Welcome to the Colliers International Second Quarter Investors Conference Call. Today's call is being recorded. Legal Counsel requires us to advise that the discussion scheduled to take place today may contain forward looking statements that involve known and unknown risks and uncertainties. Actual results may be materially different from any future results. Performance or achievements contemplated in the forward looking statements.
Additional information concerning factors that could cause actual results to materially differ from those in the forward looking statements is contained in the company's annual information form as filed with the Canadian securities administrators, and in the company's annual report on Form 40 F as filed with the US Securities And Exchange Commission. As a reminder, today's call is being recorded. Today is Tuesday, July 30, 2019, And at this time, for opening remarks and introductions, I would like to turn the call over to the Global Chief Executive Officer and Chairman, Mr. Jay Hennick Please go ahead, sir.
Thank you, operator. Good morning everyone, and thanks for joining us for our second quarter conference call. As the operator mentioned, I'm Jay Hennig, Chairman and Chief Executive Officer. And with me today is John Fredriksen, Chief Financial Officer. This morning's conference call is being webcast and is available on the Investor Relations section of our website.
As well as a presentation slide deck also available to accompany today's call. This morning, callers reported solid internal growth with excellent overall performance in the quarter. In local currency, revenues were up 15% Adjusted EBITDA up 30% and adjusted earnings per share increased 16% over the prior year. Year to date, revenues were up 17%. Adjusted EBITDA up 27% and adjusted earnings per pipelines, we remain optimistic that we're on track to meet our outlook for the current year.
In addition to our 5% internal growth, we completed 2 more acquisitions, both former Colliers affiliates 1 in Sharp, Charlotte, North Carolina, and the other in Sweden, bringing the total number of acquisitions so far this year to buy. Augmenting internal growth of acquisitions has always been a key part of our strategy. Strengthening operations of existing markets, expanding our geographic reach and adding new service lines with growth potential, all help create value for shareholders. This quarter also marks the 1st anniversary of the establishment of our Investment Management business a new engine for growth for our company. Through our investment in Harrison Street Real Estate Capital, Callyers is now one of the leading global investors in education, health care, storage, and social infrastructure with more than 30,000,000,000 in assets under management, up from 26,000,000,000 at the end of last year.
Having a strong focus on alternate real estate assets gives us a tremendous advantage and Harrison Street has seen significant incremental growth both in North America and Europe as part of Colliers. Overall, Colliers is more diversified than ever in terms of our services and in terms of the geographies we cover. Diversification, combined with more recurring and repeat revenue streams, gives us a better balanced and more resilient business model positioning us well to continue to capitalize on opportunities in the massive and global commercial real estate services industry. Now before we open things up for questions, I'd like to turn things over to John for his financial highlights. John?
Thank you, Jay. As an operator today and highlighted by Jay in his opening remarks, Caller's International Group reported solid 2nd quarter consolidated financial results with continuing momentum across our operations globally. And noteworthy outperformance by our Investment Management platform, led by Harrison Street. My comments will address our Q2 segmented results, capital deployment as well as our financial capacity and outlook for 2019. And we'll follow the flow of the slides posted on our website accompanying this call.
Please note that my comments may reference non GAAP measures such as adjusted EBITDA and adjusted EPS. Both of which are outlined in our press release issued today, as well as the accompanying slide deck and are composed primarily to non cash charges that we view is largely unrelated to our operating results for the quarter. References to revenue growth and for the internal growth are calculated based on local currency. For second quarter, revenues of $746,000,000 were up 15% over the prior year. And comprised of $282,000,000 in outsourcing and advisory, up 13%.
Please brokerage revenues of $253,000,000, up 17% Both of these service lines, we did a strong year over year growth across all regions. Revenues from sales brokerage totaled 164,000,000, down 9% from elevated levels posted in 2018. However, despite greater market uncertainty, Sales brokerage pipeline indicate healthy activity ahead for the balance of 20.19. Finally, our Investment Management business established Q3 of 2018, generated $47,000,000 of fee revenue in the quarter. The more recurring revenue is generated by our outsourcing and advisory services segment represented 38% of our overall revenues in the quarter, comparable to Q2 of last year.
