Hi, everyone, and thank you for joining us today. Apologies for the slight delay. Welcome to Strauss Group fourth quarter and fiscal year 2022 results virtual conference. Following management's formal presentation, we will conduct a Q&A session. Please feel free to post any questions you may have in the chat box or via my email or WhatsApp. As a reminder, this online Zoom conference is being recorded today, Thursday, March 23rd, 2022. I would like to remind everyone that this online webinar may contain projections or other forward-looking statements regarding future events or the future performance of the company. These statements are only predictions and may change as time passes. Strauss does not assume any obligations to update that information.
Actual events or results may differ materially from those projected, including as a result of changing industry and market trends, reduced demand for our products, the timely development of our new products and their adoption by the market, increased competition in the industry and price reductions, as well as due to risks as identified in the documents filed by the company with the Israeli Security Authority. Online with me today are Mr. Shai Babad, our new CEO of Strauss Group, Mr. Ariel Chetrit, Group CFO, and myself, Daniella Finn, Director of Investor Relations. As usual, we shall start with a recap of the quarterly results by CEO Shai Babad, then move on to the financial highlights of the quarter presented by CFO Ariel Chetrit. Shai, please go ahead.
Hello, everybody. Put the presentation on.
Ariel, if you'd like to share the presentation, please.
There we go. Thank you very much. First of all, it's very nice meeting you all. Hopefully, we'll get to do that in person in the future. I'll introduce myself a little bit. My name is Shai Babad. I've been the new CEO for the past four months here in Strauss. Before that, I was the CEO of Blue Square Holding Company here in Israel. Before that, I was the Director General of the Ministry of Finance of Israel, responsible for the budget and the economic reforms of the Ministry of Finance here in Israel for more than five years. I started my professional life in the private sector, working as a strategic consultant, working at Apax as a consultant as well, and in the venture capital. I have spent eight years in Zim, in the shipping company.
There I had, I was in two major positions. The first one was the head of the budget and economic division in Zim. The second one was the CEO of Zim Israel and Near East, responsible for the activity of Zim in Israel and 23 countries in the Mediterranean and Eastern Europe. That's my, you know, my professional life. In my personal life, I'm happily married to a wife. She get a trophy to be married to me. I have three daughters at the age of seven, five, and a year and a half. That means that for the past seven years, I haven't slept a lot at night. I'm now negotiating the fourth with my wife. Unfortunately, it doesn't seem that it's going to happen since I'm losing this negotiation. That's a little bit about me.
Talking about 2022, I thought that I would just share with you the major stories that I've seen in 2022 and what happened to us this year. Ariel will go deeply through the results, then we can open it for some questions. Ariel, can you move to the next slide? Thank you. The first thing I think that was very influential in 2022 is us, Strauss, defining our journey. We defined that our purpose is nourishing a better tomorrow. We said that everything we're going to do, every action that we take, every business opportunity we pursue, our strategy, is gonna be driven from that purpose of nourishing a better tomorrow.
I think that with what happened to us later on in 2022, we actually implemented that purpose of how we nourish a better tomorrow with handling the recall and everything that happened to us in Israel. I thought that I should stop a second and point this out because I think this is a major path and a major compass for everything that we have been doing in 2022, and also everything we are going to do in the future. Next. We can't talk about 2022 without talking about the recall. I think one of the major things that affected our results, if you look at our results, which we published today, so our net revenue grew to ILS 9.5 billion in 2022, which is a 6.5% growth.
On the other hand, our net profit declined by 73% to ILS 174 million. You can't talk about this decrease in profit without mentioning what happened to us in our confectionery plant in Lower Galilee, in the north of Israel. This, of course, impacted our results by approximately ILS 300 million in net profit. You can see the drop in market share, which has happened to us during 2022 and the time it took us to get back. The good news are that looking into 2023, you can see already that in March 2023, we managed to gain back our market share back to 24%, whereas the market share was 28% before the recall. We almost there, we almost got back to where we were.
This has been a very good sign because the factory's only been working for three and a half months, and we've been managing to get back on the shelf rather quickly, much better than we expected. Unfortunately, this of course affected us in 2022. Next. The second big story about 2022 is, of course, Sabra. Sabra had consequential events, which was started with the FDA letter and then carried on with the pipe bursting and causing all the damage at the factory and all the refurbishing.
