Earnings Call: H1 2021

Aug 19, 2021

Good morning. I'm the Orchidene operator for this conference. Welcome to the Geberit conference call on the half year results 2021. Please note that for the duration of the presentation, all participants will be in a listen only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. And on their telephone. This call must not be recorded for publication or broadcast. At this time, I would like to turn the conference over to Mr. Christian Buhl, CEO, accompanied by Mr. Roland Iff, CFO and Mr. Roland Seele, Head of Communications and Investor Relations. Please go ahead, sir. Thank you for the introduction. Good morning, ladies and gentlemen, and welcome to Geberit Interim's conference call. Geberit achieved an exceptional First half of the year extraordinary results with strong growth rates and record profitability levels. Net sales grew by 23% in local currencies, the strongest growth since the IPO 20 years ago. EBITDA grew by 36% and the EBITDA margin reached a new record level of 34.2%, 270 basis points above last year's level. Driven by the strong top line growth and the further improved profitability, net Income increased by 46% and EPS by 48% in the first half of the year. Let me now start our review with a few comments on our sales development in the first half of the year. Net sales in Swiss francs increased by 25% to CHF1.83 billion. In local currency, net sales increased by 23%. Main drivers for this exceptional strong growth across all regions were a base effect From the COVID-nineteen crisis hitting our business as of mid March last year. Secondly, a strong home improvement trend induced by the COVID-nineteen lockdown and thirdly, inventory build ups and pre buying of customers due to our extraordinary price increase implemented as of July. Compared to the first half of twenty nineteen, Net sales in H1 grew by 17% in local currencies. This 2 year comparison With the pre crisis level of 2019 demonstrates the market share gains we have achieved during the COVID-nineteen crisis. We achieved this exceptional growth despite significant challenges for raw material availability and global logistics capacity. This is only possible thanks to our regional supply chain setup, strong relationships with our suppliers, Long term capacity planning and a high flexibility of our employees. Let me now comment on net sales growth per region for the first half of the year, again in local currencies. I start with Europe. The degree of local lockdowns last year varied substantially by country, leading to different base effects this year. In markets where construction sites were partially closed in Q2 last year, We achieved correspondingly extraordinary strong growth rates this year. These countries include Italy with plus 52% UK with plus 47 percent De Beer Peninsula with 32% and France with a plus of 29%. In the remaining European countries, the COVID-nineteen base effect was significantly lower due to the major restrictions on construction activities last year. These countries delivered correspondingly lower, but still very strong growth rates, namely Germany with a plus of 16%, Switzerland with plus 14%, Benelux with plus 13% and the Nordics with plus 10%. We achieved extraordinary growth rate of 44% in Austria And the 31% in Eastern Europe, despite a limited COVID-nineteen base effect due to more pronounced corona stimulus programs and ForEx induced price increases in several Eastern European countries. Let me now turn to the regions outside Europe. Net sales in Middle East Africa region increased strongly by 53%, mainly driven by the base effect from South Africa, where sales came almost to a standstill in Q2 last year due to the COVID-nineteen lockdown. Net sales in Far East Pacific were up by 39%, also substantially driven by the Positive base effect from the heavy lockdown in India last year. In North America, net sales increased by 12%, driven by strong growth of electronic phosphates. Let me now comment on the Phase Development product area, again in local currencies. All three product areas delivered strong growth rate in the first half of the year. Installation Flushing Systems Grew by 24%, Piping Systems by 22% and Bath Storm Systems by 21 Let me give you now some comments on the sales development in the second quarter. In the Q2, net sales increased by 38% to CHF 924,000,000. In local currencies, net sales increased by 34% in Q2. Even compared with Q2 2019, Again, without the base effects from COVID-nineteen, net sales grew in Q2 by 20% in local currency, also a record growth rate over 2 years period. The 3 product areas showed different growth dynamics in the 2nd quarter. While installation and flushing and piping systems grew with 38% each, bathroom systems grew somewhat lower with plus 26%. The main reason for this difference was the extraordinary price increase as of July, which was only implemented for installation and flushing and piping systems, but not for bathroom systems, which therefore did not benefit from prebuying effects in Q2. Let me now comment on the operating and financial results in the first half of the year. EBITDA increased disproportionately compared to net sales by 36% to CHF626 1,000,000. Compared to the pre crisis level of H1 2019, The increase amounts to 25% over the last 2 years, demonstrating our strong operating cash flow generation throughout the COVID-nineteen crisis. The EBITDA margin reached 34.2% in H1 'twenty one, which is 270 basis points above previous year's level. The main reason for this margin improvement was the operating leverage from the extraordinary strong volume growth. This demonstrates the strength and the high flexibility of our