However, combined with the recurring revenues generated by Investment Management, the recurring total is 44%. Consolidated adjusted EBITDA was $87,300,000 compared to $69,400,000, with our margin at 11.7 10.4% in the prior year quarter. Both our revenues and adjusted EBITDA remained well diversified Our second quarter with little change compared to Q2 2018, other than the addition of Investment Management, which contributed a significant 22 percent of EBITDA generated by our consolidated operations. Quarterly revenues in the Americas totaled $421,000,000, up 9% with 4% internal growth in the balance from acquisitions. Lease brokerage revenue of $188,000,000 was up 18%, led by strong internal growth, particularly in the U S, Northeast and Southwest regions.
Meanwhile, sales brokerage revenue declined 9% in the quarter, led by a sharp decline in Canada, offset a strong Q2 of twenty eighteen, and more modest decline in the U. S, most notably in the Western region, Outsourcing and advisory revenues were up 14%, led by robust growth across all outsourcing and advisory service lines in our U. S. Business and project management in our Canadian operations. Adjusted EBITDA came in at $36,200,000 flat last year at an 8.6% margin, down 70 basis points compared to last year.
Due to change in revenue mix and ongoing incremental investment spending on Talend acquisition to elevate our services, primarily in the U. S. Turning to EMEA, revenues of $152,000,000 in the quarter decreased, sorry, increased 9% with 7% internal growth. Outsourcing and Advisory revenues were $76,000,000, up 10% with growth led by Workplace Solutions And Project Management Services. Sales brokerage revenues were up 5% overall, but included an internal decline of 9% mainly due to the UK and Germany compared to a very strong Q2 of 2018.
Lease brokerage revenues were up 14% with strong internal growth of 13% led by our operations in Germany. Adjusted EBITDA for the region was 19,000,000 compared to $22,200,000 last year, a 12.6% margin, down from 15.1% last year, impacted by revenue mix, and planned investments in talent acquisition and our broker services, which we expect to contribute greater to revenue later this year. In our Asia Pacific region, revenues came in at $125,000,000, up 3% with 2% internal growth and the rest from acquisitions. Revenues generated by our Outsourcing and Advisory services were up 16%, led by strong growth in property management revenues in Australia, New Zealand and across Asia. Lease brokerage revenues were up 14% led by strong internal growth across most markets within our Asia Pacific region.
Finally, sales brokerage revenues contracted significantly lower activity across the region. Despite the decline, sales pipelines remain robust. We expect to rebound in activity during the balance of the year. Adjusted EBITDA was $14,200,000 compared to $15,400,000 last year, with our margin coming at 11.4% versus 11.9% last year. Turning to our investment management operations.
Colliers posted revenues of $47,000,000 in Q2, but most of this contributed by Ericsson Street, which was acquired in July of last year. Revenues consisted of management fees generated on investments in existing funds and on new capital commitments. Office under management increased to just over $30,000,000,000 at the end of the quarter while adjusted EBITDA came in at $19,200,000. Moving to our capital deployment and balance sheet. In our second quarter of 2019, capital expenditures totaled $13,700,000 up from $7,800,000 last year and at the same level as Q2 of 2017.
About $8,000,000 of the spend related to upgrades to our industry leading workplaces, and the balance relates to IT that supports our client services, our people and our operations. For the full year 2019, we expect to invest between $45,000,000 to $50,000,000 in total CapEx across our operations, up from our estimate of $42,000,000 to $45,000,000 outlined at the end of Q1. In terms of growth initiatives, we invested $20,000,000 in strategic acquisitions, During the quarter, on pace with the $19,000,000 in Q2 of last year. Our net debt position stood at $590,000,000 in the quarter, compared to $316,000,000 at the end of Q2 last year, which predated our investment in Harrison Street. With our leverage ratio expressed a net debt to adjusted EBITDA of 1.7 compared to 1.2 at the end of the prior year quarter.
During the quarter, and as previously announced, we extended our committed availability under our $1,000,000,000 revolver 2024 and secured a $125,000,000 structured accounts receivable facility, which further diversifies our source of financing and improves pricing, providing additional flexibility and lowering costs to answer operations and fund investment to achieve our growth targets. In terms of our financial capacity, with cash on hand and committed availability under our revolver, We had more than $600,000,000 of liquidity at quarterend, levels sufficient to fund operations and other capital investments, including acquisitions under our growth strategy. Looking across our global operations, our revenue pipelines in most markets continue to reflect solid commercial real estate activity, tempered in some markets, most notably the UK, by geopolitical risks. However, with generally stable economic conditions and modest growth, accompanied by low interest rates that directionally have reversed from an increased easing to from an increasing bias to and easy buys based on historical parameters and the supportive lending environment, the key elements remain in place to support steady activity and leasing, sales and other commercial real estate services for the balance of 20.19. As a result, Our 2019 outlook for callers remains unchanged, including our expectations for low single digit percentage of term growth and local currency revenues, The combined with the impact of growth in local currency revenues from acquisitions results in high single digit percentage growth revenues.