Refurbishing
... refurbishing that we needed to do in the plant there. The meaning of that was that, of course, for a couple of months, the activity was shut down, and then we slowly tried to get back. Unlike the confectionery, this has been a gradual and slow getting back. We managed to get back to 37% already, almost 38% in February, and this has been increasing slowly. We got back to being number one in the market, but there's still a long way to go. Before those events, we were more than 60% market share, and we still have a long way to go going back. This of course affected our results with the $54 million loss.
Our share is 50% out of that, which is approximately ILS 105 million, which affected our net profit results. The third thing that affected our profit results was our capital gains from Hamama, our food tech activity, our investments in the companies of the Hamama, the Kitchen, as we call it in English. We had a lot of profits in 20 and 21 through their raising rounds.
Capital fundraising.
Capital fundraising through the rounds that they did. In 2022, we didn't have as such rounds. Of course, the profit went down as well. Those three major issues, the confectionery, Sabra, and our Kitchen activity, affected mostly our net profit. That's why you see the decline. Another thing which affected us, next slide, is of course. Next slide. Another thing which affected us, of course, is the economic turbulence. The macroeconomic conditions have been changing drastically, as you can see. Inflation has been picking up everywhere in all the geographies that we have activity in, that we are operating in, Israel, U.S., Brazil, Russia, United Kingdom and China. In all of them, you can also see what happened to the interest rates.
In Israel, the basic rate jumps from 0.1 to 4.25. That, of course, has a tremendous effect on our activity. Also, you can see the cost of raw materials, what happened to raw materials in coffee, which Ariel will go deep in just a second when he goes through his presentation. You can see that affected our results, especially here in Israel, where we can't do a recovery on price increase. It also affected our very good results that we had in Brazil with the price increases that we have done there. You can see also, raw materials, our milk cost here in Israel, which rose a lot as well, and our ability to cover up those costs was also limited and of course also affected our results. Next, please.
Looking at price increase, overall in our international activity, whether it's Brazil, Europe, China, US, we have managed to gain back, especially in Brazil and Europe. We've managed to gain back all those price increases by our price increase. All the inflation that hit us were actually covered by the price increases that we have made. Approximately, ILS 780 million of inflation that we have encountered, and we have managed to raise prices by approximately ILS 1 billion. The story of the inflation is mostly here in Israel, whereas the impact was approximately ILS 300 million in those years. We only managed to raise by 2.9%, which covers only a small portion out of that impact. We will need to go through very extensive...
We already started in 2022, we are continuing in 2023 to go through very, very extensive productivity plans in order to make sure that on the one hand, the price raise that was done in December will fully implement in 2023 and will have its impact on 2023 results. On the other hand, because price increase is not enough, we will need to go through very extensive productivity plans and targets to make sure that in 2023 we cover all the inflation that we will hit us. Next. Just looking inside in our to what we have done internally. We also launched our strategy, our growth strategy in 2023.
The growth strategy was broken down into three sectors: renew the core, expand geographically, and build new horizons. When we look at renew the core, we looked at the activity which we wanted to divest from. We did divest from Obela, from our Central Europe salad activity, Hummus activity. From that, we have divested. We also looking at very much at productivity and how to optimize our portfolio, and this is a lot of work that has been started in 2022, and we carry through in 2023. In expanding our geography, expanding our activities, we are trying to find the categories that are adjacent to the core that we are expanding. For instance, in Israel, we are doing the plant-based activity, which grew, started to grow in 2022 and will continue to grow in 2023.
We also have some activity in China and beyond coffee in Brazil, categories which we are going into. When we are looking into build activities, of course, Kitchen number 2, the second round of Kitchen and food tech investments that we are going through. We also launched a unit inside Strauss that help us build new businesses. Right now, we are looking into the new trends of milk without cow, it's called. Milk without cow. That's the translation.
Milkless cow.
milkless cow. actually cowless-
cow-less milk.
Cow-less milk. It's in the opposite. Yeah, cow-less milk, which means that we are producing the proteins of milk without actually using real cows. This is where the future trends are going, and we are very much investing into that. Looking into the transforming, one of the things that we said in our strategy is how we transform the way we operate. We've changed the structure that we operate in. We decided that in order to tackle all, like, external obstacles that are coming in our way, we need to, one, become very much customer-centric with all the competition that is raising here in Israel. We changed the structure of how we operate.
