Earnings Call: Q4 2022

Feb 2, 2023

Good morning, and welcome to Vitrolight's 4th Quarter and Full Year Report. Today is the 2nd February 2023. The speakers of today will be my colleague, CFO, Patrick Tolf and myself, Thomas Akselsohn. And by that, let's go into the presentation and next page, Page number 2. The headline for this presentation is strong profitable growth for the quarter. What we will do is that we will quickly go through the numbers, and then we will go into more details by Patrick and myself. So a quick one regarding the quarter is that we had an increase of 66% in Swedish currency, and the sales was SEK 855,000,000. It was a growth of 11% in local currency. Later on, we will go more into those kind of details. The adjusted gross margin was 56.5%. EBITDA, we made SEK 273,000,000 and the margin was 31.9%. EBITDA per share SEK 2,200,000,000 and operating cash flow SEK 166,000,000. Since it is also the full year report, I will like to also reflect a little bit about the full year report, and that is the sales was SEK 3,234,000,000,000 and there was a growth of 92% in local currency and organic growth, 10% and EBITDA margins 32.5 percent and generating a good operating cash flow of 636,000,000 Okay. That was some number crunching. Let's go into more about the details regarding what we have done the last quarter and also during the year. So please go to next Page number 3. I will start with the sales and growth per margin by regions and then go into the different business areas. Let's start then from the right side and go to the left. So from the east to the west on the geographical side. We increased, as I said earlier, with 66% in Swedish currency. In local currency, it was 48% and an organic growth of 11%. So that means that the acquired growth in the quarter was 37%. Japan and Pacific, organic growth, 29%. We are very pleased with that growth. It is coming from mostly the old vitriolites, what I would like to what is then the business areas, consumables and technologies. We are performing quite well. I would like to say that with organic growth of 29%, and it is due to more acceptance of our time lapse equipment. So it's getting more and more in that territory to become standard in some countries. Reimbursement system and the well positioning position we have in Japan has helped us in that region. Let's go into Asia. Asia is a mixed picture. You probably know, if you have been listening into this the last couple of years, that we have had a very strong position in China, and we are continuing having a strong position in China. However, China, last quarter, it started well in October and then it went down due to COVID. And I don't want to go into those things because you all know about the COVID and the situation has been in China. So for us to have a situation where we have an organic growth in that region, which is then China And if we go into the Southeast Asia of 21%, it's remarkable, I would like to say that. And that is also taking into consideration that we have divested some of the business and that is within the Genetix side, where everything right now regarding different markets and products and everything has been to coming to where we have the strongest positioning and where we can have a profitable growth. So that was the situation of Asia then. Then going to EMEA, there we had an organic growth of 2% and the pro form a, which is maybe good to also looking into or 6%. That region, a little bit up, a little bit down depending upon the different countries. We are getting questions regarding the geopolitical situation and that is impacting. It's difficult to say, but yes, In some countries, we can see a decline of IVF cycles, and that is from the information that we are getting from the customers. But otherwise, it is a stable market. And let's go into then Americas, organic growth of 8% in local currencies then within the region then. If we see this chart, You could easily say that if we go from the east to west, the more west we are coming, the stronger position we had in market share on genetic services. If you go from west to east, It is a positioning of the company and what we are selling, which is more the, let's say, the situation of consumables and technologies. Overall, regarding sales and what's happening with the customers is the consolidation is ongoing. And it is also that due to that, it is more focused on having crossed the sales and building up the structure between the regions, and that's important for going forward with that. Okay. Let's then go into how it looks like on Page number 4 and the consumer business area. Sales of SEK 3,000,000,000, SEK 3.49 million. As mentioned before, very good growth in Japan Pacific and Asia. Not so good growth. It's still a growth in EMEA and a little bit decline in Americas. Looking into the product areas, it is a stable situation for our media growth. There are some up and downs on the genomics, which means those Kits that we are selling for the clinics or laboratories, they want to do their genetic testing themselves and a steady underlying growth of disposable devices there. If we leave that one and go into the Technology business areas on Page number 5. Good growth of 36%, 27% in local currencies. But I want to address the thing that it is fluctuations between the quarters. So we have a good quarter and we can have a really good quarter that is not so good. But overall, it is an extremely good growth, and the trend is looking good for these products. And it's no changes. It is the situation of workflow where we can see more and more acceptance on workflow on the LSA Americas, and it's already accepted in EMEA for those things. Technologies, Pleased to say that the strategy and ambition that we have had for years, and it takes time to do it, is to get a more balanced the revenue projection by selling hardware, software, disposables and maintenance. And just the situation of having more stable revenue from software and disposables