M&A Announcement

Mar 27, 2020

Hello, ladies and gentlemen, and welcome to the Cinch AV Investor Update. I'll shortly be handing you over to the speakers who will take you through today's presentation. There will be an opportunity for Q and A later in this call. So for now, I'll pass you over to Thomas Heave, Chief Strategy Officer and Head of Investor Relations. Sir, please begin. Thank you very much, operator. Warmly welcome, everyone, to this investor update with Cinch announcing the acquisition of Wavy. My name is Thomas Heath. I'm Chief Strategy Officer and Head of Investor Relations. Little bit of a technical issue today, so still waiting for our CEO, Oskar, if we can sort that out. Luckily, I also have our other co pilot, Roshan Saldana, our CFO, with me today. So Roshan, I'll hand over to you. Thank you, Thomas, and welcome, everybody, to this investor call where we aim to discuss the acquisition of Vebi and of course also the other actions that we have taken in the financial market to issue new shares and increase our credit facilities yesterday. So moving on with this presentation and hoping that Oskar will join us. Move on to the next page, Page number 2. Just summarizing Cinch again as a business, we deliver customer engagement through mobile technology. We have a scalable cloud platform around the world that allows our customers, enterprises, large enterprises typically to communicate with their customers using messaging, voice and video channels. We are delivering 40,000,000,000 engagements per year. And with the acquisition of Wavey, that number will increase. Last 12 months, we had SEK 5,000,000,000 in revenues and SEK 574,000,000 in adjusted EBITDA. We're proud to serve 8 of the top 10 tech companies in the world, and we've had a scalable and profitable focus in our business model since the foundation of Singed in 2,008. Moving on to the next page. I think this is also something that we really bring up in all of our conversations, in all of our conversations with the investor community, but just again to reiterate where the market is today and where it is moving. I mean, historically, the market has been text notifications, primarily through SMS, 160 characters with limited possibility for conversation. What we can see today is that the market is moving quite rapidly into rich media messaging and the possibility to add pictures and video to the text messaging channels. And we can see a nascent but fast moving, growing industry within the conversational messaging space, expanding significantly, providing new cases use cases and really delivering transformational value for our enterprise customers, which we can enable through our solutions. Moving on to next page, number 4. And really where I mean, where we are seeing this transformation take place on the conversational messaging and the rich messaging side. I mean, we see there are 3 use cases really that or 3 broad parts of the customer journey on the revenue generation, service enablement and customer care. And if you look on the objectives of each of these journeys, I mean, text notifications has been primarily used in the service enablement kind of part of the customer journey, though it is used in the others as well, but primarily in the service enablement and revenue generation. And with conversational messaging, we can really cover the entire breadth of the customer journey and enable, for example, conversations with customers through OTT channels such as WhatsApp, which are also supported by chatbots or bots and artificial intelligence such as the acquisition of the Chatlayer platform that we did just last week. Moving on to Page 4, and I think the playbook to profitable growth. We are doing our focus is on having a strong connectivity layer and then developing specific software solutions that build on this connectivity layer and allow our customers to utilize and get more value out of the connectivity layer. Historically, Cinch has built a really strong connectivity layer. We have several 100 direct connections with operators and also connections with the major over the top service providers globally, and we can deliver communications with superior quality, scale and reach. And in the recent years, we see this nascent software value added communications platform as a service offering building up. And this is where Vebi helps us really the acquisition of Vebi really helps us in both of these layers. And I will come more into that at a later stage. As a company, we are using M and A to meet our strategic objectives. And M and A, we are doing within both of these layers, within both the connectivity space as well as the software service space. And in the scale and profitability space, we're acquiring sticky customer relationships, we're acquiring direct connections and also extracting synergies by transferring to Cinci's technology platform. In the technology space, we're acquiring complementary technology that fits our strategic product road map. And again, the acquisition of Vabrio really helps us within both of these segments. Thomas, I'd like to invite you here and maybe give some more color on this. Thank you very much. So we are on Slide 6. Still, I believe, so really the 2 buckets here, as we try to make it clear, the first optimum level on scale and profitability, where we acquire typically a well run SMS connectivity