And an adjusted EBITDA margin improvement of 100 to 120 basis points compared to 2018. On a consolidated basis, we estimated tax rate in 28 to 30 percent range and a low double digit percentage growth and full year adjusted EBIT e adjusted EPS compared to 2018, all excluding the impact of any further acquisitions completed between now and the end of the year. That concludes my prepared remarks, and I would like to now turn the call back over to Chase. Thank you. Are there any questions?
And your first question comes from the line of George Doumet of Scotiabank. Please go ahead. Your line is open.
Yep. Good morning, guys. Good morning.
I might just focus a little bit on the Americas, flatbed year over year on the EBITDA line. I know we've been investing in revenue production. Organic growth has been slowing. So can you maybe, Jake, can you maybe remind us how typically, how these investment cycles work And when do you kind of expect to see some, some pickup there in your organic growth?
Well, I mean, in the Americas, still the organic growth was a circa 5%. So, I consider that to be pretty good. I think the US 4%. But, you know, when I think about the US or the Americas business in total, it it all comes that we, we had a huge, pickup in lease brokerage Sales brokerage was down, quarter for quarter almost $10,000,000. And so I think, I think when you think about, margin, especially during this particular quarter, and there are some reasons for that.
But when you think about margin, you generate higher margin on capital markets transactions generally. So had we, we had a very strong, capital markets, a result last year. And so this particular quarter is down employees. So obviously has a modest impact on margins.
Okay. And maybe shifting gears to Harrison's Street, some pretty good performance in the quarter there. Maybe focusing on the European platform, how do you think of growth there and how do you balance kind of organic growth versus M and A I'm just wondering if we have appetite there to do something a larger scale.
But we always have appetite to do things on a larger scale. The the European Operation, of Harrison Street, is, rather new, although has grown significantly over the last 18 months, Harrison Street in addition to putting a lot of money to work. In that region is at the same time dialing up its recruiting efforts for professionals there. It is looking at some, unique opportunities to potentially add, add some, add a tuck under acquisition or 2. We'll see if something comes with that.
But it's, a whole new area of growth for Harrison Street. They're very excited about it. And their way of investing in alternative assets, really bodes well for Western Europe, in particular, although there is some opportunity in Eastern Europe as well. So we're quite optimistic about it, but it will take time for them to continue to fill out their platform there. It's a it's a new growth initiative for them.
Great. Thanks for the color.
And just one last one, if if I may, on on the sales brokerage activity in in APAC, down substantially. Can you maybe talk give us a little bit of color maybe on what happened there? I know you've kind of John's prepared remarks called out some macro. And just maybe the expectations for the rest of the year on that part of the business, please?
Yes, I mean, it was a down and, some of its timing related
maybe a little bit unknown about, you
know, the impact of whether, you know, capital of China is maybe retrenched slightly, but No, particularly caution noted. Pipelines are very strong really across the, across the region. And, we expect a return, to better activity Q3, Q4 there. So, Nothing. Nothing to know, but this was certainly down relative to last year.
It was very, very strong last year. You'll also recall that, we were in continue to grow Japan, which is a very, very good market for us. And, with solid activity there, that we expect to see for the balance of the year. You know, I'd I'd add, I'd add there's, you know, there's a little bit of unrest in Hong Kong right now. That's a big capital markets, a market presence for us.
And, you know, also in, in Australia, New Zealand, a lot of our capital markets initiatives around residential development. And I think, I'm looking at you, John, and that was down, that was down, significant level of the outage as well. So that was, that was something we had, we had expected. And, you know, largely offset by as we called out already leasing activity, which in some respects is more attractive revenue, honestly than some of the capital markets revenue we generate. But notwithstanding that, as you can see, the results capital markets is important part of our business.