are helping the areas with the projections of future sales. Going to Page number 6, genetic services. Helix Services is not Agenomics. It is part of the Agenomics, but we have built a new company during the year. So we are VitriLife and the VitriLife group then. And within that field, the service side that we have that are dealing with Genetic testing for customers is the business area, Genetic Services. During the year and during the quarter, we have done changes to focus on profitable growth. It is a clear path going forward. It is the focus on Fertility IVF then. And the situation then is that We are and it's been a good, good outstanding work from our colleagues within genetic services and for the rest of the team to adjust the businesses to each other then. So we can have one way of entering into the customers. And one way means that we one way is to listen into what the customer wants and if they want Products, services or a mix, that will be decided by the customers. So it is a growth of 14% and it is minus 2% in local currencies. Overall, the U. S. Market stands for more than 50% of the total sales in Genomic Services then. And the situation is that we have grown in number of testing being performed, but we have not grown in sales in U. S. Due to the price pressure. You can say that the reduced pricing situations on long term agreements that was done earlier. And that is being changed. I mean, we want to deal with customers and we would like to have a good relationship with customers where we together can see that we are adding value to each other then. So by that, let's go into more of the side where Patrick will guide us through. So please go to number 7 and financial highlights. Please, Patrick. Thank you. So we will then start with looking on the net sales. As you recall then from 2 months here, the net sales It's for the Q4, then SEK 855,000,000. Recall also then when you come to the comparison for the last year that We had 1 month during the Q4 2021 with Gennectic Services. So that's also why When you talk on the pro form a basis, we'll also then show that performance development. So 37% Client growth during the Q4, 66% in total growth and the currency impact of 18% during the Q4. So it will then look on the impact then on growth in local currencies. That was 11% on the total sales. But as we also know that during last year, there was not So large, but anyhow, sales of COVID-nineteen test. So that means that when we look on the pro form a, we take exclude then the COVID-nineteen test. And also now we have divested then the businesses in China. So if we exclude That we also then have a pro form a growth of 9%. The sales of COVID test During the Q4 2022, it was very low in comparison with 2021. If we look on the gross income, that is an improvement then to SEK 463,000,000, and that gives us then a margin of 54.2%. And also then, if we add back then the adjusted then for the acquisition related Tangible assets, that gives us an adjusted margin of 56.5%. Moving on to EBITDA, that ended up with SEK 273,000,000 giving us then a margin of 31.9 percent for the quarter. The pro form a was 27.8%. And also on the impact then when it comes to the EBITDA, we had a positive impact on EBITDA with SEK 32,000,000 on that side. If we then look on to EBITDA per share, that continued to increase, a 196% increase to an EBITDA per share to $202,000,000 Moving on to the next slide, where we look More into operational expenses, that in comparison with the pro form a of EUR 281,000,000 increased with 5% to EUR 295,000,000. So we have a couple of impacts that has increased the expenses and a couple of things that has decrease the expenses. And let me talk through that one. The sales and marketing activities has increased. So we are More active on the joint marketing activities, we have been visiting various kind of fairs like ASRM and so forth into which we are working on implementation a CRM system and more joint activities for the combined now global sales and marketing team that we have. We have also then a couple of group related products That is also then related to integration like IT related projects, but also focus on leadership programs that we have been doing during the fall year. Generally also, we have increased a bit on the staff and personnel costs during the Q4. That is seen and also given that the presence are globally when it comes to sales marketing team and also when it comes to the group function, we can see a negative impact then on the increase on the expenses side there as well. On the decreased expenses, you see that The R and D cost goes down, and the majority of that is related to The agreement that we now have with our former Chief Scientific Officer for Genetic Services, Carlos Simon, who will Then basically have set up a foundation, and we can then focus the scientific research through an agreement with that foundation. And the residual part then of the R and D within Genetic Services and Mittelof Group are then focusing on applied product development. So that is a very good setup that we have going forward, and that has impacted then the R and D focus on our side, which is now continuously then focused on applied product development. So if we then move on to the next slide, where we will summarize then the key financials. Keep in mind, as I said initially, that Q4 2021 contained 1 month of sales for genetic services And also then that the pro form a number still included COVID impact for 2021. But again, we have then An improvement then when it comes to sales, gross margins are approximately on the same level on the quarterly basis. EBITDA margin, 32%, significantly up than compared to the pro form a on that side. And also, as Thomas mentioned here initially on the net debt to EBITDA, that is now down from about 3% that it was a year ago, down to 1.5%. That gives us, of course, additional flexibility going forward given that We have continued to generate positive cash flow. Also worth