We built a new department, operational department under the CEO, which will carry through all the productivity that we need to do and also drive us into operational excellence. That was done under the Deputy CEO, which today is responsible for all our operational activity from the supply chain, logistics, procurement, and of course, manufacturing. On the other hand, we've taken Strauss Israel to be more focused and more dedicated into to the outside, into the market, and being much more customer-centric. We've made some changes in the management as well, and the way the management is operating with some promotions, all of them done internally from people who have been already in our group.
Next. We also don't forget that in 2022, we also looked a little bit about innovation as well. I mentioned Strauss now. There was also a very large food tech conference here in Israel, which more than 2,000 people have attended, with 70 companies and 600 guests from abroad. This, of course, has been the main event of food tech e-environment and ecosystem here in Israel. As I said before, we also launched the Kitchen, we also had some portfolio innovation looking into the plant-based milk that I talked before, Alpro activity, which has grown substantially. Also looking into serving generation as having the yogurt for multi, which is for the third age, addressing their needs and vitamins which they need. Also, my first yogurt for the young age.
Just looking how to bring the specific products into the specific generations. We also looked at special communities and consumer needs with having accessible packaging for our chocolate chips, for our snacks, and also reducing a lot of allergens that we had in our products. Next. We can't talk about 2022 without mentioning the fact, although the results were hit by a large decrease in net profit, we still managed to get a net profit, and we still managed to grow by 6.5% because of the very resilient portfolio that we have. We learned the importance of having a very diversified and resilient portfolio.
Strauss Coffee has had substantial good results in 2022, headed by Brazil and Russia, which the activity there made a jump, a huge jump from 2021 and with excellent net profit results. I think that that portfolio, with Strauss Water, which also continued its growth in the past couple of years and showing a very solid net profit. The fact that our brands are much loved and appreciated by our consumers. The fact that we have a strong domestic holding in Israel with a very large portfolio, helped us a lot still to grow in 2022. Although we were hit by Sabra and by the confectionery, we still managed to show a profit, especially, we still managed to grow in revenues. Next.
Here is just a glance of what happened to our results. You can see, as I mentioned before, growth in sales. We had a constant growth in the last couple of years. Our strategy, we stated out that we're going to grow by 5% each year. You can see that more or less we are keeping this. Actually, last year this year, we actually grew by 6.5%. Also for 2023, our targets are to exceed our strategic goals and to continue growth. When it comes to gross margin and of course net, and EBIT and net profit, we were hit because of the things that I mentioned before. If we look at the free cash flow, that was a straight impact because of that.
If we go into net debt and EBITDA, you can see that we have grown from the 1.5 to 3 ratio because the fact that on the one hand, EBITDA went down, and on the other hand, we were forced to, I guess.
Increase our leverage.
To increase our leverage.
Increase our loans.
Increase our loans, increase our leverage by more than ILS 300 million. Because of the situation, because of the situation that we went into. That, of course, increased our ratio. When we're looking forward into 2023, we are already foreseeing or forecasting the decline and getting back to the levels of 1.82, which we were used to. Next. My last slide, and with that, I'll finish, and I'll pass it on to Ariel. Looking into 2023, we said that our targets and plans for 2023 are gonna be covered by three major sectors, let's say it this way. Pillars, that's the word I was looking for, pillars. The one is recover, the other one is transform, and the last is perform.
Recover, what we mean by that is that taking the businesses or things which we didn't do well and we need to fix, such as Sabra, such as the confectionery, getting them back into place. When we talk about transform, is talking about the way if we did something in a way, in a certain way, and now we think that we need to change it and address it, such as the transformation of our structure. There are places where we need to transform the way we operate. Performance, of course, is to put a very high emphasis in 2023 on performances, whether it has to do with our financial resilience, whether it has to do with our people or our brands. All those pillars are broken down into the different sections.
We have recovery in our portfolio, we have transforming our portfolio, perform, and it goes direct for our infrastructure, our people and our financial results. All of the company plans are very directed and very formed in this way so that we will manage to do as you call it, the RTP plans for 2023. That is, basically the glance picture of 2023. I will say one more word about 2023. For the glance picture of 2022. I would say another word about 2023, which is that looking now in the first quarter and looking ahead, we already see with the comeback of the confectionery, back almost to the same percentages we had before the recall.
