Good afternoon, everyone, welcome to the EVERTEC second quarter 2017 earnings conference call. Today's conference call is being recorded. At this time, I would like to turn the call over to Kay Sharpton, Vice President of Investor Relations. Please go ahead.
Thank you, good afternoon. With me today are Mac Schuessler, our President and Chief Executive Officer, and Peter Smith, our Chief Financial Officer. A replay of this call will be available until Tuesday, August 8th. Access information for the replay is listed in today's financial release, which is available on our website under Investor Relations section of evertecinc.com. For those listening to the replay, this call was held August 1st. Please note there is a presentation that accompanies this conference call and is accessible in the Investor Relations section of our website. Before we begin, I'd like to remind everyone that this call may contain forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. These forward-looking statements about our expectations for future performance are subject to known and unknown risks and uncertainties. EVERTEC cautions that these statements are not guarantees of future performance.
All forward-looking statements made today reflect our current expectations only, we undertake no obligation to update any statements to reflect the events that occur after this call. Please refer to the company's most recent annual report on Form 10-K filed with the Securities and Exchange Commission for factors that could cause our actual results to materially differ from any forward-looking statement. During today's call, management will provide certain information that will constitute non-GAAP financial measures under SEC rules such as adjusted EBITDA, adjusted net income, and adjusted earnings per common share. Reconciliation to GAAP measures and certain additional information are also included in today's earnings release and related supplemental slides. I'll now hand the call over to Mac.
Thanks, Kay, good afternoon, everyone. Thank you for joining us on today's call. We are pleased with our execution in the quarter and are excited about our acquisition of PayGroup. I'll cover some of the quarter's highlights and provide you with an update on recent developments. Beginning on slide four, we have a summary of the quarter results. Total revenue was $104 million, an increase of 6% compared to 2016, as we continued to experience resilient transaction volumes and executed well in a tough environment. We delivered adjusted earnings per common share of $0.44, an increase of 2% over last year. Given our year-to-date performance and the PayGroup acquisition, we are increasing our guidance for 2017. Peter will provide further details on our guidance change.
We also generated significant cash flow and returned approximately $11 million to our shareholders this quarter through almost $4 million in stock buybacks and approximately $7 million in dividends. I'd like to give you some more specific updates for the quarter on slide five. First, we are pleased with the solid revenue performance in the quarter. In Puerto Rico, overall revenue grew approximately 5%. Payment processing transactions grew more than 9%, but this growth was partially offset by a lower average ticket as well as merchant mix shift. In this regard, we again benefited from increased gas prices, increased government payments, and general payments growth from the continued cash to card conversion on the island. Our Accuprint acquisition continues to perform well and contribute to our revenue growth.
In June, we successfully launched our ATH Móvil business solution, and the response has been very positive, with over 5,000 businesses registering for the service to date. While this will not be a significant revenue driver in 2017, we believe this innovation enhances the ATH brand and provides a significant value to the ATH network members. In Latin America, revenue growth was low double digits. We continue to work diligently with our clients that have indicated they will be migrating to reverse their decisions through improved service and performance. While we have not yet reversed a material client's decision, we are encouraged that most anticipate further delays in their migrations. These delays will favorably impact us financially this year and importantly give us more opportunity to win them back. Turning to slide six, we are pleased to have closed on the acquisition of PayGroup in early July.
PayGroup increases our geographic presence to 27 countries, adding eight new ones and further strengthening our presence in five current markets. PayGroup provides electronic payment and bill processing services, as well as issuer processing and fraud monitoring solutions. These products are delivered via proprietary software platforms, which are developed and delivered by the company's employees in Chile and Uruguay. Their client list includes top-tier financial institutions, regional retailers, and payment processors across Latin America. PayGroup has over 300 employees working for an experienced management team, and we are very pleased to have them join the EVERTEC family. With the acquisition of both PayGroup and Processa, we have meaningfully advanced our strategy of building a unique Latin American-focused payments business, which we believe will best position the company for future growth opportunities as these markets mature.