provider with a regional sticky customer base, someone who does it well but doesn't have the scale or muscle to be one of the global winners in this market. In the purple box, technology and go to market, we acquire complementary technology and go to market ability, which we can then leverage across our customer base throughout the world and throughout our different business units. You will know that in autumn 2019, we completed one transaction in each category, PWW in the scale and profitability category, followed by MyElephant in the technology and go to market category. We then go on to Slide 7. You can see the history here. We had to condense the slide this time to fit everything in a little bit. But in the acquisition of Wave, you can really see it's a little bit of both. And indeed, we have valued both of these parts separately as we also communicated in the press release. So in the scale and profitability bucket, we have Weydd's established SMS connectivity offering with 13,000,000,000 messages sent across Latin America. And then separately assessed, you have the technology and go to market acquisition of Wave's innovative product offering and live customers on new conversational messaging channels. So handing back, I think, to Roshan for the a bit of the deal rationale. Yes. Thank you, Thomas. So turning to Page 8, which is summarizing the deal rationale. We're acquiring Vabii yesterday. We have announced intention to acquire Vabii yesterday, which is a leading SMS messaging provider in Latin America. It is the 2nd largest SMS messaging provider in Brazil, but has significant operations in Mexico and also operations in Colombia, Peru, Chile, Argentina and Paraguay. So this gives us really a great presence over the entire Latin American space with 260 employees. In addition, talking about Brazil, it's as we've said also before, it's one of the key markets for WhatsApp. And what we can see is that Baby has really been one of the has come forward in the development and has high WhatsApp volumes. It also has customers using Apple Business Chat, RCS and Facebook Messenger. The conversational messaging business that Baby has using these OTT type of services is growing from a relatively small base at more than 200% year on year, and this is driven by innovation and the use of new channels. For us, the SMS business fits very well into the scale and profitability category of earnings accretive deals. As Thomas said previously, we're doing the valuation of the SMS business at around 9.5x adjusted EBITDA. And of course, that's a very EBITDA accretive transaction for us to do. When it comes to the innovation business, that fits into the technology and go to market category, and we will use the knowledge and the learnings and of maybe within the Latin American context and to fuel also organic growth in other countries globally and bring that to the rest of our markets. We get 50 direct operator connections in Latin America. In Brazil, where we already have direct operator connections through the acquisition of TWW in 2019, we further increased the volumes and thereby get cost benefits also within the Brazil market. And then, of course, when it comes to the net generation messaging, the conversational messaging, the way the revenue model works, we're able to charge more software or SaaS related charging models with extremely high gross margins. And that is also reflected in our valuation of the business where we evaluate at around 3.5x gross profit and sales. Yes, I think Oscar is on the call now. So welcome Oscar And do you want to take over from here? Thank you, Rocha. Can you say a little bit more on the deal rationale? Yes. Yes. Thank you, Rocha, and thank you for making the start of the presentation. Yes, we had some technology problems here in the morning. Yes, I can give I mean, you run through the deal rationale slide. I can give a clip maybe a couple more commentary on just the deal rationale. This is a deal we've been working on for the last 12 months. We've been getting to know the company and its management team, and we've been watching their performance quarter by quarter on EBITDA and gross profit. So it's a company we're seeing that we know well and we have good understanding on what they're doing and how they're doing, both from a business perspective and then a people perspective. The good rationale is, it's like it says on this slide. I think it's very clear. I mean, it's an accretive acquisition. We're adding 14% to our EBITDA, and we're taking in money to fund it for around about 7 percent. So it's a clear accretive deal to our shareholders. It is very clear to me also that the SMS part of the business, I mean, having direct connections in Latin America being 600 to 30, around about 1,000,000 people, being highly sought after and demanded from our biggest tech customers and a lot of our biggest big U. S. And European Enterprises. This puts us in a position to offer these international clients a very good service into Latin America. So it's strong for us to bring this connectivity to our existing customers. And we're now the only player you have direct connections both in Latin America and North America, which is, I think which we think is a very strong position. Next one being having an innovation business that is growing 200% per year roundabout. I mean, that's from low