mentioning, when it comes to The impact in the net income is that we have had a relatively high tax cost during the Q4. And we have basically then managed a couple of adjustments then related to the acquisitions, I've taken a conservative approach through the things that was related to the acquisition. So that was an extraordinarily high tax rate during the 4th quarter on that slide. So moving on to the next slide, Slide number 10, the management comments. To a bit summarize what we have done during the last year and during the Q4, We have done, as Thomas initially started with here, we have done significant changes. We have created Bit2Life Group. We have now as we have this from the 1st October, we have 1 global sales and marketing team. We have focused on fertility. We have then divested activities that are not related to fertility, and we have now strong focus on things like operational excellence, commercial excellence. So we have done a lot of activities to continue to strengthen Vitro Life Group. Also important to mention is things like values. And we have been working very closely with the legacy Victor Life, legacy Ideanomics team to combine the vast set of values that we have. And we have now a combined set of values for the Victor Life Group, which is working very, very well on that side as well. Time lapse, also important to mention, becoming more and more standard of care in several markets. And we will then continue to explore then the possibilities, not only then of using Time Lapse as an embryo selection tool, but also how to improve the workflow within several clinics. And we have a lot of ongoing discussions on that one in various markets in the world. We continue then to have strong profitable growth. We have then managed to improve particularly the margins in Genetic Services. It was a relatively tough start during 2022. And we have now moved up and are above those targets that we have initially talked about, but given an EBITA margin of 25%. So we are well above that during the Q4. And also now at the Vitro Life Group, we are then A much better balanced company between both regions and business areas. On that side, with a third in Americas, approximately a third and in EMEA and then Asia will be a third. So we are much better balanced, and we will continue then to Build on the strength that we have because genetic services have a stronger position when it comes to Americas And legacy Victor Lab consumables technologies have a stronger position in some of the markets in Asia. So we will continue to build on our strength and work done on the commercial excellence with combined customers going forward. So For Marc, you do the next slide. Okay. We are on Page number 11 then. And it is a great pleasure that We were all informed yesterday that the Board has appointed Bronwyn Dofi as the new CEO. He will own the company at the latest of 1st August. We are all looking forward and thank you, the Board, for a good new CEO. Up until that time, the Chairman of the Board, current Chairman Board, Johan Sigursson, will go in as an interim CEO from 1st April. When that happened, current Board member, Henrik Blomqvist, he will step up and the Chairman of the Board from the 1st April up until the Annual General Meeting that is on the 27th April. And I, Thomas Atkinson then, will leave my position 31st March. Thank you very much. And then I will hand over to the operator for Q and A session. Thank you very much. The first question comes from the line of Susanne Kekbroner calling from SHP. Please go ahead. Hello. Susanna Craigbroner here from Handelsbanken. I have 4, but maybe I can take them 1 by 1. So first question, the pent up demand in China, can you provide a magnitude to this? And also, what's your overall capacity and access to components? Can you match the demand? No one knows the pent up demand. I mean, we are having discussions with customers and the customers They predict pent up demand because they have not been able to have customers traveling through some of the provinces, and that's Part of the situation in China where customers their customers are going to mainly if the can travels through the provinces. So there's a pent up demand. And then also that during the Q4 and you know well what happened at the end of Q4 and also the beginning of this year has been a situation where it's been more or less locked down and there has been clinics that has been shutting down totally. ADRES has been working under a lot of constraints. So yes, we believe a pent up demand. However, how much it will be, I don't want to do any projections, but we are planning for it. And we will continue our ambition that we have had in China, and that is to have a high service level. And then what is critical when you are dealing with the pent up demand, it is for the clinics to have access to from our side, for instance, the culture media, all of the media business that is necessary for them to do a cycle or actually to do a transfer then of those. So yes, we are planning for it. It can be a risk that if we are too optimistic, it can be scrapped. But I think we have a quite good control over that, yes. Great. Okay. And then on the genetic services in the USA, yes, you're feeling the price pressure on the PDTA test. Perhaps you could expand on the measures that you're taking to counteract this. And specifically, in the report, you mentioned selective approach Towards customer contract? Yes, yes. There are a couple of things that we have started. First thing is to work with what Patrick talked about operational excellence. When we are working with Services, the things that the team has done during the year to increase the profitability from genetic services It has been extremely good. In that situation, we are then working with changes on the laboratory structure, how you work inside the laboratory structures and also the customer side. What customer and where do we want to have what are the balance between growth and profitability? So