With the increase of prices that we managed to do and the productivity activity that we are gaining, it's gonna be a very, very different year for us than 2022, and it's gonna get us back to track on our strategic path. With that, I will pass it to Ariel. I hope I spoke slowly enough.
Thank you, Shai. I think we can agree it was a pretty turbulent year for Strauss, for the industry and in global economy. Ariel will take us now through a deeper dive into the financials of the quarter and 2022. Ariel, please go ahead.
Thanks, Daniella. Just a second. Okay. Shai Babad went through the broad picture and also spoke a little bit about, you know, the year as a whole. I will try to dive a little bit into the fourth quarter results. Let's start with the top line. We can see that Strauss Group grew by 8.7% in sales up to almost ILS 2.5 billion. Organically, 3.5%. You can see that this year as a whole and the fourth quarter the same. We see positive translation currency translation effect on the top line and also on the bottom line. This is the first year out of many years that we are seeing that, and this is what we call the positive side of this strong shekel and a stronger foreign currencies like the U.S. dollar, the Brazilian real, and the Russian ruble against the shekel.
We can see that in segments, the coffee segment is the segment that obviously grew the most this quarter, as in the previous quarters. 34% growth. The coffee segment comprises more than 50% of the total group sales. Most of this growth comes from product price increases that we started to implement last year and followed this year, mainly in Brazil and Central Eastern Europe. Obviously in Israel, in the coffee business in Israel, we didn't raise prices, and very small parts of this growth, 2%-3% is due to volume growth. The good news is that we didn't see any decline in volumes in most of our coffee activity countries, Europe, Brazil, and in Israel. Although that outside of Israel, we raised our product prices by dozens of percentages, and in Brazil, almost 100%.
In Israel, we can see a decline in sales of 9.6%, but this decline also includes the recall effect of the confectionery division. If we take the confectionery aside, we can see in other slides, you have the data that Strauss Israel, without confectionery, grew by 5.9% in the fourth quarter, and in the total year, without confectionery, 4.8%. This is the 28th quarter in a row that we are growing in sales in Strauss Israel, this year without the confectionery due to the recall event. This is the 28th quarter in a row that we are growing in our market share in the different categories here in Israel. I think that this represent the strength of our brands here in Israel. This is also the reason why we can see a very strong recovery in our confectionery sales after the balance sheet date.
In the dips and spreads segment, we can see a decline of more than 24%. It is mainly due to the Sabra adjustment plan. As Shai showed you before, we are recovering also in Sabra, and after the balance sheet date, we are growing in sales and growing in our market share. The recovery with Sabra in sales is much slower than what we are observing here in Israel with our confectionery products. Strauss Water grew only by 3.1% this quarter, but in the total year, more than 6%. The data here does not show the growth of Strauss Haier Strauss Water sales in China because we include them on a one line according to the equity method. You can see in our report, MD&A report that Haier Strauss Water grew by more than 13% in sales this quarter and more than 8% in the whole year.
Taking into consideration all the lockdowns that we experienced in China this year, we believe that this is a very good result for the top line. We continue to the gross profit, due to the effects that Shai also explained before, the Sabra and the confectionery crisis that we experienced this year and the very sharp increase in our input prices, we see a decline both in absolute gross profits and in our margins. If we look at the Strauss Israel segment, most of the decline is due to the recall of the confectionery, but we see also this quarter a decline in gross profitability due to the sharp increase in raw milk prices, quarter-over-quarter, more than 16% price increase. This is had a very considerable effect on our results.
Looking forward, we can say that, first, as you know, at the end of December, we declared a raise in prices here in Israel, an average 2.9% on our portfolio, Israeli categories, food categories portfolio. This will show in the next few quarters. Together with that, as we declared before, we have the reorganization program and the new operating model for Strauss Group that we call Strauss One, which will also affect positively our cost structure. We should see a decline of somewhere between ILS 65 million-ILS 80 million shekels in our cost platform. Most of it we will see next year.
We are working diligently on increasing our productivity initiatives through all of our supply chain parts. We are planning for additional productivity that will also be implemented next year and will also give us the back wins for 2024. Strauss Coffee, we can see that gross profit is growing, although gross profitability is still declining a little bit. This... In our, let's say, international activity, both in Brazil and in Central Eastern Europe, we raised prices a little bit more than our inputs price inflation, therefore gross profits, gross profit is growing, and we managed to improve a little bit our gross margins.
