Earnings Call: Q3 2018

Nov 6, 2018

And welcome to the Conference Call of Amrits AG regarding the Presentation of the Q3 Results. At our customers' request, this conference will be recorded. As a reminder, all participants will be in listen only mode. After the presentation, there will be an opportunity to ask questions. May I now hand you over to Doctor. Wolfgang Leitner, CEO, who will lead you through this conference. Please go ahead. Good morning, everybody. Thank you for joining us for the report on the third quarter. Overall, I think we see the 2018 as an average quarter and the average between light and shadow, I would say, quite different development in our business areas. Pulp and paper overall continued with a very positive development. Metals, positive development with regard to order intake, but profitability wise, obviously, not satisfactory. We see or we saw cost overruns and also execution of relatively lower margin orders so that our profitability there definitely is not satisfactory. And Hydro, in spite of a large contract that has been booked in the third quarter, still is facing a quite low market and therefore, had not overly high order intake in this third quarter. Overall, order intake for the group with about €1,500,000,000 was good. And so the, let's say, the relatively weak order intake in hydro could be compensated by the increases in the other business areas We had, in the last four quarters, about €6,200,000,000 order intake. And I'm confident that when we add the fourth quarter of this year that the full year order intake should be above this €6,200,000,000 level that we showed for on this rolling four quarter order intake. For the year, the sales increase in Q3, we could this we could compensate the decline in the first half year. And yes, I think everything else in more detail when we start with the presentation on Page three. So here, you will see overall numbers. Order intake is at €1,500,000,000 attractive in Pulp and Paper and also Metals and low in Hydro. Sales increased to 1,400,000,000.0 All business areas saw an increase compared to last year's reference period of Q3 twenty seventeen. Decrease of EBITDA in Q3 despite the sales increase, practically only due to metals or overwhelmingly due to metals, to cost overruns in metals processing as well as in executing some lower margin orders in the Schuler side and also some decline in Hydro. And the Vaxerium acquisition has been closed successfully in October, October, and will be we will call it in the future, combined with our existing activities in this field, Android fabrics and also Obserium will, over time, will disappear. On Slide six, you see the development of the order intake since Q1 twenty fifteen. And also the red line shows the rolling four quarter order intake. So good development since the first quarter of this year. As discussed, currently, four quarters rolling four quarters is 6,200,000,000.0 Geographic split, more or less stable, 37% Europe 16% North America. So developed markets combined, slightly above 50%. Asia, excluding China, 17% China, 19%. So combined Asia, quite active South America, low with 5%. Please keep in mind that the big order we received from Arauco for the GBM project is has not been booked in Q3, but will be booked in Q4. So overall, on the rolling four quarter basis, an increase of 10% in order intake. On Slide six, sales development increased of 3% on a four quarter basis to €926,000,000 and aggregate full quarter, 3,900,000,000.0. If we sorry, this was the capital sales. So it was a split in sales. Did I miss? Not at all. The intake and then capital sales increased by 3% on Slide seven. The service business increased by 9% in sales and both in absolute and in relative terms. As a percentage of total sales, we now have 35% of sales in service. Obviously, the acquisition of Clarion will which is 100% aftermarket sales will increase this percentage and provide a more stable basis going forward in terms of both order intake sales and also, hopefully, profitability. On Slide eight, order backlog increased by 8%. As always, more than the biggest order backlog is in Hydro with 39% of our total backlog of €6,900,000,000 Pulp and Paper, 31%. Again, will increase with when we book the large order from Araucon. That was 23%. Slide nine, earnings. So in Q3, on the left side, you see EBITDA went down from €99,000,000 to €86,000,000 minus 13%. Metals basically were mostly responsible and hydro also, to a certain extent, responsible from, however, from a very high level in last year's Q3. And on the right side, the first three quarters at €252,000,000 down from $3.00 €6,000,000 If we exclude the one effect onetime effect of €25,000,000 mostly due to this sale of the Schuller technical center in Tianjin, then the decline is 11%, still disappointing, and we certainly are not happy with that. So in the first nine months of this year, our EBITDA profitability went down from 6.8% on a comparable basis to 6%. Slide 10, the split of profitability between the business areas. Hydro went down from 6.8 in the first three quarters to 6%. Pulp and paper continuing very attractive profitability, slight increase from 8.8% to 9%. Metals on a comparable basis, 5.1% down to 2.6%. And face value, 7.1 last year to 2.6%. And separation, stable profitability, 4.740.6%. Slide 11. Overall, the figures, you see some highlighted comments. Financial result went down slightly from minus 0.8% to minus 5.8% in the first three quarters due to lower average net liquidity and lower interest rates in Brazil as well as the higher