I'll give you an update regarding PROMESA and the Puerto Rico situation on slide seven. The PROMESA board has approved the 2018 fiscal budget, which began on July 1st. The government must generate incremental revenues and achieve significant savings in 2018 and 2019 to deliver a balanced budget by 2020 that complies with the PROMESA long-term fiscal plan. While the 2018 budget goals are clear, specific details are still limited in terms of the actions to be taken and the timing. As such, we remain cautious in our outlook for the second half as the austerity measures are only in the initial stages of implementation. On a positive note, our material government contract has been renewed and our receivable has been reduced, which is an important acknowledgement that the services we perform are critical.
The PROMESA Title III restructuring process is ongoing, we continue to believe that our services are necessary to functioning government. As such, our services will continue throughout the Title III process. We are working constructively with the government, and we are focused on helping them achieve their goals. We believe we are well-positioned to assist them as they look to improve their IT infrastructure to achieve operating efficiencies in the future. In summary, we are encouraged with our year-to-date progress and look forward to the integration of PayGroup and the opportunities ahead. With that, I will now turn the call over to Peter.
Thank you, Mac, and good afternoon, everyone. I'll now provide a review of our second quarter 2017 results. Turning to Slide 9, you will see the second quarter 2017 revenue for the total company and our segment revenue details. Total revenue for the second quarter of 2017 was $103.5 million, up 6% compared to $97.7 million in the prior year. Total revenue for the six months year to date was $204.8 million and also up 6% year-over-year. With respect to the segment mix, in the second quarter, merchant acquiring net revenue increased 1% year-over-year to approximately $23.5 million, driven by growth in transactions. This growth was partially offset by the second quarter 2016 contract change that shifted revenue from the merchant acquiring segment to the payment processing segment. Excluding the impact of this contract change, merchant acquiring would've increased approximately 5%.
Revenue growth was impacted positively by sales volume growth driven by the ongoing cash-to-card conversion trend, government payments, and increased gas volumes and ancillary fees. We experienced a further decline in the average ticket as we believe economic uncertainty is affecting consumer spending patterns on the island. For the six-month period, merchant acquiring was approximately flat year-over-year at $46 million, largely due to the contract change I referenced. Payment processing revenue in the second quarter was $31 million, up approximately 9% as compared to last year. Revenue growth was driven primarily by increases in our ATH debit network and card processing volume, increased point-of-sale rental revenue, and the contribution of the contract change I referenced. LATAM revenue grew approximately 12%, reflecting strong transaction growth and increased revenue from terminal deployments. In the quarter, transaction growth in Puerto Rico was resilient, growing approximately 9% year-over-year.
In July, transaction growth was approximately 9%. For the six-month period, payment processing grew 10% to $61 million, driven by the same reasons that I previously mentioned. Business solutions revenue in the second quarter was strong, increasing 7% to $49 million. We benefited from the Accuprint acquisition, which contributed more than half of this growth, as well as increased revenue related to core banking. For the six-month period, business solutions grew 7% to $98 million, reflecting the growth related to these same drivers. Moving on to the next slide, number 10, you will find a reconciliation of our adjusted EBITDA. We incurred share-based compensation and other compensation expense of approximately $2.1 million. Additionally, we incurred approximately $0.7 million in transaction costs, primarily related to the PayGroup acquisition. Adjusted EBITDA for the quarter was $50 million, an increase of 3% from $49 million in the prior year.
Adjusted EBITDA margin was 48.4%. This represents a 160-basis-point decline in our adjusted EBITDA margin compared to the prior year. The margin is explained in more detail on the next slide. Year-to-date, adjusted EBITDA was $99 million, an increase of 5%. Moving to Slide 11, you will see a year-over-year adjusted EBITDA margin bridge for Q2. Starting from the left column, the bridge begins with the adjusted EBITDA margin in the second quarter of 2016 of 50%. Moving to the right, we benefited approximately 30 basis points from operating leverage on our increased volume. Second, we benefited from foreign currency gains of approximately $0.5 million or 50 basis points. Third, taxes, severance, and other operating expense increases were approximately 180 basis points. Most significantly, foreign withholding taxes negatively impacted the quarter as compared to the prior year.