In Coffee Israel, as you can see, in our segment report, in this presentation, we are declining in our gross profitability due to the fact that we did not increase prices and green coffee prices increased quarter-over-quarter by more than 100%. Looking forward, we would say that if we look at Strauss Coffee Israel, we are aiming to maintain and even improve our profitability, let's say, EBIT profitability, on an annual basis. If you will look at the annual statements, you can see that Strauss Coffee's annual EBIT profitability was about 12.5%. It is lower than what we were used to. We saw 18%-20% and 21%-22% in previous years.
We are sure that once the green coffee prices will decline in the future, we will go back to much higher EBIT margins. For now, we are looking to stabilize our EBIT margins on an annual basis. The fourth quarter EBIT margin is especially low, but this is also due to a temporary shift in costs and increasing our marketing and selling costs. Please don't look at it as a prediction to the future. EBIT declined to ILS 64 million this quarter, compared to the fourth quarter of 2021, which was ILS 179 million . Most of the decline comes from the decline in the gross profit, mainly because of the Sabra and the confectionery crisis.
Here we can see the net income bridge. Our net income for the fourth quarter was ILS 26 million, compared to ILS 103 million in the fourth quarter of 2021. We can see that on the right-hand side, the decline in profits in confectionery, in Sabra, affected materially our results. If we put these two crises aside, we can see that our net profit is pretty much similar to our net profit in the fourth quarter of 2021. It's important to understand that the ongoing business is managing to maintain the absolute level of profit, net profit. Once we recover with the confectionery and Sabra, we can expect that the whole group will maintain its absolute net profits.
Shai already spoke on our leverage, so I won't talk about it anymore. A few anecdotes with relation to the year-to-date, the whole year of 2022 that I want to point out. First of all, on the sales, you can see here in the middle part of the bridge that taking aside the loss of sales in confectionery in Sabra, we reached a run rate of over ILS 10 billion of sales for the whole group. This is our run rate. We are at a run rate of more than ILS 10 billion, and as you can see, we are recovering very nicely with our confectionery sales.
We are recovering more slowly with Sabra. Certainly, our run rate is expected to be higher than 10 billion. If you look at the EBIT bridge for 2022, again, as Shai explained, we had three major, let's say, components that affected negatively our EBIT result this year. The confectionery recall on the right-hand side, the Sabra adjustment plan, and on the left side, we can see the food tech equity. On the one hand, we recorded a very large, one-time profit because of the capital fundraise that Aleph Farms are the best startup that we have in our food, in our Kitchen portfolio, had last year.
This year, we recorded mainly our part in the losses of most of the startups that we have in our Kitchen hub, and therefore, there's a major difference on the effect on the EBIT line. If we take these three components aside, we can see that on our ongoing business, we have a very resilient portfolio, as Shai explained before. This year, not like previous years, Strauss Israel wasn't the strongest part of our portfolio. We experienced high inflation in inputs. Our margins and EBIT margins declined. We can see here the -ILS 56 million compared to last year in Strauss Israel. On the other side, Strauss Coffee had the best year ever in terms of EBIT and net profit.
ILS 460 million EBIT for Strauss Coffee. This has more than compensated for the margin erosion that we experienced in Strauss Israel. Therefore, we had an organic increase in our ongoing business of more than 5% on the EBIT line. Last but not least, we cannot conclude talking about this year without a special, let's say section for Brazil, Três Corações. We sat here for many quarters in previous years and spoke about how we are building this business very diligently and patiently waiting until, you know, we can really show excellent results. We experienced years with a decline in selling prices and decline in margins. In terms of the EBIT profit, we were for many years around the BRL 200 million-BRL 300 million per year.
This year, you can see that we have dramatically increased and improved our results. First, we increased our prices more than the input prices. Second, we had a very nice increase in the previous seven or eight years in volume. Thirdly, we managed to improve our infrastructure and our productivity. Therefore, you can see the dramatic improvement in our results. We achieved the BRL 568 million EBIT for this year. Our goal is to maintain this level of BRL 550 and above for the next years. You can read our Brazil strategy in our MD&A, in our annual report. As Shai mentioned very briefly before, we have a very solid strategy to grow in coffee and also beyond coffee for the next five years.
We are very excited about the potential of Três Corações as a very important part of our portfolio. I will conclude with that, and we can continue with the Q&A.