numbers. So obviously, the percentage growth rate is expected to go down. But it's still becoming it's a business that is there and is growing to a size which starts to affect us for real. And that's attractive in its own right, just having that type of business, but it's also super attractive for us to be able to export the knowledge that Wavey has gained from large enterprise customers in Latin America and seeing the use cases there, knowing that this use case is successful for the banking sector, this use case is effective for the insurance sector, this use case is effective for something else. And being able to export that with real customer references is very, very powerful. So that's something we feel is very strong for us. That's mainly the core reasons for making this deal. So looking through it, and we've been obviously been through it a large number of times here, we feel very comfortable with these things. And we feel comfortable we both will improve each other's performance. That said, I think we can skip to the next slide. So Latin America, it's a region of 626,000,000 people in the region, and it has a rapid increase in smartphone penetration and mobile handheld use. So just the size of the region and I have a powerhouse as Brazil being the 5th large GDP country in the world. We think it's a very interesting region for any player that wants to that has global ambitions, that wants to be a global player. It's good to put in context that it's almost double the size of the U. S. In Punjab people, obviously, not thinking in GDP. But being a leader in such a region with both Mexico and Brazil being very large countries is important to us. And given the absolute global nature of our business, there is a lot of business to be in this region. The other interesting thing with Latin America, in particular, especially when it comes to the new technology services that we have done, is Latin America and India is the 2 leading countries in WhatsApp penetration from consumer to consumer, but it's then also the 2 leading countries in WhatsApp Business Messaging and in our space. So that's the 2 largest regions. And being able to become a leader in the next generation messaging in one of the leading regions globally is attractive to us because that's where a lot of the learnings are happening. And it's easier to do the learnings in India and Brazil or in India and Latin America because the penetration to consumers are so high. So when you have a 90 plus penetration of WhatsApp to consumers, it's B0 business to launch business services to that population. And Wavey then being part of Mobile Group, and Mobile being a very well known group in Brazil, often ranked as one of the absolute most employers in all of Brazil, waive its subsidiary to Morbile. And Morbile owns other companies such as Ifood, one of the largest food delivery companies in Latin America. Would WAVI as such being the messening part or the Messaging subsidiary to Mobily has some 60 employees, 9 offices, 6 employees and brings its connectivity throughout Latin America and adding 13,000,000,000 transactions per year. And so it's strong for our connectivity business here and then also on customers and volumes in WhatsApp, Public Business Chat and RCS across the regions, ranging from large banks to tech companies. We want to on the next slide, if we move to that, we want to show you a couple of use cases that WaveView has done in this new innovation business that will exemplify and I think show you why we're interested in that part of this business. And this is one of the use cases that we're doing through WhatsApp. It's a use case to a company called Egresso Rapido, which is a leading ticket sales and event management company in Brazil. This company has a large number of incoming calls to the contact centers with 20,000 tickets per month. It's complex to scale support teams with maintaining quality, and they're looking to engage customers with WhatsApp where they're already active. So in an existing purchase journey, in a purchase journey with a company, they are at some point turning the users from phone to WhatsApp or from rent to WhatsApp. It may be in the phone queue, you would say to users, hey, if you want to try to answer your question via WhatsApp, if you can remain on your lines or remain you keep your position in the queue. But if you send your question via Whatsapp, we can probably serve you faster, for example. So they have created a hybrid chatbot combining scripted decision trees with AI and natural language processing. And they have support for multiple use cases like PDF ticket delivery and event information and order status. And then realizing that actually bots can't handle everything. So maybe they can handle the front end of the queue front end of the question to a specific user, but then handing it over to the live agents when needed. Doing this, Ravi has been able to, apart from doing the message transmission, very much like us, I mean, they're doing the connectivity of translating the message, but they're also then answering 82% of the tickets automatically by the bot. So they have 70% satisfied user in customer service to the consumers. They're reducing the cost in the call center with 45%. And as I can as you all can, it's very easy to understand that that's a very, very number of number of calls in the call