Lastly, we were impacted by increased information security and compliance expenses that drove approximately 60 basis points, and we expect these costs to trend higher later in the year. The combined impact of these referenced items result in an adjusted EBITDA margin for the second quarter of 48.4%. Moving to Slide 12, adjusted net income in the quarter was $32 million, an increase of 1% as compared to the prior year, and primarily reflects the higher adjusted EBITDA, partially offset by higher interest expense and higher depreciation as compared to last year. Our effective tax rate for adjusted net income in the quarter was approximately 11.3% and was slightly less than our prior year tax rate of 12.2%. Both periods included discrete items that added to the tax provision.
We now expect to be at the mid to high end of our tax rate guidance range and have adjusted our expected range to 10%-10.5% for the year. Second quarter adjusted earnings per common share was $0.44, an increase of 2%, reflecting the benefit of a lower diluted share count as a result of our share repurchase program. Year-to-date adjusted net income was $65 million, up 3%, and adjusted earnings per common share was $0.89, up 6% from $0.84 in the prior year. Moving on to our year-to-date cash flow overview on slide 13. Net cash provided by operating activities was approximately $71 million, or a $2 million increase as compared to the prior year. Capital expenditures year-to-date were approximately $16 million and continue to track within our guidance.
Next, we paid approximately $10 million in principal debt payments and increased short-term borrowings by approximately $19 million in anticipation of our acquisition of PayGroup, resulting in a total net debt increase of approximately $8 million. Finally, we have paid cash dividends to stockholders of approximately $14.5 million and repurchased approximately $7.7 million of common stock for a total of $22 million returned to our shareholders year-to-date. We have approximately $72 million available for future use under the company share repurchase program, and we recently announced another $0.10 dividend to be paid on September 8th, 2017, to shareholders of record as of August 7th, 2017. Our ending cash balance as of June 30th was $93 million, and this was elevated to facilitate the July 3rd closing of the PayGroup acquisition. Moving to slide 14, you will find a summary of our debt as of June 30, 2017.
Our quarter-ending net debt position was approximately $580 million, comprised of the $93 million of unrestricted cash and approximately $673 million of total short-term borrowings and long-term debt. Our weighted average interest rate was approximately 3.6%. Our net debt to trailing 12-month adjusted EBITDA was 3.4 times, reflecting the credit agreement which limits the cash applied in the net debt calculation to $25 million. As of June 30th, total liquidity, which excludes restricted cash and includes the available borrowing capacity under our existing revolver, was $141 million. At this time, I'd like to provide you with an update on the status of our government receivables. Our government receivable at June 30th was approximately $15.8 million, which is down approximately $2.2 million from the balance at the end of 2016.
As Mac mentioned, we worked collaboratively with the government to renew our material contracts in the quarter. We continue to make progress on our collections. Before I update you on our full-year guidance, I'd like to give you an update on our anticipated Latin America client migrations. Based on updated schedules provided to us by our clients in the quarter, we now anticipate client migrations to impact our 2017 revenue $1 million to $3 million, down from our prior $3 million to $6 million estimate for the year. Due to these schedule shifts, we now expect client migrations to impact revenue approximately $5 million to $7 million in 2018. Moving to slide 15, I'll provide an update on our 2017 guidance. We are increasing our revenue guidance to a range of $411 million to $417 million, representing growth of 5% to 7% over last year.