there has been a clear growth focus from the earlier owners. Our focus is to have a profitable growth business. So some of the tenders where the PGTA, I'm only talking about PGTA, where the pricing are Not what we see sustainable then. We are going in and having a discussion with the customers. We will stay in this field. We will have better, let's say, less COGS, better profitability. So we will be able to change this business to a more profitable business. We are then experiencing that the same things is being done by the competition. There are companies that has come out with public information like in Q4 that they believe this field because they see that the prices has dropped too much and that it is not their focus business. So that's where we are in the PDTA. So it's only related to the PDTA larger clinics in U. S. Okay. And then as a follow-up on that, given the geopolitical Duration, which I suppose you're seeing effect primarily EMEA, but also maybe to some extent also in the Americas. Can you give us a share of the private and public clinics that you're supplying globally? Globally, 85, 15, around 85, public, 15. We I want to add one thing into that. Public is how we do definition within a well defined reimbursement system by the state. There are reimbursement system that is not traditional reimbursement system, but we have a growth of Insurance supported IVF, and that's being done in U. S. Through insurance companies, through the companies themselves that is adding that onto as a employee benefit. So let's say the 3rd party payments are increasing. So if we're increasing that Trend in some markets, I would like to say that we have probably come to a situation 80, 20, where 20 then is paid through that one. And then on top of that, you've spoken in the report about favorable reimbursement. Can you mention where you're seeing Large changes sort of beyond Japan. I that's the only qualified guesses. And I don't think it's going to be any changes within Europe as it looks like right now. And where I think that might some changes will come are in the territories where they are where the public side will come in. There's been a discussion regarding China. They started to do the test regarding Some reimbursement systems when you were in Beijing. Unfortunately, that happened at the same time as The COVID came, so they had not been able to do any conclusions if it works or not. They will continue that Let's call it a trial, and if that works out well, a professional guess is that China needs to support their demographic problem. Okay. Thank you. Thank you. Thanks. The next question comes from the line of Ulrik Trautner calling from Carnegie. Please go ahead. Great. Thank you very much. I have a ton of questions. So let's start off with consumables and Two questions there regarding both the product mix, given that you have NIVEA, your Illumina distribution test kits And your disposable products, you talked briefly about this during the presentation, but Has there been sort of a more tilted towards the alumina test kits that have affected sort of the margin profile? In addition to that, if you can just talk a little bit about the investment in production during the quarter, what that entails And when that will be fully operational? That will be my first question, please. Okay. Hi, Ulrik. Let me start with with your last question regarding investments. And I do my own guess just what you're basing your questions from, and that is from the gross margin situation. And The investments is not impacting the gross margin that is on the balance sheet. So what we have done this quarter And we started to do this actually at the end of quarter 1 last year when we saw an increasing demand and we Needed to do some investments and investment has been done from that time up until Q3 on machinery and those things. From Q3 forward, it has been to recruit people and train them and get them into production. So the scale up on the extra resources due to manpower and those activities It's not yet seen in sales. It's only extra cost on that side. Another side on that is that we have, during the COVID been forced, and I'm glad that we have been forced to do it, and that is to challenge our supply chain. And in the supply chain, whom are we going to be supplied with is to change part of the supply chain. And when you do that, You are also adding on expenses for people doing over time people working with regulatory extra people doing everything, the QA to get those new suppliers into and in changing part of the operational procedure inside the manufacturing plant. That is not anything you take on the balance sheet that has been put into the P and L then. So the gross margin drop This quarter is rare in such a way that it's coming from the consumer side. Product mix then to effect that is that with more disposable devices in some territories, This device has less margin than what the media has. To give some reflections on it, The very good growth of consumables that we have in Asia, for instance, are not coming only from media because media is a product where you need it fresh. So the earlier question that came from Handelsbanken regarding the pent up demand or not pent up demand if it's more disposable devices being there. And that is due to that they Today, have confidence in the markets. We're talking about Thailand. We're talking about all of those markets into the China that they're starting to perform more and more cycles. It's getting more to getting back to normal situation. So both the end user Clinics themselves and also the distributors are filling up their stock level. The vice versa has It happened in some of our distributor markets in EMEA, where they are sure upon their supply on the disposable devices. And then they don't need to continue to build up a security extra security stock level within the Great. Thank you. Just a follow-up question on that then. I know you don't really want to talk about Shy and I and I'm