interest costs for the bonds for Cendalen we have issued in June and August. Cash flow decreased mainly due to lower earnings as well as change in net working capital on both sides, higher POC receivables and lower POC payables. Working capital on both sides, higher POC receivables and lower POC payables. Net liquidity declined as a consequence of payments for acquisitions. And obviously, cost overruns also play a role. But basically, it's a question of the change in net working capital, increase in receivables and decrease of payables, both project related. If we then move on to the business areas, Slide 13, Hydro, basically unchanged given the market environment. There are projects that tend to be as always if when the market is not booming, then you wait for the project. And this strong more strongly that projects tend to be shifted and postponed and not be decided. We hope they are decided. I think this is what we continue to see. Pumps, overall, good development. Competition in hydro, I would say, stable. We obviously, in a smaller or lower market, competition is tough. But I would not say that it is getting tougher or that prices are under more pressure than they have been over the last, actually, few years already. On Slide 14, the numbers. In Q3, we booked $3.00 €3,000,000 which is down from €425,000,000 Last year was a good quarter last year, but €300,000,000 obviously is not a very high order intake. In the aggregate, we are now at €1,060,000,000 up from last year, but the first three quarters last year have been extremely low. So it is still relatively low order intake. It basically follows our, I would say, defensive scenario where we have always said that we will adjust our capacities to this level and would not wait and hope to see a substantial uptick in order intake. Sales are slightly up in Q3, practically the same for the first March. And EBITA with 65,000,000 for the first March, down from €73,000,000 in Q3. Last year has been a very good EBITA. It's yes, it's a consequence of developments in the execution of the hydro order backlog. I think the regional split is does not deserve any special comments. On Slide 15, Pulp and Paper. Good development. As I've said, this around order for more than 300,000,000 will be booked in October or in Q4 of this year. Overall, continuing good activity globally in Pulp and Paper. So we continue to be optimistic and that we can see a continuation of both high project activity and also a continuation of the good profitability or excellent profitability that we have achieved. It is also supported by high activity in the power generating boilers, biomass boilers, where we continue to be successful in Asia, both in China and in Japan. And from a competitive standpoint, I think on the pulp side, we are in a good position. We have developed good technologies. And therefore, also, it's another reason to continue to be confident with regard to the future development of this business area. On Slide 16, the numbers. Q3 order intake, euros $545,000,000, up twenty eight percent first three quarters, up 11% to €1,670,000,000 Sales up 6% for the quarter and 3% for the first nine months. Service sales increased nicely also. And EBITA with €136,000,000 in the first nine months at 9%, very attractive for the quarter, slightly lower, but this is on a very high level. So this is just, let's say, volatility of the capital sales and sales execution. Yes, I think that's Pulp and Paper. On the next page, metals. Metals forming. Overall reasonable project activity. We are a little bit concerned that there's a very special situation in Germany where the large car manufacturers, OEMs struggling with the new permitting of their models with regard to emissions, this has led to substantial reductions in production. And this could result in performance of one or the other expansion project, not long term, but could mean that this moves from planned Q4 decision into Q1 or Q2 twenty nineteen decisions. So therefore, we are a little bit more cautious on the order intake on the metal forming side. In Germany, regarding German car manufacturers. And China continues to be to look good and active. Metals processing looks very good, very active. There, we expect good project activity. Also in The U. S, I think we start seeing activities related to the change in U. S. Trade policy that there is an incentive to produce certain steels, for example, being supplied to the automotive industry in The U. S. That could result in one or the other investment projects in The U. S. Price level is still very competitive. But volume wise, I think we are somewhat more optimistic on the metals processing side than we have been recently. Slide 18, the numbers. Order intake, substantially up in the quarter, up 39% to four fifty six million and the first nine months, up 23% to €1,400,000,000 Sales are in the quarter slightly up, the first nine months slightly down. And EBITA, we have discussed already cost overruns to quantify, I would say, in a very low double digit numbers. Cost overruns on projects and also execution of some lower margin products for a project, for example, also the Schuller projects serving now the domestic fully domestic car industry in China, but also in Vietnam, for example. So profitability is clearly unsatisfactory. Slide 19, separation. Reasonable good project activity. Municipal active, especially China continuing to be active also industrial, quite active mining industry, active for example, South America, specifically Chile And Feed and Biomass are also satisfactory, price wise as