operations Being able to react to a sales collapse last year in Q2 and now to an unexpected extraordinary strong volume growth The strongest negative impact on the margins came from the substantially increased raw material prices since the beginning of the year. Also increased and almost normalized marketing costs had a negative impact on the margins. Personal health costs increased mainly due to a base effect from the low level last year. The positive currency effect of +2.3 percent on net sales in the first half of the year had no impact on the EBITDA margin due to our natural currency hedge. EBIT increased in the 1st 6 months of the year by 42% to CHF546 1,000,000. The operating leverage led to an EBIT margin increase of 3.50 basis points to 29.8%. Net income increased by 46% disproportionately to EBIT to CHF 460,000,000 due to a lower tax rate driven by positive onetime effects and a better financial result from less foreign exchange losses this year. Earnings per share increased by 48% to CHF 12.94 positively affected by the share buyback program. Compared to the pre crisis level of H1 2019, the increase of EPS amounts to 28% over these 2 last years, demonstrating the strong value creation during the COVID-nineteen crisis. We continued our share buyback program in the first half of the year and bought back another 124,000 shares. In total, 218,000 shares for a total consideration of CHF125,000,000 have been bought back on the share buyback program launched in September 2020. Free cash flow increased In the first half of the year by 88 percent to CHF328 1,000,000, mainly driven by the extraordinary strong cash flow from operating activities. Let me now comment on our outlook for the remaining year. The unexpectedly strong performance in the first half of the year has demonstrated how difficult and unpredictable An outlook in the current environment is, the uncertainties around the COVID-nineteen pandemic and the economic impact, Positive or negative are still very high. This unprecedented market environment combined With the general very low visibility of our business, with a typical order book level of 2 weeks, makes an outlook very challenging. Also the question when and how the home improvement trend might come to an end after the release of the lockdown creates uncertainties. However, under the assumption of no materially different business impact From the COVID-nineteen pandemic, we expect after 4 consecutive strong quarters and normalization of the building construction industry during the second half of the year, leading to substantially lower growth rates. In July, We have already seen a substantial slowdown with only a single digit growth rate. In the first half of August, The dynamic further weakened. Based on these results and assumptions, we expect a substantial slowdown of our business in the second half of The year compared to the first half of the year. For the full year, we therefore expect A low double digit net sales growth in local currencies and an EBITDA margin at the upper end of our midterm target range of 28% to 30%. The main reasons for weaker sales and margin outlook in the second half of the year Besides a normalization of the building construction industry, our pre buying effects in Q2. Secondly, A stronger sales comparison base driven by the catch up activities and strong development in the second half of last year. Thirdly, investments into digitalization and the further normalization of marketing costs. And fourthly, An ongoing strong increase of raw material prices, which we expect to be around 6% in Q3 compared to Q2 this year. Let me close my introduction with a short summary. Geberit achieved exceptional and record results in the first half of twenty twenty one after having delivered already strong results in H2 2020. The comparison of the results with pre crisis level 2 years ago confirm our ability to deliver extraordinary results and gain market share in a challenging and tough environment to maintain our market leading productivity and efficiency level Despite the business volatility never seen before in our usually very stable industry, and finally, also to create substantial cash flows and shareholder value in an absolutely exceptional economic environment. The results over the last 12 months Confirm us in our crisis management and the key decision we have taken since the outbreak of the COVID-nineteen pandemic and give us confidence to continue to emerge stronger from this still prevailing unprecedented environment. Thank you for your attention. We are now ready to answer your questions. 21. And the first question is from Ives Bromhead, Exane BNP Paribas. Your line is now open. Good morning. Hope you're well. Thanks for taking my questions. My first question is just on the comment you made, Christian. You alluded to the slowdown in organic growth in July. I think you mentioned that this actually worsened in August, if I understood Correctly, I'm not sure I got that right. Just to be clear, are we talking like for like growth or are we talking volumes In terms of the single digit that you're mentioning, that would be my first question. My second question is on the input cost inflation. With steel prices, which haven't really normalized as Some would have expected. Is there any ability for Geberit to announce any further price actions later this year? Or are you looking to stick to your current pricing strategy in July? And lastly, Just in terms of the load factor of your capacity, with the current demand that you're seeing, which is, as you mentioned, quite exceptional, Can you maybe help us to understand how loaded your facilities are and whether You need to increase capacity