guessing it would be quite messy to decide for here in the quarter whether you have taken market Share from the production issues regarding Coke or if you're expecting to see further sort of positive effects from that Going into Q1, given that it is in this month that they are closing down production. I don't have any more information that you have, that they are closing down the production somehow. You know that the customers that has been using their products, they are Then question themselves whom they should buy from. With a producer less out of the market, Of course, it gives an opportunity for hopefully taking some more accounts. But let's see how would we work out. Okay, great. And just on China. Do you have a feeling sort of the current Right now, how are the IVF clinics reopening royalty? You've been high number of COVID cases. What's your impression right now on how China is developing? We had a meeting yesterday because we assume that, that should be a question from you and your colleagues. We'll try to be updated with the latest information. And just one statement, it's difficult to transform this into a number of cycles. But There has been large clinics, and we talk about large clinics that are performing more than many, many countries are doing in totally in Europe. They have had a situation where they have been running at the staff level at the worst week with about 20%. So 80% was called in sick. And currently, it is vice versa that 80% are back and 20% is Cool out sick and they believe that that's going to be that everyone will get there quite soon because they have had COVID. I don't know if that It's a general situation for the market, but that is what my colleagues are getting from the close contacts with the clinics. And you know then also the New Year is over. So it is many things that are that Sounds like there will be a trend upwards, if I put it that way. Okay. So you're up to rabbit, Potentially a good year then. So if I were to move on to the technology segment, and what I'm hearing is rather positive Signals from the U. S. Market. And you mentioned this on workflow efficiency. And this seems like quite a new sales approach From you guys moving this from an MD selection tool to a workflow efficiency tool. It's this trend. And when did you start to do this type of sales promotion? And if it's the first five we're seeing about Improved adoption of time lapse in the U. S. And the second question on technology and time lapse Is that how much of your revenues are software, disposable and services? Okay. Workflow is not a new thing. We have been working with that for many years. And let's say the first acceptance on those things has come from clinic chains that want to have a standardized situation and that they are not only favoring genetic testing. So I mean, it's been a mix between Scandinavian, UK and Australian side, and we have pushed that for some time in getting more confidence regarding it. And the situation right now is that We can provide the situation if the customers like genetic testing or they would like to have say morphology for the selection or they would like to have a better workflow and then decide what kind of selection tool that they will have. So The trend in U. S. Is well, we have jumped on that one. Let's put it that way. It's coming from the changes under COVID. We started before, but the customers realized that the changes over COVID has caused a difficulty for them to get skills there. And with Different tools, they can reduce the number of product system as part of the workflow. So that's more about the business case for them strictly on how to manage the laboratory, not so much about the selection. Great. Thank you very much. A few more questions from mine and then I'll start torturing you guys. So genetic services, and I think there is a balance here between growth and margin. And you mentioned That a few players have left the market. We have seen Progenesis leave the market. And My impression is that these are low margin contracts. Are these something that you're going after? Or is it purely a focus Profitable growth. And in addition to that, if you can give us some teaser on the current margin trend for Genetix Services In regards to your long term target for that business area, that would be very helpful. Okay. The last question there is easy to because we communicated this over this year when we have Started to do a lot of actions within the team to improve the situation by closing oncology, getting out of GPX business that is not here and doing all of those things is that we have said that We should increase the EBITDA level for the business up to plus 25,000,000 and we are higher than That, I can tell you that. And then we said that within next year, I mean, this is the year, this year, 2023, that we should reach a a number at least of 3 0 as the target. And we are well on that track. We are well on that track. And going into the situation about profitable growth, you are getting profitable growth if you can add something. Because if you don't add something. Why should a customer pay something extra? And it is a competitive market. And as you say, the spin situations where it's only been spinable price. And if that's the situation, Then we could deal with those, but then they will not get the same kind of service because the situation about doing a test itself and the COGS for the chemicals are quite equal between all the players. The question is, What are you adding on that the customer can get and what are they willing to pay for it? If they want to have support for Uniti Counseling, We will charge for it. If they don't want to have it, then we can do a test. But they will then don't They can't come and ask for anything more without having an extra charge for that. It is what it is in all other business. You will pay what you will be you will pay what you're expecting to get. And that's the biggest change within the eonetic services that to differentiate