This increase reflects our stronger year-to-date performance, the timing delays in Latin American client migrations, and the impact of the PayGroup acquisition. Regarding PayGroup, our revenue guidance assumes $8 million to $10 million in revenue for the remaining six months of 2017 for an anticipated annual revenue of $20 million to $22 million. Our assumptions regarding the deceleration in transaction volumes in the back half of the year in Puerto Rico remain unchanged as austerity measures are just now being implemented in Puerto Rico. Regarding margins, we continue to anticipate adjusted EBITDA margin to be in a range of 46% to 47%. This range, however, includes the addition of PayGroup, which operates at approximately a 20% margin. Now we anticipate to be in the mid to lower half of this range.
Our adjusted earnings per common share outlook increases from our previous guidance of $1.54 to $1.67 to $1.63 to $1.71, which represents a range of -2% to 2% as compared to the adjusted earnings per common share in 2016 of $1.67. The impact of PayGroup on adjusted earnings is anticipated to be neutral in 2017 and modestly accretive in 2018. We have had a solid operating performance in the first half of the year. We are encouraged by the continued resiliency of payment transactions in Puerto Rico. We continue to cautiously monitor the fiscal situation in Puerto Rico, we are focused on the successful integration of PayGroup and our execution in the second half of the year. We'll now open the call for questions. Operator, please go ahead and open the line.
We will now begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question comes from Bob Napoli of William Blair. Please go ahead.
Thank you. Nice execution on the quarter. Again, just the PayGroup deal, the growth rate. What type of growth rate do you expect out of PayGroup, and can you grow the margins over the next several years materially?
Yeah. Bob, this is Mac. Thanks. I'll try and answer that and then see if Peter's got anything he wants to add. PayGroup, our intent is we're now in eight markets we were not in before. We think it's a great opportunity. They've got some great fraud products, some other great payment solutions to cross-sell those into markets where we are today where they don't have a presence. To also take our EVERTEC products and move those into Chile and Uruguay and some of the countries they're in. Our intent and our focus on integrating the acquisition will be to come up with a strategy to make sure we accelerate the growth.
We're not giving guidance right now for 2018 and in the future, we do believe the revenue synergies are meaningful with the acquisition, and it creates a brand new company as it pertains to Latin America and our footprint, our credibility, and our Rolodex. They do business with some of the largest banks, some of the largest retailers in the region. We do believe that we can create meaningful growth by combining our businesses. As far as margins, this is really about growth primarily. I'll see if Peter has anything else to add.
Yeah, I think Mac summarized that very well. The only thing I'd add is as a payments company, it does have the ability to scale provided more transactions come on as platforms. It has the same characteristics for approximately 60% of the business. The other side of the business is a software business where we are selling fraud and issuing solutions, and we're in the process of transferring that over to a processing business. Over time, that too will be able to achieve the same sort of scale and margins that we have in our payments business.
What portions of PayGroup would you consider to be recurring revenue? Which buckets will we see that revenue in? Between merchant acquiring, payment processing, business solutions, I'd imagine the revenue will fall into those same three line items.
We're planning on having it's predominantly all payments company, Bob, so we're planning to have it in the payment segment. With respect to recurring, the portion that currently is not recurring is some of the software sales in that business. As I mentioned, over time, we're planning to create a processing business out of that, and that's our near-term objective with the company.
Well, they're already in that process. They've already started with a fraud product to create a processing capability versus just license, and they rolled out their first customer. Then we're looking at doing the same with some of the other payment software.
Thank you. Just last question on the austerity side. It seems like there really hasn't been much austerity. The only austerity has been to reduce debt at this point. What you were assuming as far as a revenue hit in the back half of the year from austerity.
Yeah. Bob, you're right. We haven't seen the austerity to date really impact the economy because there haven't been significant measures taken yet by the government. That is inevitable. We do believe that that's going to be something that particularly beyond this year will impact the business, but we haven't seen it to date.
Yeah. I'd just add to what Mac said that as of now they've eliminated certain temporary positions that were working for the government. Over the next two years, in order to fix a $3.4 billion deficit, there's a plan to eliminate approximately $2 billion of costs. The details of that at this point are unclear. They're initiatives, but we don't have details on the specific plans which they're working on and which we expect to hear more on shortly.