centers, we can automate a fair share of them and it can reduce your cost to say 45% or 50%. It's a very, very strong position. And again, what they're doing here, they're still sending the messages and taking a margin for the sent message, but they're adding a sales value add, obviously, for their software as a service that is the bot, the intelligence of actually being able to understand the human intent, what questions are coming, what answer what question that this user wants to have response to and then being able to answer that question. That's an additional software module, which they're charging extra for. And that can be anything between $0.10 up to 1 and obviously averaging around $0.30 or something like that for the transaction. So that's one use case. Look at the next one. This is for a company called Play Kids, part of the Morbilly Group. And we're taking quite a few examples from the Morboli Group in this presentation because it's easy to get permission to talk about Verstaz then. But there's a lot of companies in Brazil and Mexico and the rest of Latin America doing these things, everything from banks to financial institutions. So this is via Apple Business Chat. It's a new channel that Cinch has not yet launched, that WayV has launched and WayV has been innovated together with Apple and Apple Business Chat on this one. And here you can see a couple of different functionalities. You see in a message here, you see that a time picker with action buttons in the message. You would actually get the message looking like this and the blue buttons to the left would be the action buttons, so you can just select them. In this case, it's selecting various times that they want to book a meeting with. 2nd one being a list picker. So you see a list there, and you can just like press one of these buttons in the list, and you will select your payment options or what you want to do. And the next one being authentication. So you can do authentications within Apple Business Chat of who is this user. And then you have the actual chat window, which is within Apple Business Chat. You can chat with the user on an iPhone in a message pay format. And this is, for example, it's reduced it's increasing the activation when signing up in the sign up flow with 45% compared to email and phone because user preference and the ease of use of this channel is very, very effective. So it's very, very effective. So this is a way to get more users to get signed up with Take It. And Take It is a video based subscription service for kids, I should say. So another very good use case and also adding another channel to the mix is strong for us. And here we have Paul from Ifood. It's another partner company, partner of the Mobley Group, doing food delivery. It's interesting because this is targeting both users and the couriers of Ifood. So Ifood has 120,000 couriers or people delivering food throughout Latin America. And there are many situations where there are quite conversations between the customers, couriers and Ifode, and it's challenging to answer effectively and can end quickly in voluntary rising. So here they have a chatbot available through in app messaging and again a new channel for Cinch with then integration into Ifood's Zendesk, and Zendesk is the customer care software environment. So again, you automate part of the flow, and when you cannot automate anymore, you send it into Zendesk and it's an answer by live human. The live human answer is done by Zendesk and Ifood's people. But the BOP here with the AI and natural language processing is done by waiting. And it's helping them to resolve a common use case like the restaurant isn't delayed or can't find a location or client can't pay. And you have a 7,000 tickets resolved and then average time to sell the ticket is 5 minutes and 93% customer satisfaction is there. So it's pretty easy to understand that all of these use cases just examples, you can bring them into a lot of other companies. And we see a good way for us to able to export the great knowledge that Wave has gained in this area. The combination of Wave and Chat Layer, you may ask, because they're both in AI and natural language processing. It is Wavy has focused mostly on large enterprise and innovating closely with large enterprises. And Chatlayer has focused is more of a self serve platform. So Wave doesn't have a self serve platform, but they have more experience from deep integrations, innovation with large enterprises, while Chatlib more has its self serve platform and has less deep integration with large enterprises so far. And the combination is great because Chatlayer will help Wavely to become more scalable and WaveIT will help chat later to have a lot of new use cases for large enterprise sales. Last slide, Roshan, do you want to take over to the financial targets side? Yes. Thank you, Oster. Yes, just to summarize again the financials related to Vebi the Vebi transaction first, where Veyvi is expected to record revenues of BRL464 1,000,000, a gross profit of BRL130 million and an EBITDA of BRL48 million in the 12 months ending March 2020. I think the closing exchange rate yesterday was just over 2 from Brazilian reais to Swedish kroner. Finch is paying upon closing BRL 355,000,000 in cash and just over 1,500,000 shares new shares in Cinch, which will imply an enterprise value of SEK 