consumer units, 100 units more in total. But if you're just looking at the Consumer units, EUR 150,000,000 more than we had in the prior year. And here as in the other business units, we are adding land positions in Finland, in particular in Tampere and in the Capital Area. And Then to our 4th segment, St. Petersburg, Baltics. It's good yet another very good quarter in terms of recognized units Increasing again over the prior year, adding net sales with good profitability, almost 90% gross margin in the quarter, up more than 1 percentage point compared to the prior year. Selling and administrative expenses in line with the prior year, and that is, of course, then bringing an EBIT margin of 13.6%, which is almost 3 percentage point above the prior year. High demand and price increases we can see in all of our markets, St. Petersburg and the 3 Baltic countries. We see strong sales development as you see here, more than 500 consumer units sold compared to 135 in the prior year. And in particular, we see a contribution from Latvia in this period. We also see Increased starts. In the prior year, we didn't start anything at all in this business unit. Now we started 266 units in the Q2. We have also made a land acquisition of about 1,000 building rights in Bilnias, Lithuania, which is our newly added market in the Baltics that we started up just a year ago. If we move from our business unit, our segments and move over to the balance sheet, We continue to see a strong, very strong financial position. If you're looking at our equity to assets ratio, we are above the 31% level. And you know that our target is above 30%. So Building on that. And talking about the building rights, which is, of course, a very significant part of our balance sheet. Here you can See, the development from end of last year, where we had almost 32,000 units, has Now increased almost 34,000 units over this first half of the year. Despite the fact that Germany right now is decreasing the figures due to that they are starting a lot of projects And units and then are utilizing. But we're looking for opportunities to add more billing rights in Germany, of course, going forward. Sweden, a slight increase. We have a slight drop in the Nordic area, but we continue to look for more there and a very strong increase in the Baltics and St. Petersburg. Looking at the return on capital employed. Our capital employed is still at a rather low level, about SEK 12,500,000,000 So with a good profitability and a low capital employed, we have actually now reached a 10% level, which is the lower level, of course, of our range that we are targeting in terms of financial objectives. And moving over to cash flow. Yet another quarter of strong cash flow Despite the fact that we are continuously investing for the future in investing in new housing projects, and that will, of course, So continue going forward because that is what is building our future business. But we still managed to deliver a strong cash flow. And we have the capacity. In addition to a strong cash flow generation, we have the financing capacity from our facilities. By the end of this quarter, we have SEK 3,600,000,000 in unutilized credit facilities, and we are still on a low level in terms of net debt despite the fact that we have been growing our housing project balance quite significantly. And also I would like to mention that Peter Pointed out that we have actually increased our green bond loan by tap issue in the quarter and we have also refinanced other green facilities within the green financing net framework. Moving over to the graphs then that we have in our report Updated now for yet another period. And here, we have also included Q2 and the delta that I Showed you in early picture. We see a gradual movement of Slight delays, I would say, moving to the next quarter. And this is, of course, a situation where we are a bit uncertain about the building rights, the building permits, etcetera, in particular in Germany. But we are, of Of course, working hard in order to hand over and complete our projects as soon as possible. And in the consumer area, we have added, as you see here, 1100 units in the quarter, adding to completions going forward. And if we're looking at the investor area, we can see that we actually have moved one project Earlier that we now think that we will be completing already in Q3 instead of later on. And here we have added some 2 40 units compared to where we were in the previous report. So That's the end of my presentation. So I hand the word over back to you, Peter. Clear and sharp. Thank you very much, Lars. So rounding off this presentation, strong market, very strong underlying drivers for our business. We have improved the profitability considerably in the Q2 and the whole organization is with the high activity to secure the handovers and project starts also going forward. The wind over Denmark is the first Steppen, ongoing strategic review and this is to be finalized in the Q4. And overall, it's a good foundation for continued improved performance. And with that, I hand over to you, Carolina. Thank you, Peter and Lars for a good presentation. We will now open up for questions. So operator, please go ahead. Thank you. Our first question comes from the line of Stephen Edison from SEB. Please go ahead. Your line is open. Thank you, and good morning. A couple of questions from me. First, just to Double check a little bit of 2 things. When it comes to the guidance on starts, the 5%, In the report, you mentioned 5,300 something. That is the number you have there, I guess, that is last year, Excluding Denmark. So we don't have to do any adjustments to that number just to double check. That's to double check. That's hello, Stefan. That's correct. Including Denmark the number is 5,710, 5,346 excluding Denmark. That is the base, yes. Perfect. And then when it comes to the divestments of the land bank, as you talked about 2nd half. I guess you were talking about Denmark there. What kind of could you give an indication on How much land do you own there so we can understand if it's going to be a big number or a small number in profits from that? It's a rather small number. We have more or less 4 different plots with building rights in Copenhagen, very attractive