usual, I would say. Slide 20, the numbers. Slight increase, very slight increase in Q3, up 2%. And the first nine months, up 15% to €550,000,000 Sales are up by 14% for the quarter, 9% in the first nine months. EBITA margin practically unchanged. And then to conclude with the outlook. For 2018, we continue to forecast flat sales and solid profitability, excluding the one offs. And we overall, earnings and profitability will be significantly lower due to provisions of well above €20,000,000 that we will make for capacity adjustments in metal forming Schuller and the remaining adjustments in hydro, but predominantly it would be the remaining adjustments in hydro, but predominantly, it would be Neuschula. Excluding this onetime effect, our profitability should reach almost the level of 2017, excluding the extraordinary effects, which was 7.1% compared to reported 7.5%. So overall, a stable environment, nothing to complain about. We have to work on our profitability in the especially in the metals area, both metals processing and Schuller. And we expect we do not expect a dramatic change or dramatic pickup in hydro. So we are continuing and completing actually our adjustments in on the hydro side to adjust for this lower market size while maintaining and regaining the old profitability in the hydro presentation, and now your questions are welcome. Thank you very much. And we will now begin our question and answer session. You. We've received the first question. It comes from Andreas Willi of JPMorgan. Your line is now open. Please go ahead. Yes. Good morning, Doctor. Leitner. Thanks for taking time. I have three questions, please. The first one on cash generation, which has remained relatively weak, as you said, on the project working capital. Given that the orders have started to pick up a bit, I would have expected that to start leveling out in terms of cash conversion. Can you confirm that there is no underlying deterioration in payment terms? And this is just a question of timing of prepayments and so on that the cash conversion still hasn't improved much? Second question on Ketherium, if you could just tell us which date you will consolidate that from, so October 1 or November 1? And what the impact on the financials will be when you first consolidate it in terms of acquisition costs that you may book or also then the amortization of the purchase price going forward? And the last question on the mid market strategy in Schuler, if you could give us a bit of an update on that, how that's going in terms of new sales that you achieve outside the traditional high end German automotive market? Yes. Thank you. With regards to cash generation, obviously, are watching it very closely. We're watching also very closely the development of our net working capital. There is no large or significant change in payment terms. I can clearly confirm that. But what we have been seeing is, as I've said before, an increase in POC receivables for various reasons. It's a number of projects. There's one Russian project that is suspended, but which we expect to be restarted, if not this year, then very early next year, which would result in a sizable amount of payment. There is no risk of that this will not be paid. But the question is when can we realize the sales and when can we realize or continue with the execution and with that, the payment would be due. And other increases in PLC receivables and also payables have declined partially because of profit realization, but partially also because of, yes, payments that have been made to suppliers. So there is no with regards to payment terms being agreed in our orders in our projects, there's no change other than the regular variations within the project that have always been the case. And it's basically driven by project specific execution issues. Then the second question was Xerium. We will consolidate Xerium from October 1 onwards. We expect for Q4 twenty eighteen sales of close to €100,000,000 most likely. EBITDA will be practically zero because of the EBITDA operating EBITDA would be balanced by acquisition costs that will be booked in, in Q4 also. For 2019, we expect sales of Xerium in the range of €400,000,000 and EBITDA in the range of €60,000,000 up to €60,000,000 Amortization will be in the range of €30,000,000 There will be some tax advantages. CRM has tax loss carryforwards. We expect to be able to use part of it. So there may be some moderate positive impact on the tax rate. So much to Xerium. And then your question to Schuler mid market, we are continuing to work on that. There have not been any large orders in this field, but we are making good progress on adjusting our products to the needs of this mid market. And therefore, we and also to make sure that the orders we have booked in this field are executed at or below the cost that we have forecasted. So basically, good progress, no sensational new orders in this field. You. You. Then we have our next question. It comes from Andrew Finkel of HSBC. Please go ahead. Your line is now open. Yes, thanks. Good morning and thanks for taking my questions. First one would be a follow-up to Andrea's question on the working capital side. Can you remind us when we look at a large project like the one from Arauco, for example, the fourth quarter, how the working capital and cash profile will look throughout the project? So what kind of prepayments will get to the beginning? What kind of milestone cash payments will occur that has been unchanged relative to larger projects a couple of years ago? The second question is also related