1,170,000,000. I think that gives us a multiple of SEK 12.2 billion on EBITDA. Closing is subject to customer closing conditions and also approval from competition authorities in Brazil and is expected to take place during the second half of twenty twenty. When it comes to our financial targets, I mean, we have unchanged financial targets to grow adjusted EBITDA per share as 20% per year and to keep net debt over adjusted EBITDA under 2.5x. When looking at the big transaction, the company and the Board decided that while we could, of course, finance this transaction through our existing debt facilities and cash and also within our existing leverage limits. We wanted to secure financial flexibility for the future, and therefore, we announced and completed a direct share issue yesterday. The direct share issue was significantly oversubscribed and was finally closed when we have decided to emit 5,000,000 shares at SEK300 per share, which is a 2% discount, a relatively low 2% discount compared to the closing share price of NOK206 yesterday. When looking at pro form a calculations, so just the Cinch 2019 adjusted EBITDA was SEK574 1,000,000, Baby at current exchange rates had a 2019 or last 12 months EBITDA of SEK91 1,000,000. And then of course, we have Chatlayer, the acquisition that we closed last year that had around SEK10 1,000,000 in adjustability in the last 12 months. When it comes to the net debt side, then we have, of course, since had a closing net debt at the year end 2019 of SEK 9 59,000,000. The VABY transaction will add net debt of SEK 710,000,000, the cash component of the purchase price and the Chatyr transaction an additional SEK75,000,000. In addition to this, the share issue before emission related costs will contribute SEK1.5 billion in cash to the company, And that would then give us the performance net debt over EBITDA of NOK 0.3. In addition to the share issue, we also announced yesterday that we have increased our credit facilities with the bank with SEK 600,000,000, which is on top of the previously existing credit facilities. So overall, a very strong financial position going forward. With that, I would like to leave the word back to Oscar. So thank you, Roshan. And then that was the last slide. So the thing I should say is thank you and open up for questions. Thank you. So ladies and gentlemen, if you haven't already and you want to ask a question, simply press Our first question is over the line of Pedraj Sabinovich of Carnegie. Please go ahead, sir. Your line is open. Thank you very much and congratulations to another very interesting acquisition. I think you mentioned in the press release on the synergy side that you will have around €30,000,000 to €40,000,000 that you hope to reach within 24 months. And if you can just talk a little bit about how you would go about reaching this, what assumptions are behind, what could occur to make the synergies even larger or smaller than anticipated? So, Lars Ram, do you want to take it, Gerard? Yes. I can take that. Thank you, Peter, for the question. I mean, yes, you're right on the numbers. We said SEK 30 million to SEK 40 million or SEK 15 million to SEK 20 1,000,000 in expected synergies. That's the run rate that we expect to reach after 24 months. The synergies that we specify are primarily in 2 categories. 1 is our cost of sales. As you know, in our business, we have a significant cost of sales towards carriers and operators. And what we can see is that both in Brazil, where we have an existing business, we see synergies through increased volumes with existing operators. And then also in Mexico, where we see that, that maybe has direct connections and we've seen synergies with our international traffic terminating into that market. There are synergies in other markets, but these are the 2 significant ones. The other part is, of course, on the OpEx side, and that's through a combination of G and A functions, both with the group, with the Cinch Group as well as locally in Brazil between the two acquisitions, we obviously see synergies in terms of how we can run the business together and grow in an efficient way going forward. In addition to these two areas, and these are estimates as of today based on the work that we have done, due diligence that we have done, in addition to these two areas, there are, of course, potential to show additional growth, primarily within sort of the conversational messaging space and how we can export sort of the use cases and the knowledge that we have within BAYV to the rest of Cinch, how we can bring the rest of the Cinch products in, when it comes to Chatlier, when it comes to our knowledge and experience on marketing campaign platforms and really contribute that into VAVI and drive further growth. I think there's also potential for additional growth in terms of our increasing our competitiveness on a global level within the connectivity space. These kind of old synergies are not captured within the numbers that we have disclosed. Yes. And to comment a little bit on what could delay, it is obvious that it is harder to do this in coronavirus time when you cannot travel. It is easier to extract synergies and cooperation between business units when you have an easier time to meet. So that's one of the things that may make it happen. Now these are things we've done many times before. I mean, this is