Thank you, Ariel. Indeed, I'd like to remind all participants, if you have any questions, please either put them on the chat box or you can send them to my email or WhatsApp. We have a couple of questions from Chris Reba from Barclays. Thank you, Chris, for your questions. How confident are you that Sabra can return to pre-recall market share or might that be too ambitious?
I'll take that one. Thank you, Chris. I think that, at the moment, it's very, very hard to predict whether we can get back to the same percentages we were before. We can see ourself gradually growing. It is a challenge getting back to the market. We see that we have some kind of a challenge with the big retailers there, such as Target, Costco, Walmart, of getting us back. The fact that we were not there for a few months didn't leave a vacuum and some of our competitors went in and private label grew very much. We are very, very much determined of trying to get, our market share back as much as possible. Right now, we are still number one, and we managed to get back to almost 40%.
To say if we will get back to 60%, it's very early and it's too early to say. Our ambition is to get back as close to what we were before and to do it as soon as possible, but it is a challenge.
Thanks, Shai. Second question is, the price increases mentioned in your presentation don't seem to be enough to mitigate the increase in input costs. How do you expect to overcome the difference?
As I explained before, if we divided into our international activity, into Israeli activity. When we talk about international activity, the price ex-increase more than covered the inflation that we encountered. When we talk about Israel, because of the situation in Israel, because of regulation in Israel, because of the public opinion and the political situation, it's very hard to increase prices more than that. As I mentioned before in my presentation, that's why we're not looking only into price increase. We are looking into very, very extensive productivity targets that we put to ourselves and productivity action plans that we are setting up, already started in 2022, and will further be in 2023. They are divided into two major sections. One has to do with our headcounts. That one we already published.
We did the one plan, which we actually cut down the speed of control, and we also let approximately 150 people of our headcount go out of the company and were released from the company. On the other hand, not just the headcount, we also have all our productivity plan where we have go through all our supply chain, our procurement, our logistic activity, our manufacturing, everything from the purchase of the raw materials till we put our actual product on the shelf. There we have very, very extensive action items which we are gonna follow through in 2023 and also in the year to come. We hope that with price increase and productivity, extensive productivity action items to do in 2023 and 2024, we will be able to overlap this gap. Overcome this gap.
Thank you. The final question from Chris, which you kind of pre answered already, but can you give more color around the streamlining initiatives and how they are expected to impact operations?
I think I answered that questions ahead, but thank you for those questions, Chris.
Excellent. We do have a question from David Kaplan from Psagot. Thank you, David. Can you talk about where you are with the restructuring, Strauss One? If I'm not wrong, there was about ILS 60 million in other expenses related to the plan. How many more quarters will we see that in the results, and what is expected? Sorry. What is the expected cost of the plan that will lead to the ILS 65 million-ILS 80 million in savings?
Ariel, you wanna take that one?
Sure. Sure. Thank you. First of all, the one-time cost of restructuring we already recorded in the third quarter and the fourth quarter. They amounted to a total of about ILS 15 million. Now, we are expecting to see the, of course, the benefits of and the on a continuing basis of our plan in the next year and a half of roughly ILS 65 million-ILS 80 million of a improvement in our cost basis. We will see most of it next year in 2023. The rest of it we will see at the beginning or the first trimester of 2024. The one-time cost, we finished recording this year.
Okay. Thank you very much. Oh, one more question from David. Sorry. Was the ILS 25 million in goodwill write-down from the closing of Obela?
No. We had two events this year. In the first quarter, we had a write-down of goodwill of ILS 25 million in our Russia activity. As you remember, once the war started, Russia-Ukraine war started, we had to do an impairment check, and we concluded that we have to record an impairment of ILS 25 million to our goodwill in our Russia activity. The second part, at the end of this year, actually after the balance sheet date, but the decision was made at the end of 2022, we decided to exit Obela Europe. The exit costs of having to delete some of the assets that we had with relation to Obela Europe in our balance sheet were ILS 19 million, and they were recorded in the fourth quarter.
ILS 25 impairment in Russia goodwill, and ILS 19 million for exiting Obela Europe.
Excellent. Thank you very much, Ariel. Thank you, Shai. Thank you all for joining us today. As a reminder, all the materials are on our website. If you have any further questions, please feel free to contact me. We look forward to seeing you next quarter. Thanks a lot. Bye-bye.
Bye everybody. Nice being here.