on pulp. Maybe you could give us an update on your view on the pipeline of larger projects going into 2019? And then on the capacity adjustments in Metals and Hydro, maybe you can you already said the majority is in Metals, but can you be a bit more specific what exactly you're doing in Hydro and whether we should expect more to occur potentially beyond Q4 in terms of restructuring? Probably, we'll have to ask you for the third question because you were very well, I couldn't understand it completely. So number one, the payment terms, obviously, I'm not going to go into specifics of the Oraka order. But typically, get a down payment in the range of 5%, 10%, up to 15%. Typically, I would say, the range of 10%. Then we get progress payments as we execute the order, which in the case of, let's say, a full pulp mill or half a pulp mill, execution takes about two years. It starts with some minor payments for the engineering phase as we begin shipments, which typically start, I would say, nine months after the booking of the order and continue until a few months before start up. These are progress payments as these shipments are made. Typically, up to 80%, 90%, 95% of the order value, the rest being then paid at start up, after start up, after preliminary acceptance, typically a small amount, a few percent is kept back until final acceptance typically can be released against the bank guarantee. So the cash flow in the beginning is first few months typically is slightly positive. So the cash flow in the beginning is first few months typically is slightly positive. During execution, continues to be, in a good case, slightly positive in a not so good case, slightly negative. And at some point, changes if it's profitable into the positive side. Now that can be depending on payments to sub suppliers and so on, it can be obviously can be managed where it's substantially positive or towards the end can also be a time where it becomes negative. That's the question of the large pulp project. Then project pipeline in pulp continues to look positive. If you look at the announcements that have been made, we have seen acquisitions of two companies in Brazil. The acquirers of both companies have signaled they want to proceed with a large expansion. Now in one case, it's unclear who is the owner, who will end up as majority owner, so that may be delayed. The other one is committed to proceed rather quickly. I think there is still in the market the pulp mill that UPM is planning to build at some point of time in Uruguay again. There are some projects in Russia, projects also in other areas. So we are quite confident that next year should see not all of these projects will be actually started or decided next year. I think that would be too optimistic. But there are so many announcements and tangible projects on the table that I'm very confident that the activity in pulp investments next year should be at least on the same level as this year. Now what we get of that remains to be seen. But with our good position technically there, I think we can be, of course, optimistic that we get our fair share of this or we get our fair share of these investments next year. And the third question, I did not understand what Just to repeat, it was related to the hydro restructuring where you I think you said most of the restructuring costs will be occurring in Metals, but you also referred to hydro in the report. I just was interested what kind of measures you are taking and whether that could be continuing into 2019, I. E, should we probably expect more restructuring costs in hydro next year? Yes. No, we done the vast majority of the capacity adjustments, yes? It's across the board, reduction in basically manpower, combining centers of excellence, etcetera, just adjusting to a lower market. The majority of what has to be done and what has to be paid is behind us. So this year, it will be definitely in the single digits. It may continue next year in the single digits, but nothing dramatic to be expected. Okay. And maybe as a last follow-up on your underlying margin guidance with regard to almost up to 7.1% you've seen in 2017, it would still imply a very reasonably strong fourth quarter profitability wise on an underlying basis, excluding the restructuring costs. There any special positive impact we should factor in for the fourth quarter here? No. It's just typically our sales are higher. Also, obviously, we look at the orders execution where we can release certain provisions. So obviously, there's no guarantee for the results, but we would not give the guidance if we would not be confident that there is a good chance we can achieve that. We have our next question. It comes from Sven Weyer of UBS. Three questions Maybe from my we can go through them one by one. The first question would be on hydro and the project Is there an impact also from the turmoil that we've seen in some of these emerging market currencies? Is that also leading to delays? Or do you see other factors that had an impact on the project decision making? That would be the first question. Not to a large extent, I would say. I mean we continue to be or the hydro market continues to be impacted by the situation in Brazil. Now let's see how that will develop with the elections behind us and the new president. It continues in Turkey. Also there, maybe there is some improvement in the spirit of in the business spirit in Turkey. But in both countries, definitely, are continue to be impacted by the respective situation. And overall, it continues to be impacted by solar and, to a