our 10th or 11th acquisition, and we have pretty good models for doing it, and we have a skilled team to do it. But of course, that's one of the reasons that may delay. We should also be a little bit more cautious in this time. So let's see, but we'll work hard on that. Thanks. Thank you very much. Another question then on the WhatsApp side of things. And I think you, Oscar, mentioned that the penetration in Latin America is quite high, 90% between consumers. And can you remind us a bit on the differences in the monetization between messages in WhatsApp, Apple Business Chat, Messenger and SMS? How do these differ for you and the differences and why? And how do you expect this to develop going forward? Yes. Yes. So I we actually don't do a large differentiation in transmitting a message because what we see is transmitting if we're just transmitting the message, we can typically charge roundabout the same mark up regardless of operator charges on the text messaging side or on the actual channel. Because in the end, I mean, the end user wants to the enterprise wants to relay a message to the user saying something and they're willing to pay a markup over operator or Internet private charges on that. So that's we don't see large differences between the channel. Where we see a large difference is, well, for this new and advanced channel, if you want us to supply an additional software module, for example, to do AI to respond to the message that does an additional service, there you have a large markup depending on what that additional service is. If that additional service is an AI engine, you can charge we see examples of people charging up to $1 per automated conversation. If that kind of software module is a web based graphical user interface where you can create this message on the web as a marketing user instead of having to call your developer, which would connect to an API, it may have a lower markup per message basically. So what you're charging for there is the additional software module that you add. In rough terms, that's where we what we mean with the SaaS value add. Then of course, in the early days, you may see a little bit higher markup on new channels because fewer people have access to them, etcetera, and the volumes are lower. But in general, that's how we see it. So the connectivity business remaining the same, but then adding for the added software value add. And that will also go for in between Apple's just chat and WhatsApp and WeChat and KichaoTalk and LINE and Facebook Messenger. We expect those to be relatively similar if we only talk about the message transmission. Super. That's very clear. And I have 2 more questions. On the M and A side going forward now, is it safe to assume that this could be paused for a bit now considering you have some integration work to do with the acquisitions carried out last year and now to quite in quite a quick pace? And when will you be ready to acquire more companies? Would you reckon? This is a very interesting strategic question that we obviously take at a very high degree of a pause and rejected quite a fair number of deals in order to do the integration. Then, of course, in situations like this, we are we're concerned about the coronavirus crisis, and we in a major economic slowdown need to be very, very careful about it. I think it will affect any company in a negative way if you have a major slowdown. But then we are, as a company, who are highly profitable, where 50% of our gross profit as of today, roundabout 45, drops down to EBITDA. We obviously have a it's a negative for us for the corona crisis, but it's also an opportunity because we stand relatively stronger than many other companies. And we need to evaluate that very clearly and say, what are we going to do? Are we going to go ahead and add another company? Or are we going to hold off for a while? But we definitely have a specific opportunity to do so, and that's it's an evaluation we do. It is not so that the opportunities in the market have dried up. It's maybe so in the other direction because a lot of good companies out there want to be part of a larger, more stable group. And if we can make this type of transaction where we are, I think it's we're both diversifying our revenue base, getting a lot of new enterprises in. We are increasing our EBITDA, and we're doing so without increasing our financial leverage because our owners want to support us, maybe we think there are more deals in the future, but that's very hard to comment on. Thank you. I think we have more questions on the line, so I think we should move on to other questions. Okay. Thank you. Thank you, guys. Our next question is over the line of Frederic Thank you very much and congratulations to a very nice deal. Can I just have a few questions maybe on the sort of logic behind this deal? You made the TWW acquisition in the fall of 2019, and now you go for WAVI. Are there any if it would have been the other way around, would you still have gone for TWW? Or is it so that they are complementary in a way that sort of still triggered you to have them both on the agenda for your M and A? So could you sort of elaborate a little bit about the differences, geographies, solutions that one have and the other one might not have and so on? Thank you. Sure. If you know the future, how would you act? That's a hard question, I'm