Great. Understood. Thanks for that color. Those are my questions.
Our next question comes from the line of Stephen Sheldon of William Blair. Please go ahead. Your line is open.
Good morning. Thanks. First, just in the sales brokerage business and the year over year decline in each region. I mean, you talked about this a little bit, but can you provide some more detail about pipeline you're seeing there in the different regions and maybe how it's trended year over year. And it just seems like based on your commentary, it seems like you might view the slowdown this quarter.
Is more of a temporary slowdown versus the start of something more persistent with the visibility you have at this point. So is that fair? Just any detail there?
Yeah. You know, I think last year, you think about last year, in a number of those markets, up until the end of second quarter. You know, the world was a pretty healthy place, in terms of, investing. With, healthy markets and outlooks and so forth. And obviously things changed quite dramatically in September, October through the balance of the year last year.
So I think, you know, what we're seeing is, the impact I think of a lot of uncertainty, which existed at the end of the year, merely into the beginning of this year. And now with the, I think the biggest change being a change around, direction of interest rates in the US, more from a, you know, going from a tightening to an easing bias. Is all very, very conducive to additional commercial real estate activity. I mean, at the end of the day, investment in real estate risk adjustment basis still represents a very attractive asset class relative to, other places that institutions can invest And, you know, as a result, we would expect, you know, the changes in overall, macro conditions to be supported and, I think that's what we're seeing around our pipelines that exist in most markets across the world. I think maybe saving except for the UK, which has got an additional level of uncertainty.
Jay mentioned Hong Kong currently, but when I think about our activity level on our larger business in the UK, that's gonna probably be an overhang there for the next balance of the year until there's more clarity around what's gonna happen with Brexit.
Got it. That's helpful.
And then clearly, you know, great traction on on the investment management AUM, I guess where are you seeing success in terms of fundraising? And then with the continued efforts, you know, in the third quarter, you know, would you expect to see another step up in that in in absolute AUM, potentially?
The, you know, I think you gotta go back to the fundamentals of Harrison Street and why, people are investing in alternative assets. Harrison Street, unlike most, remains very, very focused on alternative asset classes. Gives us a clear, which gives them a clear differentiator in the market, and it's attracting a lot of, a lot of investment dollars the, the 2nd quarter was particularly good. I think that, it's likely the 3rd quarter will be more modest You might see a pickup again in the fourth quarter. But, you know, I think we're, we're, expecting a more modest fundraising, activity in the 3rd quarter, although a pickup in actual investments in the 3rd quarter.
So, we've raised the capital now. We've gotta put it to work.
Great. Thank you.
Your next question comes from the line of Stephen MacLeod of BMO Capital Markets. Please go ahead. Your line is open.
Thank you. Good morning.
Good morning. Great.
Just wanted to follow-up on the investment management business. I think previously you sort of talked to a run rate of about 150,000,000. With the higher AUM, does that move higher in lockstep for the year?
I think our, we're pretty much on target. Think we might be slightly below target, from our initial, our initial thoughts coming into the year for a whole variety of reasons. Great result. But, I think, I think, we're, we're pretty much on track for what we expect, from Harrison Street.
Okay. Okay. That's helpful. And then just wanted to turn to some of the recruiting investments that you've incurred over the last two quarters. Can you just talk a little bit about when I guess maybe by region, when you expect to generate returns, if those expectations have changed at all from previous and if you see any material geographic differences where recruiting costs may or may not, you may or not generate the returns that you would have expected on recruiting
Well, the liquidity costs that we're seeing now, a lot of that does relate to kind of current recruiting, but also going back into the back half of last year. And, most notably in Europe, where we made some significant investments, mainly in the UK, but with, broader implications in Europe and opportunities there. So we would expect, based on timing for those, investments to start generating returns and productivity. Having said that, I did comment before on on the UK and Brexit and so forth. So, you know, if there's uncertainty there that may, temper, some of the productivity we've expected later in the year.
It's only timing. And, we're very confident in the, the recruiting we've done in Europe. And then, of course, the US, which is a little bit less. In terms of impact, we feel good about that. And we definitely will see productivity gains and revenues generated from those recruits, later this year.