plots. And so it will give an impact On the P and L, but it's not a material impact. Okay. That's good. So I understand roughly how big it could be. When it comes to the you mentioned it, and I fully understand it's difficult, but to I have an overview, but see if you can help out slightly at least with the price increase on material that you see now. You said that The price hikes we've seen in the markets fully cover that. But could you maybe are we talking that price hikes The cost inflation being 50% of the price hikes or 25% or is it 75% I mean What kind of impact do you have on your cost really on apartments? You can use whatever reference you want, but just to understand roughly how big the impact is on your cost line? It's hard to give you a number We have so many markets and so many proposition of projects. So it's hard to give you a number. But so that is why we have given Frans, relating to the sales prices, the price increases on the sales prices has been actually a bit more Then the cost increases. So that's the indication that we gave. And also of course since the revenues is higher than the costs So you will get a cushion there from the price increases. So this is something which we have full focus on. And also as I talked about The fact that we have frame agreements and long multi year agreements also means that the implications is gradually over time. So it doesn't come from sort of from one day to another. So we are of course On top of this situation and we are trying to mitigate the implications because The big strain could be on the smaller subcontractors that we are hiring. They could have a hard Time managing the situation. So we are supporting our supply chain, trying to make the disturbances as small as possible for the projects. Thank you. Then looking at the building rights, how do you see the prices Developing there, sometimes when the end market is moving quite a lot and there's big demand, then those prices start moving as well, but that's not always the case. So how do you see that in different regions? You're absolutely right that the increasing of prices is also creating a communicating source To the cost increases of building rights. And I'm sort of we are Still seeing opportunities to buy because there are some stickiness. And also we have building systems and platform systems which means that We are in full control over the production cost, which also means that we can turn the even an increase The cost of the building rights into a sufficient margins for us to start the projects. Okay. All good. I think that the last question would possibly be if you see I mean, evidently, it's a big demand, but it's also quite your competitors A little bit forward leaning as well. Are you seeing any smaller area, how do you say Local areas where there is a little bit too much coming out at the moment or is it the big demand all over? Generally the demand far outstrips the supply. So I would say that is not The case in any markets or segments we're in right now. That is something which of course we will Could happen from time to time, but for now this is that is not the case. That's all for me. If I can add on one thing. I was looking at Sweden there with the start. And I mean, are you happy with the Pipeline that you see now going into second half to when it comes to starts, I guess you want them up a little bit in well, all really, but Particularly Sweden. So just wondering if you're pleased with the planning process and so on going on in that week. You can I'm balancedly pleased when it comes to Sweden because as you know in Sweden we have a very long planning horizon And that sometimes can sort of kick a couple of quarters back when it comes to production So it's always an adventure at times. But I would say I'm sort of I'm pleased with the situation and the That we have in Sweden and I would hope that we are able to increase the starts going forward. But then again, we are not starting just to produce a high number. We are starting when we have full control over production and we can start the project. Thank you. That was all from me. Thank you. Our next question comes from the line of Jarek Grenfell from Carnegie. Please go ahead. Your line Okay. Thank you very much. Good morning. I had a few follow-up questions. Starting off with your Ability to start for the second half. I mean, obviously, you need to ramp up number of starts significantly in the second half versus the first half in order to reach Your target, could you say something about where and what regions do you see the best potential in terms of planning for new starts the coming 6 months? Hello, Erik. We are seeing that pretty much across the board, but given the importance of Germany, Yes, especially Germany. Okay. Fair enough. And then also perhaps A bit of a detailed question. The option plan that you have in Germany in relation to NCC's holdings there, you mentioned that you will be paying About SEK 13,000,000 per year. Is that something that we should expect to be ongoing? Or should we expect you to use that option, which would then change the situation? Or how should we view that financial item? Erik Lars here. Yes. We are in discussion with NCC about that. But for the time being, I would argue that you should add that To the financial net and we come back to it when we have sorted out situation with NCC. Okay. But the idea is basically that if you use the option and acquire their part, then you would We remove any payments to NCC. That's the way it's structured. Absolutely. It's an option for us To buy their share in our business that had remained there since the foundation of Bonnava in 2016. Yes. Okay. And then my final question relates to number of units sold in Sweden in Q2. Starts was obviously up quite significantly, units sold slightly lower than previous quarters, if I'm not mistaken. How do you see sort of the situation for you to sell units in Sweden? Is this A situation where you simply don't have enough to sell and you need to get this number of starts up? Or is there a discrepancy between sort of the demand and Your ability to start? No, you're completely right. Starts and sales are completely hand in hand in this matter. So When we start the project we will also be able to report and turn the sales