if your outlook medium term is still towards medium term volume growth. Thank you. To your first question, yes, In August, in the first half of August, the growth dynamic further weakened compared to July, and we refer to the net sales growth in local currencies. To be a bit more precise, in July, we have seen still a high single digit growth rate, but a further weakening in the 1st 2 weeks of August. The second question, at the moment, we do not plan or foresee another extraordinary price increase driven by the still strongly increasing raw material prices. And question number 3, yes, our plants are fully loaded, But we are able to manufacture and to deliver the product despite the strong demand. The bigger bottleneck in the first half of the year was the raw material availability, which was and still is a significant challenge to get all the material to manufacture, but it is not a bottleneck of our plans. We are not planning significant capacity expansion driven just by the strong demand in the first half of The year that is more or less based on our long term capacity planning, which enables us to cope with this very nice strong growth and demand in the first half of the year. Great. Thank you very much. Welcome. The next question is from Martin Hutzler, Zurich Pantelarbank, your line is now open. Yes, good morning and thank you for taking my questions. The first one is a question on the demand from the commercial sector, hotels and such. I was just wondering Whether you saw also there quite a pickup in the second quarter, in the first half and What are your expectations for the full year? And the second question is turning to your Statement that you, if I understood correctly, increased prices in certain markets, Eastern Europe Due to FX impacts, can you maybe elaborate this a bit? And is this roughly valid for 10% of overall sales and by how much did you increase prices? To your first question, We have seen in the Q2 a slight improvement of the project business, which is also visible that the Piping business went again a bit better. But I think it's still too early to really believe that the project business has really normalized to pre crisis levels. So first signals in the second quarter, but I don't think that we are already able to have An outlook or a clear view on the second half of the year for the project business. The ForEx related price increases In Eastern Europe, we're driven by obviously the devaluation of some of the Eastern European currencies, for example, the Turkish lira or the Russian ruble, where we increased our prices just driven by these forex devaluations to safeguard our margins. But I can't give you a figure how much of the growth in Eastern Europe was driven by this ForEx induced Price increases because obviously that's county by county very different. So I'm sorry, I can't provide you a figure. Yes, I didn't mention or didn't mean that the sales increase just by how much Lastly, where the price increases is in the area of 5% to 10%? Yes. I think that's a fair assumption again. It can't be different, but it's around 5% 10% and it's not a mathematical exercise, but obviously we try to safeguard our margins. That's what I said before. So if the devaluation Of the ruble has a certain magnitude, we try to compensate that with price increases in these rather smaller countries. Okay. Thank you. The next question is from Yassine Toure, On Field Investment Research. I would have three questions. My first question is that could you quantify the raw material cost inflation that you're Hi, the raw material cost inflation that you experienced in H1 and in the one that you're And also could you remind us the price increase that you were able to pass in H1 and the year on year price Chris, that you were expecting in H2. Then my second question is on your guidance. You're suggesting like for like sales growth of A bit more than 10%, margin close to 30%. Is it right to suggest to understand that your guidance is Suggesting a double digit EBITDA decline in H2. That's what I get when I do the math. I just want to be sure about this. And my last question Is on the European regulation, we see a lot of things moving fast with this FEED455 project. What's your first take on the new regulation? And do you see any benefit in Your first question, the raw material prices in the first half of the year increased by 6 point 9%. And as said during my introduction, we expect for Q3 An increase of around 6% versus Q2 this year. The second question around price increase this year. We had a regular price increase as of April this year of around almost 1.5%. And the 2nd price increase was an extraordinary one, which we implemented as of July With 3.5%, but only affecting 2 product areas around 60% of our business. The second question, I don't know exactly out of my mind if that is true, but I think you should take our guidance to make your math, you can do that yourself. Obviously, I don't know. And number 3, the European regulation on sustainability, what do we believe in terms of impact on our business? We believe this has more or less a neutral impact. On the one hand side, the positive one because this will trigger obviously construction activities, mainly renovation activities. On the other hand side, most probably a lot of investments will go into energy saving topics. And as you know, we are not really delivering directly Into this topic with our products, therefore, that's rather negative impact. All in all, we expect a neutral impact from this further expanded regulations in The next question is from Remo Rosenaut, Deutsche Bank. Your line is now open. Yes, thank you. On Slide 8, with the EBITDA margin