afraid. It's a little bit hard to answer. And obviously, you don't have that option in business or in life. So that's a hard question to answer. But I will answer on the question on the differences, and we do think they complement each other. So TWW is a very high quality supplier of text messaging service in Brazil only. They have a very clear cost focus and a very clear high quality focus, which we very much appreciate and we think that will add to Cinch's total global messaging solution. Navy is also present in Brazil, but they're also present in all of Latin America, which TWW is not. So there, it's a clear, clear addition of getting a coverage for rest of Latin America, which is one of the biggest things that are sought after by our big tech customers. So that's a clear addition. And the other clear addition is that WayV has an innovation business, which we're very interested on because it complements the rest of our innovation business, and we can export the use cases to a global level. So yes, there are very clear differences. But then they both have an operation in Brazil, which we think is good because Brazil is the 5th largest populous GDP in the world. So therefore, it's an interesting country to be strong in. Just one additional comment on that, Frederic. It's also the fact that TWW, we get more synergies because of having more volumes, right? So there is a synergy effect of that as well. Yes. Thank you. And a follow-up then on that. Is it so that you will need I mean, one of the ways to get the synergies out is to move traffic from an acquired platform to your own and sort of close down the platform. Now you have platforms for the Latin America type of traffic and maybe close one of them and reach some of sort of on the technology platform level synergies? Is that fair to assume? Our strategy is always to be I mean, we're a cloud company. We want to have, as much as possible, one platform and that platform, a Cinci's platform, and that goes for any acquisition we make, including these 2. So that's the general course of action. Then we are taking that in a step by step manner in order to provide a good service to customers. So it's not something that we have to do overnight. But long term, that is the obvious best strategy for our customers and our owners. Another follow-up then. The innovation sort of business unit in WAV, will that be still within your sort of messaging structure? Or will it be part of operator or voice and video? I mean, where will that be placed? Messaging comments here from what we know today at least. But it's a few months before regulatory approval. So marketing is where you should expect it to be. Okay. And maybe a comment to that, the AI services, you were laser methanol, but they can also be used in the response rate service you can use also over voice, right? So the SaaS layer is actually a layer on top on the channels in general, just to understand how the logic works. Okay. Just maybe a last one to Rojan. In the last Q4 report, it said you had revolving credit of €900,000,000 and then bank overdraft of €200,000,000 You, at that point, had used €210,000,000 of the revolving credit. Now you add €600,000,000 and you say I have credit lines of €1850,000,000, €1,850,000,000 Can you sort of fill in the gap for me what is the difference between the capital? Yes. We have yes, since it's hard access to term loans, which fixed term loans since before. We're obviously amortizing that over time and it's reducing, but that's really the gap. Okay. Thank you. Thank you very much. Okay. So our next question is over to the line of Ramiel Khourier at SAB. Please go ahead. Your line is now open. Thank you, operator. Two questions, if I may. Just starting off on the regulatory side. I mean, you're merging the 2nd and the 3rd largest player in Brazil. Have you gotten, to the extent possible any flavor that you could provide us in terms of if you've got any indication of this actually being viable? Have you heard anything from the regulator or stock there? Yes. Should I maybe try to answer that, Oscar? Please do. Yes. No. So the first question is, no, we have had no direct communication with the regulator in Brazil. Of course, we are as is normal practice, we have a quite comprehensive acquisition process doing various kinds of due diligence. And one of them, of course, is looking both from our side and of course from the seller side as well, looking very closely at the competition risk and analyzing that. We are fairly confident from both sides, of course, given the analysis that we have done and looking at past precedents and information available generally in the market that we feel that this will be approved by the competition regulator. We will follow the process that is mandatory in Brazil and have a close communication both with the seller and the competition regulator regarding this process over time. I think that's what we can say about it at this point in time. Yes. I mean, we should add to that. We have got I mean, we have obviously engaged with highly recruited competition lawyers in Brazil and gotten legal opinions from both sides on but I think it's a good likelihood. So that we that side we have done in a very diligent manner. That's very clear. And then finally, I'll bake 2 questions into 1, both relating to product portfolio. But just so I get this correct