lesser extent, by wind capacity additions. So I would not see any new trend or new impact in the last quarter, last several months. Okay. The second question is on Q3, specifically on EBIT. I think you said that the cost overruns in metals amounted to low double digit amount. I was just wondering, is that for Q3 specifically? And then I also saw on your cash flow statement that you had a kind of a €7,000,000 disposal gain. I was just wondering which division that was, so that would be on Q3. This was a I can confirm, there was a very low double digit cost overruns was specifically in Q3, yes, in specific projects. And the onetime disposal gain, Michael, this I pass on to you. What was that? I think it refers to the metals business area. Good. And then just lastly, maybe following up on Joerg Andre's question regarding the full year guidance because obviously, also your guidance does now include the pro rata contribution from Clarion where you said there's going to be kind of zero EBIT impact. I mean on the back of the envelope, I get to an implied Q4 margin of 9.5% to reach the guidance, which is something you never had before. Is there any division that sticks out positively in terms of margin delivery for Q4? Or do you see that really across the board? It's obviously, it would have to be on the metal side and probably also on the hydro side to a certain extent, yes. Okay. And part just remains on a very good level. And overall, it also sales should be higher, obviously, that which will also would help in general, which would apply to all four, most likely. Thank you. The next question is from Daniel Lyon of Esser Group. Please go ahead. Your line is now open. Yes, good morning. Thanks for taking my question. Actually, there's one left for me, which would be Xerium again. Could you maybe talk a little bit about synergy potentials when consolidating Xerium going forward? What would you expect in both term both related to revenues and so markets as well as cost wise? Yes. We see obviously, it's we are confident it's a very good fit because it's aftermarket. It's serving mostly the PayPay industry. It comes with 28 locations serving the prepaid industry, which will improve our presence in this market very substantially. And keep in mind that approximately half of Exerium sales are in fabrics and the other half is in rolled service. On the fabrics side, we we have already a small company cook for us in several many years, actually, in the range of somewhat towards €40,000,000 sales, euros 30,000,000 to €40,000,000 sales. On the sales side, there may be some overlapping customers that could result in slightly probably single digit loss of sales. But on the other hand, there should be probably single digit loss of sales. But on the other hand, there should be synergies on the sales side because of the improved presence so that and the group presence in the mills, where we expect a general positive impact on our aftermarket sales in all the area in for all products serving or going into the paper industry. We see cost synergies or cost reduction opportunities on the one side. Think Cerium so far has been a public, let's say, an independent public company at New York Stock Exchange. Obviously, there are costs that will not have to be continued, and that should go directly into the bottom line of Cerium. And by combining the Cerium activities with our existing activities on the fabric side, obviously, there should also be cost synergies and will be cost synergies in all areas like sales, like product development, product manufacturing, etcetera. So that overall, we expect to definitely be able to improve the profitability of the combined activities. Thank you very much. Has that answered the question? Yes, yes. Thank you very much. Thank you. Thank you. The next question is from Jack O'Brien of Goldman Sachs. Please go ahead. Your line is now open. Hi, good morning. Thanks for taking the question. So I just want to ask another on Metals. Profitability through the first March at 2.6% from 5.1% last year. Can you just help give me some color on these cost overruns? How long we're expecting those to continue? The impacts they've had through the year? And then secondly, actually, let's start there. Yes. It's the same project that we have already discussed in the half year. It's there are a few others. I mean, it's generally due to the competitive situation in general metals market, not in the forming market. Obviously, the price levels have been quite low that we had to book the orders last several years. Nothing has changed there. Rather, prices are starting to improve somewhat going forward, I would say, due to the increased activity. So but on the backlog, margins have been low. And therefore, already minor cost deviations obviously become visible also in and immediately in the gross margins that we can realize when we execute these orders and convert them into sales. Beyond that, it's on the metals processing side, those other special large projects or anything that is a big risk or a big shadow going forward. So these are minor deviations, no, nothing dramatic. And as far as we see it, well under control and nothing where we see a substantial risk going forward. The Plumbing we saw especially low sales on the service on the aftermarket side, combined with low prices or low margin that we knowingly accepted to get into this mid market in Asia, The combination of the two plus some minor cost overruns, again, caused by increased visibility due to overall slightly lower price levels caused this decline in the overall