bridge, you showed a net Negative price effect of 0.7% for the first half, mainly due to the higher raw material prices. Now the first question is, what would be the gross effect on the margin bridge of the just of the raw material price increases on the margin? And could you also differentiate between Q1 and Q2 in that respect? That would be the first question. Then the second question, you expect a further negative impact in the second half. You mentioned that You expect a 6% further increase of raw material prices in Q3 compared to 6.9% in Q2 or H1. However, you will also have the effect of the 3.5% price increase as of July, which is a bit counteracting here. So taking altogether, the net price effect in Q3 Should not really be higher than in the first half, is that a correct assumption? And then the third question is On the pre buying effect of the Q2, do you have any guesstimate how much that could have been On your organic growth, I mean, is it rather 3% or is it rather 15%? Thank you. Question number 1, the impact of the raw materials In the first half of the year on the gross margins, obviously, if you take the 6.9% raw material price increase, You apply it to our raw material costs, then you see the rough impact on the gross margins. And differentiated by Q1 and Q2, In the Q1, the raw material prices this year were 2.4% above previous year's level, so Q1 2020. And in the Q2, raw material prices were 11.3% higher than in the Q2 of 20 '20, together the 6.9%. The second question, if I understood correctly about the net price effect In the second half of the year, which is driven by a further increase of the raw material prices and somehow compensated But the extraordinary price increase as of July, but all in all, we still believe that will lead to a clearly negative net price impact In the second half of the year or in other words, we do not expect and we did also not plan for a full compensation Of the increasing raw material prices with our extraordinary price increase. Why? Because we Benefited over the last couple of years substantially from lower raw material prices and we also want to invest into our customer relations. And the third question around the quantification of the pre buying effects in Q2, I would love to give you a figure, but we don't have a figure Because we actually really do not know. It's just what we hear from our customers. And obviously, they do not provide us with this information. So I can't give you a quantitative Okay. Thank you for that. Just on the second question again. I understand that you're not planning for a full of the raw material price increase effect. But still making the taking all elements into the equation, At least we should not expect a significantly higher net negative price effect in the second half compared to the first half given the 3.5% price increase. Is that correct? Maybe if you have the presentation in front of you on Slide 9. We show our raw material price index, what we are really paying. And you see that we have more or less a straight line in the first 7 months, a very steep straight line. And there you see also compared to the price index of 2020 That the impact in the second half of the year is substantially higher from our material prices than in the first half of the year and also the substantially higher impact will not be compensated by the 3.5 price increase. Okay. We leave it at that. Thank you very much. You're welcome. The next question is from Christian Arnold, Stifel. Your line is now open. Yes. Good morning, gentlemen. A clarification question. First, on your comment on August, you were saying it was weaker than in July. But can I assume that August, the first half, was still in positive Territory? Correct. Correct. Correct. Thank you. Second question would be, You were saying that Bathroom Systems did not profit from pre buying effect as you haven't increased prices compared to the other two segments. What about differentiation between the countries in terms of rebuying effects. Can you comment on that? There were small tactical differentiations between the countries, But they are very minor. So there's nothing material, which I think is worth to notice. So You can assume more or less price increases across the countries, minor tactical differences. Okay. Maybe last question on Bathroom Systems, again, shower toilet business, still growing double digit? Yes. And no weakening of the momentum there? No, we haven't seen a weakening of the momentum. Obviously, we have some effects because you might remember we had some delivery issues last year, so some base effects. But if you look at the fundamental demand, no weakening over the last couple of quarters, very nice double digit growth. Thank you very much. Welcome. The next question is from Arnaud Lehmann, Bank of America. Your line is now open. Thank you very much. Good morning, gentlemen. I guess, three questions from my side. I'm sorry, the first one is just coming back on your guidance and following up from the Yacine question. The if you end up at 30% margin, top end of your midterm range, that would imply that the second half We'll be not only below last year, which would make sense, but also slightly below the second half of twenty nineteen. So Is that a scenario that you think is realistic, I guess, mostly due to the cost inflation? Are there incremental cost relative to the second half of twenty nineteen that we need to keep in mind. The second question is just coming back on your First half margin and the volume and mix effect, the 4.90 basis points that you mentioned as a positive from volume and mix. Could you give us an idea of the mix effect within that and maybe expand which type