here, Wavy does not offer voice video and personalized video capabilities today? And then secondly, it seems like they are offering a customer service platform, which isn't really sort of a core business of yours, at least to say. How do you how will you use that? And will you use it? And if you do, do you see any risk of competing with customers and or channel partners? So first question, voice and video. No, they don't, but they want to. It's a very clear answer to that. Number 2 is they are not offering a customer care platform in any way, shape or form that would feel competitive to any large player in customer care. They're offering a platform for doing the handover between the customer between the messaging solution and the customer care provider. And sometimes, you need to have a simplified web interface to show your enterprise customer these are the messages coming in. But offering a clear only customer care from wavy is not something that any medium or major player would see as competitive. Perfect. Thank you very much. Okay. Before we go over to the next question, which is back to Pedreg at Carnegie. If anyone else has any further questions at this stage, please do press 0 and then 1 you very much, operator. Thank you for letting me back on. Just a couple of follow ups here. First one on TWW, which you mentioned had a different seasonality than Cinch you've said before. And can you elaborate a bit on the way this one is the same like TWW, like Cinch? Or is it different? Also explain maybe a bit on the seasonal patterns why they are like that way? Roshan, can you take this or should I? Yes. Sure. I can try to. I think, Perak, I think it's a little bit early to go into very, very detailed discussion on the seasonal trends in Baby. I think from an overall perspective, you should look at it as in a similar way to the TWW business and the cost I think Brazil is still a significant market for VAVI and we're affected by overall sort of trends in the Brazilian economy. So that would be the short answer. All right. Super. And then on your portfolio with solution and new technologies has expanded quite a lot in the past 6 months. And do you feel content with this now? Or what technologies do you feel that you're lacking today that you would like to add to the mix, so to speak? All right. So I'll answer that question. So I feel I'll answer it in 2 ways. 1, I feel much more content now, and I hope you see that this fits the way we have communicated before. So I think we have taken great strides in both our on the internal development and on the M and A front in order to give us the type of offering that we want for the future. On the other hand, when I look at the market and I say, hey, the messaging market is SEK 20,000,000,000 dollars large or SEK 200,000,000,000 large on the text messaging side alone. And what's happening now is the entire messaging market is moving from 100 and 60 characters to be able to send an app to your phone with action buttons and flick pictures and videos and ability to respond to an AI services, I truly see the benefit to the consumer and to the enterprise using this type of services as rough number now premixing because it's so much more powerful. So the amount of software additions that you can make, I think we have only started. And the opportunity of growing the share of revenue with enterprises, I think we have only started. So in a long term perspective, there is a lot more to do, both internally and externally, and we plan to do so in a responsible manner where we continue to grow profit. But I think we have only seen the beginning on this market yet. Brilliant. Thank you. Thank you very much. That's all for me. Okay. So that's all as well for the questions. So can I just pass it back to you for any closing comments at this stage? Thomas here. I think we have one question from the webcast. Let me see if I get that right. That's Casio Mercado asking, hello, how much of Wave's revenue comes from its former owner Morvila? Okay. That is a relatively small portion. I do not know the exact figure, but it's not something we are concerned about. In the innovation business, Morbere has utilized or VeVe has utilized the fact with close relations to a set of tech companies in the Morbere Group in a very, very good way in order to prove a set of use cases. But the Innovation business also contains a lot of other financial institutions and very large enterprises. So they've also proven that they take it to outside the group enterprises in a big way. And the reason we used a lot of the cases from the Movil Group is that it's easier to get the deep stats of the business benefit to do to give officially from people that you're close to. But that does not represent the total revenue in the innovation business. On the text messaging business, it's a very small part. Just one additional clarification as well on that. I mean, a part of the purchase price is being paid through shares, issue of new shares to Mobiles. Mobiles would actually be an owner of Cinch after the acquisition, receiving around 2.5% of the share capital of Cinch. So we continue to have that relationship in different ways. Okay. Do you have any closing comments for today? In that case, this now concludes today's call. So thank you all very much for attending and you can now disconnect. Thank you. Thank you.