You know, Steven, in Europe, we had a, we had a great opportunity to incorporate
a very significant debt origination
platform, which we didn't anticipate going into the year. We made a decision to bring the entire team over and it has been, still early days. But it was a service line that we have not offered in the UK. And it was one that, gave us an opportunity to expand not only our capital markets presence, but give our debt, now debt origination people, the opportunity to call on our clients and offer, the ability to raise capital for them in the form of mortgages and other things. So when you do these kinds of things, you make a bet.
In this quarter, that bet cost us about $2,700,000 in costs to bring these people on, support their salaries, support their their their junior people, and and revenue will follow over time. But when you have these special opportunities and part of it, I think came because of the, the, the uncertainty in the UK, this firm, which was a standalone firm, just merged right in with us and and adopted the Colliers brand and that came on our systems and so on. And it, And the reason I raise it is it's just another example of having a global brand and when you have exceptional people that have built up exceptional operations, they know they'll do better as part of a global platform like Colliers. So that was a particularly big investment for us in Europe. And, it impacted us by something like two point 5, 2,700,000 for the quarter.
But I think it's money well spent and at a good time in the, in the cycle.
Okay. That's great. Would that $2,700,000 just represent, would that be the The only recruiting costs that you've incurred or the most significant recruiting costs that you've incurred?
It's probably 80% of the recruiting costs in Europe. Yeah. Okay. Which was the lion's share. I mean, that directly impacts EBITDA in the current year.
That's what good business people do. They make strong business decisions about those things. And if it's gonna impact your EBITDA, you're doing it for Hopefully, the right reasons we believe that these people are the right people in a great addition to our business. And we think that they're gonna do double as well with us than they were doing on their own.
That's great. Thank you. And then just finally, just with respect to the outlook, John, you mentioned kind of the the interest rates moving interest rate expectation moving from a tightening to an easing bias Does you know, incrementally, do you feel as though there were a little bit of puts and takes and you still feel, you know, as confident as you have in the past do you feel as though that interest rate change has led to a potentially, you know, maybe even incrementally more positive outlook in terms of the backdrop for the rest of the year?
I'd say net net, it would be a positive for sure. You know, I I think in in in the context in which is being made, I think it's really a a realignment that the US is thinking with the rest of the world instead of kind of going out on its own like it happened. And, I think that that reversal in course is very, you know, conducive to additional activity. So that, that would be positive relative to you know, what underpinned our report are expected outlook at the beginning of the year.
Right. Okay. That's great. Thank you very much.
Your next question comes from the line of Frederic Bastien of Raymond James. Please go ahead. Your line is open.
Good morning, guys. Can you discuss the management changes that you've had and how you've been adapting to a deal and tailors departure?
We've been adapting just fine. Thanks very much for asking, Brad. The whole situation is very disappointing, to all of us here, I think, on the management team, but when things like this happen, you have to have a 0 tolerance and, we executed on that. And, and we have succession and and deep bench. We'd always like to have better deep benches always, but, it's been business as usual and, and we have a missed a blip in our, in our operations.
Okay. Thanks for that. My second question, you commented on a healthy pipeline of CRE activity heading into the second half. How about how about M and A? Are you feeling good about the potential to complete a a few tuck in acquisitions by year end?
Yeah, we are. You know, as as you know, we, we have a strategy of growing through, internal growth and through acquisition equal to 10% of the prior year's EBITDA last year, and that's on average over 5 years. Last year, we blew it away by multiples with Harrison Street among many, many other acquisitions. So you know, some, some around here have been saying that we should digest a little bit. And, and I think that that's, that sort of a theme that we're we're having.
But I, I see no reason why we won't, we won't have, we've needed acquisitions that will still be in the plus 10 percent, growth on acquisitions over the prior year's EBITDA this year as well.
Your next question comes from the line of Matt Logan of RBC Capital Markets. Please go ahead. Your line is open.
Thank you and good morning.
Good morning.
Just wondering if you guys could talk about the impact of mix shift on margins given the significant growth in both Harrison Street and the outsourcing and advisory division. Just looking at maybe either in 2019 or 2020, how we should think about this maybe on a on a normalized basis, assuming, you know, sales volumes are flat to down slightly?