of products are you selling more, which have a positive impact on your margin and that which might be more sustainable going forward. And lastly, Just coming back on your raw materials, you gave a useful chart showing the trends. Could you please remind us the key components Of this raw materials index, I'm thinking, I guess, brass, steel or if you want to be more precise on that, that would be helpful. Thank you. I'll start with the second question. The 4.9% volume and price mix effect in the First half of the year, the vast majority of this effect is a volume effect, the much smaller effect are product mix effect. The product mix effects are coming across the board, typically also from bathroom systems, where we see continuous upselling of our solutions very much driven by end consumer preferences. The third question About raw materials split, 40% of our raw material purchasing are exposed to metals, 25% to plastics and 35% to the rest, which is packaging, electronic components and so on. And can you briefly repeat the first question? Yes. I was trying to understand based on your guidance, Your margin in the second half could be below last year, which makes sense, but also below the second half For 2019. Yes, that's true. That's true. And the main reason is because raw material prices are also substantially above the level of 2019. Makes sense. Thank you very much. The next Question is from Manoj Buryat, Societe Generale. Your line is now open. So yes, so good morning. So my first Question is on the volume growth, I mean. So if you see your full year guidance, so what is the volume growth versus 2019 to make it very Clear because in the first half, I think you did a volume growth of something like 14% versus 2019. So do we see in the full year maybe like double digit or really going down to high single digit? So this is the first question. The second one is also wanted to understand when you talk about 6% First question around volume growth in H2. I don't want to go into further details because the uncertainties are simply too high, and that is the reason why we are guiding for low double digit Net sales growth in the second half for the full year, sorry, for the full year, but I don't want to go into half year guidance for volumes Because uncertainties are too high. And the second question, I didn't really understand. What did you Yes. So you said raw material should be up 6% sequentially, that is versus Q2 2021. But how does it translate when you do it on a Y o Y basis versus 3Q 2020? You can do that exercise yourself. Again, take Slide number 9 from our presentation, then you can draw your line what you believe will happen in the Q3 and you see the difference To the quarter So does it imply like because Q2 was up 11% and I see like similar Last year Q3 versus Q2, so does it means like 16%, 17% raw material cost inflation, y o y? I didn't make the math, but you can as I said before, you can do it yourself with Slide number 9 in our presentation. It might be something like that. Okay. Yes. Thanks a lot. You're welcome. The next question is from Martin Flickinger, Martin Kluge from Kepler Cheuvreux. So I have three questions as well. And the first one, Apologies as a clarification question because the acoustics in my line were pretty bad. Could you just clarify what you We said in terms of organic growth rates or areas of organic growth rates for July August, I understood high single digit growth in August. Or was that July? Could you just clarify that to be precise? That would be my first question. The next And second one is on the Geberit 1 bathroom series. I heard you talking about ongoing strong moment On the line momentum in Charlotte. I was just wondering what the latest developments are in Geberit 1? That will be my second question. And then the third one, I guess a housekeeping question is, What have been the latest numbers on installed order books in Germany from the summer survey? Thank you very much. Question number 1. In July, the net sales growth was high single digit. And in the first half of August, we have still seen growth, but again, a further weakening of growth in the first half of August. Question number 2. Geberit ONE is doing very well. We are very happy. Growth is very nice according to plan. And the third question, the current order book level of installers Stays at a very high level in Germany of 14.6 weeks, also confirming the strong home improvement trends in Germany. Okay. So that 14.6 percent, that's basically unchanged. I think it was 14.5 percent, right? Is that correct? Yes. But you have always seasonal So compared to previous year, it's about 13% higher. So without seasonal effects, It's an increase. Okay. And on Geberit ONE, I guess, it's doing very well coming although coming from a low base. And so My assumption, and please correct me if I'm wrong, is that from a group perspective or even from a product area perspective, The growth contribution was probably not clearly visible, am I right? That is correct. It's still not a material impact on group level. This is correct. Thanks. The next question is from Alessandro Foletti, Octavian. Your line is now open. Yes, good morning. Thank you for taking my questions. I have 2 actually. We've been speaking a lot about raw material prices, but you mentioned at some point in your presentation that marketing costs It started to normalize, but then afterwards you mentioned that there will be a further normalization in H2. So I was wondering if you can give an indication on marketing costs, travel expenses because I believe Somewhat they are related. And then afterwards, the second question will be on personnel. You said that Personal cost was