in. So it's not a situation where the demand It's imbalanced. So starts will lead to higher sales. Okay. Thank you very much. Those were my questions. Thank you. Our next question comes From the line of Victor Karger from ABG. Please go ahead. Your line is open. Hello. Just a quick follow-up question Regarding the Nordics, you said that Norway will become an independent market within Well, you really specified the time for that, but my question is what will happen to Finland? Will that also be an independent market And separate from Norway and Sweden? Yeah. When we talk about independent, We are talking about business units being the operative segment. So Sweden is a business unit. Finland is a business unit and Denmark Norway was a combined business unit. So Lars was Referring to the fact that when we are now exiting Denmark, Norway will be a standalone business unit. So we have lumped Actually 2 business units together which are now consisting of a startup of Norway and then a continuation of business unit Finland. And once we are dealing with the full year of 2021 We will take a closer look on how to report the numbers going forward for Finland and Norway respectively. And this of course will also be on the back The conclusions we made of the strategic review. Understood. Thank you. Thank you. Our next question comes from the line of Johan Okay. Kepler Cheuvreux, Jan Ilfeux. Okay. Good morning, everyone. I actually have 3 questions. The first one is regarding your acquisition of land. You have been quite pronounced about that you're going to increase the building rights in Sweden. My question really is, So are you looking at building grades where you could start pretty soon? Or are you looking at more, So to say normal building rights, I just wanted to see, because probably the ones that are going to be Used soon is a bit higher priced. Lars here. Hi Jan. Yes, you're absolutely right. I mean, we are Absolutely right. I mean, we are if we find things that have not been sown and that we can develop At starting from lower prices, of course, that is something that we would like to favor. But sometimes, we also need to look into those that Have been more of a plan, more of ready projects for us to get started and then being able to finalize it earlier on. So it's a mix, it's a combination, and we have to take balanced decision over time. And I also think that going back to Peter's comment about Having the right people in place, the organization in place is truly important no matter what in these cases. Okay. And the next question really regards your land bank. And Could you say how much what portion is the single houses in your total land bank? Which we don't have. It's a limited portion. And you can say that In Germany the big land plots we are buying there we can build both the single family houses and the multifamily houses on. And where we see a very large need To build up the land bank for single family houses is especially in Sweden which is the other market where we have single family houses. So Here is a market where we think there is a very good demand on Our very popular building system for single family houses. So we need to build up this land bank going Forward to provide more single family houses. Okay. My third question, just a clarification. You had a comment there on that your the prices for the houses have Come up more than the your costs, so to say. Was that cost relating to Material purchases or is it total cost that is you're referring to? Total cost I'm referring to. So it's a mix of if you have increased land bank. The projects we are starting it's predominantly where we have the land by for quite some time and where we have Achieved zoning and building permit on. So there is not so much implications of the Increased building right prices that we're seeing right now. So it's mostly that of material to some contractors. Okay. So material prices maybe more increases than the Housing prices or? No. If we start, housing prices if that is 100 The cost is approximately 75% to 80% of that 100%. So if 100% increase is more than the 75% or 80% you are getting an Increased buffer of course. And then as you are taking newer land into consideration when you are developing the average Cost of those building rights are higher than the ones you have used in older previous projects. So overall if you Just take the underlying the increase of material and the subcontracted prices is the material part of the impact of cost increase It's that we see in production that we are ready to start now. We also said this Again, this will also be something which will be over time since we have multi year agreements and frame agreements. Okay. I just was asking because I think the material purchases is like onethree of total cost. So Just wonder if there were that was driving the your increased costs or was it other items that were also Driving your somewhat higher costs? You need to look into your number when it comes to the material prices impact. The 1 third sounds very small. Okay. Okay. Thanks very much. Thank you. Our next question comes from the line of Stefan Blow from Nordea. Please go ahead. Your line is open. Thank you. Just one question for me regarding Germany. Have you noticed any changes in Germany when it comes to issuing building Permits. Yes that is something which we're looking into every day I can promise you that. That's why I'm laughing a little bit because that's the most frequently asked question internally here. Germany started up you can say 4 weeks ago, 3 weeks So go big time and we have seen that it is picked up a little bit, but it's a big Backlog to work from with a lot of permits that needs to be handled now. So hopefully and here is where The delta virus and the pandemic could sort of put sort of a little bit of stumbling blocks on the way of starts. But so far so good and how it pans out for the rest of the year We can only hope that they increase the efficiency now in the permitting. Okay. Thank you. Thank you. We have no more questions from the audio line. I will hand it back to our speakers. Thank you for listening in to our presentation, and welcome back on the 28th October when we present the results for the Q3. We would also like to wish you all a really nice summer.