profitability for the metals business area. And given the lower margin quality of the order backlog, would we expect these somewhat lower margins to persist through 2019? On the metals processing side, I would be optimistic that we should be able to see a slight increase because, as I've said already last time, I think also, the price quality has slightly improved. And on the forming side, I think this remains to be seen. As we have said, we are there with a new CEO. We are in the process of resizing again Schuler. We make several organizational changes, combining divisions, etcetera. So I would and we're just in the budgeting process. So I would not want to give guidance on Schuler right now. Okay. And just one final question then on hydro. This year, we've seen sales slightly up and also slightly up in the third quarter. And obviously, the margins come down. So despite a high proportion of service sales, so again, is this about the really the margin quality of the backlog? I noticed that employee numbers is largely flat year on year. So I guess this isn't predominantly a utilization issue. So is this about really the backlog quality? It is the backlog quality, and you should not rely or not conclude too much of the employee number because they are correct, but they are distorted by hirings and terminations for specific construction sites where we do the installation. And hydro typically does not hire sub suppliers but employs the respective people, which can be several 100 on a specific construction site. So that you should not put too much emphasis on the employee number. The permanent employee numbers aside from construction sites is going down quite substantially, but it's not visible due to this construction or site specific activities. Thank you very much. Thank you. Then we have a last question. It comes from Brian Phillips of Jefferies. Please go ahead. Your line is open. Yes. Good morning. It's Graham Phillips from Jefferies. Yes, I was going to also ask about the margin in Hydro given the strong service, if you could just expand a bit more about that. But also in Paper and Pulp, we had a very strong service, and yet the margin was down. So can you talk a little bit about what's happening to the margin in Paper and Pulp? Yes. We'll start with Paper and Pulp. I think the slightly lower margin in pulp and paper is, I would say, typical volatility depending on sales realization. So there's no so far, currently, we do not see any negative impact in Pulp and Paper. Obviously, there is a mix of orders in execution and a mix of margins in these orders. But there is no special event that would justify to say that something is worse than it used to be last quarter or last year at the same time. No major provision of any significance to mention in the quarter in No, paper and nothing. No, no, no. And in hydro service, is there not increased competition in hydro service given that, obviously, the equipment orders are very weak? No. I mean, obviously, yes, there are companies that may have not been as active as we have always been in the aftermarket and the service market. Small hydropower plant market have become more active there, but that has happened already a few years ago. We are I mean, it remains to be seen when our competitors are publishing the numbers. But as far as we know, I do not think that we have lost market share in this quarter and this year. So in this respect, I think is that is the consequence of that, that the competition, the price competition in the service has intensified? I don't think so, no, no. I would say it's more driven by what can we do to reduce our cost base in this area, and we have several activities going on there. And we always I would say our main competitors in the aftermarket are not the big ones, big competitors, but are the smaller local competitors. And this is unchanged basically. Okay. And this is unchanged, basically. Okay. And just finally, of the CHF 20,000,000, well, it's going to be more than CHF 20,000,000. I don't know if you can give us an idea how much bigger than CHF 20,000,000 the restructuring charge may be? And how much will go into hydro? And will this put hydro back into its margin corridor next year once you've done the restructuring in hydro? It will not be much above €20,000,000 The majority will go into metals. And we hope that hydro, we can bring them back up to the old levels. We are putting much more emphasis on the quality of all the execution in hydro also because as the prices are more come to be more competitive, the room to make the room to absorb cost overruns, certain limited cost overruns has decreased. And therefore, we must increase the accuracy of our order execution. And there clearly, I think there need to be certain actions to be taken, which are we are in a way of take to take them. And so I'm confident we can bring it up. I think it will take a few quarters. It will not take years, but it will take a few quarters. And the old margin, you mean the 8.5% to 9% target? Yes. Start the margin to start with an 8% would be the next season, next goal, yes. All right. Thank you very much. Thank you. As there are no further questions, I would hand back to you, Doctor. Leitner. Thank you very much. And we will do our best to fulfill the challenges of the fourth quarter, we are aware that we need to achieve a lot to get come back beginning of next year with an actual result in line with our forecast or guidance. Thank you very much. Ladies and gentlemen, thank you for your attendance. This call has been concluded. You may disconnect.