actually lower this year. But at the beginning of the year, you mentioned some inflation level on the wages. Can you give an indication over here how the personnel costs will develop? First question around marketing. We have reached in the first half of the year almost Pre crisis level in terms of marketing expense, that's the reason why I talked about the normalization. And we expect a further normalization in the second half of the year, At least meaning as being at least at this level of the first half of the year, even maybe a little bit higher if we are able to find good ideas. I give you one We are running a dedicated home improvement marketing campaign due to this current environment. And depending on the further development, we are also ready to spend some more money there to benefit from this market trend. Travel costs obviously depend on traveling. We don't know if we are able to travel or not. This year, it was still very difficult, obviously. We have savings of around CHF 3,000,000 per quarter in this environment of limited or almost no travel. Personnel cost inflation, we have seen an inflation wage inflation driven by tariff increases In almost all our countries by around 1.5% in the first half of the year, that is also what we expect for the full year. Okay. Thank you very much. The next question is from Matthias Baifenberg at Deutsche Bank. Your line is now open. Yes. Good morning, gentlemen. Two questions from Arthur, if I may. The first one is really on the home improvement trend. You said It's tough to kind of when this is going to be slowing down. And then we heard your elaborations on July August. How much of that weakening is actually based on craftsman taking holidays versus not taking holidays last year And people spending disposable income on holidays rather than bathroom renovations. And with the 4th wave Searching selectively in a couple of countries, isn't there a chance that people go back renovating the bathrooms in the fall and in the winter? And the second one is on the share buyback. Obviously, you've been pretty solid in your view to Continued the share buyback with the shares up 38% year to date and obviously beyond all the Street Price targets, but how do you think about the share buyback with weakening dynamics and obviously the shares being on top of the range on 27 times So EBITDA in terms of valuation? Thanks. I take the first question and number 2 will be answered by Roland A very difficult question. Actually, I don't know what exactly happened on this granular level of your question in July August. We just don't know. And also for the outlook of the home improvement trend for the second half of the year or maybe even autumn and winter, I don't want to speculate. And I think The last half year, the last 9 months have demonstrated that we should be cautious With any outlooks and therefore I don't want to speculate what happens with the home improvement trend in the second half of the year, what happens with a 4th wave, what will be an impact Of seasons like autumn and winter, so I'm sorry, I can't give you a precise answer here. And related to the share buyback, when we announced share buyback, we are not then tactically looking at the share price. When we implement it, Our target or our strategy is to achieve the communicated target, in this case, to buy back CHF 500,000,000 In the over 2 years, we delegate these days the share buyback programs to a bank, which executes this for us Based on certain targets we are giving to them, so then those tactical, let's say, Changes in the quantities, in the daily quantities are not up to us. It's up to the bank, which is executing the program for us. But they have the target to Thank you. The next question is from John Rivell, Thompson Reuters. Your line is now open. Good morning. Thanks for taking my question. I I was just wondering, you're expecting a slowdown in the second half of the year. Is there any kind of numbers you can attach To that as yet? And also what's the kind of long term kind of growth potential do we see to kind of your products in the building industry after we've done this rebound from the COVID downturn last year? That's my first question. And the second one is, could you just clarify again also The price increases, it was a 1.5% increase in April and 3.5% in July for what? What was the 3.5% in July for? I didn't I get that. Thank you. First question, we do not expect A long term structural impact of this crisis on our business, therefore, we also not change our midterm Plans and growth expectations, we still also with this crisis and after this crisis, we expect Midterm growth rate of 4% to 6% in average across the cycle. And the second question, the 3.5% price increase was only applied on 3 product areas on installations and flushing systems and piping systems, But not applied for taxes. Okay. Thank you. The next question is from Charlie Fermberg, AWP, Vineland. Your line is now open. Good morning, gentlemen. Given the strong growth this semester, did you see any bankrupts? Did you lose any competitors during the crisis? Thank you. Sorry, I didn't understand. The line is quite bad. If you lost any competitors during the crisis, given the high growth you have. If we lost competitors? Yes. What do you mean by losing competitors that they went bankrupt? Exactly. No, no. We didn't see that or at least Not a bigger one, no. Okay. Thank you. So far, we have no further questions. This seems not to be the case. Thank you for your questions. We wish you All have a great day and thank you for your participation. Goodbye. Ladies and gentlemen, thank you for your attendance. This call has been concluded. You may disconnect.