our offering with the correct pricing. And since you're talking about differentiating yourself and adding Additional value. Could you give us some more information on the Embrace product? The Embraer's product, it is in the phase right now where we are doing user studies. It is approved, so I mean everything, but we are doing user studies, but we have not yet done an official launch. And when do you expect that launch to happen? I don't want to give a clear number upon it, but it is within our plans to do it. Yes, let's put it that way. Because if I give you a number, you will then Write it down and then it's going to be like a wholly number. So it's better to say that we are working on it. We will come back. Great. That was all questions on my end. And since this is your last earnings call from us, thank you very much and wish you all the well in the future. Thank you. The next question comes from the line of Patrick Ling calling from DNB. Please go ahead. Thank you, guys. I have a few additional questions. Firstly, when it comes to China, that's what I've touched upon a few times when it comes to reimbursement there. I mean, are you picking up any signals that The government or the leaders in China are looking at more issues rather than Only reimbursement for IBS because when you look at why people do not You know, produce children, I mean, infertility is one issue, but financial issues, the fact that it's expensive to have children is also weighing in there. So given that we saw the population in China decreasing now for the first time in Many, many years in 2022. Are you picking up any signals that they are doing anything above and beyond, just Thinking about reimbursement for IFRS? Patrick, we are all following the discussions and what goes on there. I have no more insights than what you have. We all know that this is a problem related to Inconvenience of having more children in a society where if you are more than middle class that you have to work a lot and it is causing professional problems to have children there. That's something that we all know about and how they will solve it. Wow, that's difficult to predict, Patrick. Okay. Great. So the only thing that you have Picked up is really that they will restart reimbursement experiment as of now. Correct. Correct. Correct. Then I actually also had just a few housekeeping questions. When it comes to R and D, Patrick mentioned that you had changed the setup when it comes to some of the R and D now being done by external sources. Should we expect that the level that we see now in Q4 is more representative going forward than what we've seen in the rest of 2022? R and D is important. When we have right now Done some privatizations between projects. You are closing some that has been ongoing and then you are starting up some others. The real cost for R and D, and you're well aware of that, is that when you have something where you go out and do clinical Testing, we are coming into a situation where you need external inputs that you have to pay for. And We have said before that what is a reasonable level for a company like us to have a long term R and D cost, somewhere between 5% 7% long term. I think that is a good, good That's where we should be and what we can afford to do. But just to add to that one, I mean, the setup that we now have gives So it's, of course, a great benefit and opportunity here where we could then work more focused then when it comes to the scientific side with various kind of agreement and then also on how we're then focusing on the more applied development. So this is a good structure that we now have implemented on that front. Okay. Great, great. I get it. Then also had a question on the financial net. You had some FX Back there. Could you just highlight a little bit what we should expect in the, say, in the next coming 2 quarters, assuming that currencies remain at approximately the current level? Yes. Well, if the currency is I mean, the underlying thing is that we have Internal loans that basically gets revalued then in U. S. Dollar. So it's the euro dollar impact that you have seen during the Q4 on that side. So given that the currencies will be as they are today, there will be no impact on that side. So But it's a euro dollar exposure that we have in the loan internal loan structure that we have on that side. So yes. Okay. Great, great. And then lastly, tax rate wise, you mentioned that there was some one offs this quarter pushing it upwards. So is it reasonable to assume a single tax rate as before going forward? Or Should we assume something else? Yes. The question is what you then referred to as before on that side. Well, 24%, 25%, something like that. Yes, something like that. I mean, as you know, I mean, the tax rate has been, call it, a bit volatile during the quarter, if you look on that side. Now also then with the acquisition then on the new Victor Life Group, we have then taken a capital of actions and What you see in the numbers during the Q4 and, of course, for full year is a conservative approach on the capital action that we have done. So You should expect a lower tax rate going forward in the neighborhood that you talked about. Okay, great. Right. Those were actually all questions from my end as well. And also for me, good luck with everything you Plan to do now, Thomas, after you step down as the CEO. Thank you. Thank you, guys. Thank you. Thank you. Operator, are there any more Q and A? Or can we end this We currently have no question coming through. Okay. But it is it's 10.50 right now, sir. Let's only have one more question. There are no further questions. So I will hand you back to conclude today's conference. That's great. Thank you very much. In that case, if someone has been taking the time to call in and listen to us for 15 minutes, We appreciate that. And thank you very much for this session and bye from Patrick and myself. Thank you. Bye bye. Thank you for joining today's call. You may now disconnect.