Look, I think that I think the next shift we saw this quarter is maybe a slight aberration, where we saw sales down more than more than we probably originally expected. But again, I think I can go back to, the situation at the end of last and a lot of that having, an in-depth now, Q1 and Q2 with respect to sales. I think it's more of more of a, you know, more of a normalization, in the, you know, in the quarters ahead into next year. Having said that, you know, we continue to be very focused on building our recurring revenue streams, whether it's through investment management or our source advisory, I'd say, leasing as well. We are out, to make investments to build those components of our business and notwithstanding the fact that with the exception of investment management, that may lead to a slightly more moderate, easing of our overall margin, I think the recurring revenue characteristic of that is largely, you know, worth that kind of a trade off.
I certainly agree. And I guess part of it would be simply a function of timing on a quarterly basis as opposed to an annual basis is if we compare this to 2018?
That's right.
Maybe just shifting gears to, the Harrison Street business. Jay talked about the unique opportunities for a tuck under acquisition. Just wondering if you could provide some context to what might be unique and maybe some more color on how it's trending slightly below target and your outlook for for the business longer term?
Well, you know, I I had to re re rephrase, your your your comment a little bit acquisitions in that business are, are a little different than acquisitions in our core business. We look for specific, types of, acquisitions if we were going to do one. Harrison Street was a big acquisition for us. So as is our practice, we, we always like to digest it. We're now through the full year.
We have a wonderful relationship with our partners at Harrison Street. We have investigated 2 or 3 very interesting, I would call them tuck under acquisitions to Harrison Street, which are always out there and and potential. So we're we're moving those along, but they would be largely along the lines of the alternate asset classes that they focus on. 1 or 2 of them would have been would have added a different asset class alternative, also an alternate asset class So we believe rather than, being all things to all people in this business, we'd like to focus in areas where we can add synergistic value to, to our funds. So, being a being a dominant player in, in student or health care or seniors gives us the ability to leverage the platform to generate incremental returns for our clients And that has been, I think, one of the keys for Harrison Street success over the past many, many years.
So, If we were to look at another acquisition, in Investment Management, we would look for a profile similar to Harrison Street, where we can partner with the operating management team where we could help them grow their business globally by leveraging everything Colliers brings to the table, including distribution, and, operate them in a more, entrepreneurial way than perhaps an insurance company might or somebody like that.
Your next question comes from the line of Mitch Germain of JMP Securities. Please go ahead. Your line is open.
Again. Sorry about that. I know you've mentioned deal pipelines are growing in capital markets. Is that broad based? I mean, I think you had specifically referenced that in the US and Asia.
Are you seeing that, you know, kind of throughout the globe?
I would say probably with the exception of certain birth to Europe, not particularly strong point. I mean, they're they're fine, but, I think the UK will probably continue to be a bit of a challenge there until, things are sorted. Respect to the little Brexit thing. You know, we're kinda watching things in Asia with respect to this Hong Kong thing. We don't know where that's gonna go, but you know, again, some of that, can have a near term or, you know, a more medium term impact, on activity level.
But say it in most of the other markets, we're seeing good activity. So and and you're saying it's interesting. You're interested. It's interesting because you're seeing Asian investors coming into the UK right now, because of the, more depressed asset values and they're not significantly depressed. And that's the, that's the, you know, to John's comments.
It's so difficult to figure out how this is going to shake out Brexit. So there's modest reductions in values and, we were just part of a very significant transaction this week. In, in, in London, and it was Asian investors, and they haven't been there for quite some time. So that's the kind of thing that that happens in these, in these aberrations geopolitically. So we're gonna launch that closely.
Great. And obviously, we've had some disruption amongst some of your peers, U. S. Capital markets. With a merger, you know, is that potentially representing a chance for you to upgrade some of your talent and capability in U.
S. Capital markets?
For sure. Great point. Lots of, lots of recruiting potential on that merger, whether it's from the JLL side or the HFF side, and that's that's always what happens when you're merging 2, 2 brands within an existing market, capital markets can only be led by 1 contingent. And so, we have a lot of, a lot of, potential recruits in the offer. Which we hope to, hope to augment our team.
And, and for us, it really will enhance our capital markets presence, and you look for these once in a lifetime opportunity to really capitalize. So yes, it's a great point Mitch.
And there are no further questions at this time. I will turn the call back over to Mr. Jay Hennick for final remarks.
Thank you very much, operator, and thank you everybody for participating. And we look forward to, reporting solid or better solid results in the third quarter. Thanks for joining us.
Ladies and gentlemen, this concludes the quarterly investors conference call. Thank you for your participation, and have a nice day.