I'm sorry, the revenue in the back half of the year revenue hit?
Yeah, sorry, Bob, I was just getting to that.
Sorry.
We've maintained our same projection. We had a good July, as you know. As the austerity is just commencing, we've left our guidance the same, which was 3%-6% of our transaction volumes we're expecting to fall off in the back half of the year.
Great. Thank you very much. Appreciate it.
Thanks, Bob.
The next question comes from James Schneider of Goldman Sachs. Please go ahead.
Good afternoon. Thanks for taking my question. I was wondering if you could maybe give us a little bit of an update on the payment business in Latin America, ex Puerto Rico. Specifically, can you give us an update on how Processa is doing and I guess just in terms of the overall competitive environment out there, given some of the delays you've seen in the client migrations, do you feel better about your ability to kind of maintain or potentially increase your share over the long term outside of Puerto Rico in those markets?
As we talked about, it grew double digits this quarter. Processa continues to perform well. What I would say with client migrations, we haven't retained any significant accounts, but we're still very focused on that. The longer they delay, the better for us, not only the financial impact, but the ability to work to retain those. I think we're very well positioned as these markets open up. I think this acquisition in particular gives us products that we can approach some of the Colombian banks with now in addition to the Processa products and the EVERTEC products. I do think you're going to see these markets change. I do think you're going to see the regulatory environment create a catalyst for banks to look for different alternatives.
I'm incredibly excited with now the talent that we have in Colombia, that we have in Chile, that we have in Uruguay, combined with our Central American folks, primarily Costa Rica, to take advantage of those opportunities as someone that has a broad set of products, a strong regional footprint, and a history with some of those banks that will demonstrate that they can count on us. It really gives us a seat at the table, I think, as the market matures.
Thanks. Maybe as a quick follow-up, you talked about improving collections on the solutions side. Kind of any more visibility there on whether you're expecting any impact on that business due to the austerity or Sounds like in the past you've talked about those contracts being fairly essential to the ongoing operations within Puerto Rico. Just any color there you have on the macro outlook and how that ties back to solutions would be helpful.
Yeah. This is Peter. We're very pleased to have worked well and constructively with the government to renew our material contracts, and we continue to make progress on collections with them. What is unclear right now is really the new opportunities that the government will implement to achieve their efficiency goals. We're actively working on some initiatives, but at this time, it's unclear with respect to the timing. We do anticipate to continue the same course and speed with respect to our collections and progress, but that's all subject to the Title III process. Given the critical nature of our services, we feel confident that it will continue as it has this past quarter and historically.
Yeah, this is Mac. I would just add to reiterate what Peter said. We have found the government very collaborative with us, and not only do we say that qualitatively and kind of feel good about it because we have the right people on the ground and we're having the right conversations, but I think this quarter it's apparent in the fact that they're paying us better than they have in the past and that these contracts have been signed. Again, more to come.
Thank you.
The next question comes from Bryan Keane of Deutsche Bank. Please go ahead.
Hey, guys. Congrats on the solid results. Wanted to ask just on the follow-up on the austerity, how would it impact, or do you guys model it out for the three segments, the impact? I'm just trying to think about, are you guys being too conservative, too aggressive? I just want to get the impacts by all three of your business segments.
Hi, Bryan. It's Peter. I think at this time, as we've mentioned, it's the actual actions that the government are taking are not clear, as well as the impacts on the economy. With respect to the segments, we would anticipate a overall decline in the transaction amount, and the sales volume on merchant acquiring, which would reduce revenue. With respect to payments, we'd anticipate a decline in transaction volumes, which would also reduce revenue. As I mentioned, what's still unclear is how we can participate in any of the initiatives that the government is going to take, which could potentially improve the business solutions segment. That's how we would view the impact of austerity as we look out, and we'll continue to update that as we learn more.
I guess I was thinking maybe it's possible that transaction volumes don't drop as much as you guys anticipate in the second half, even with the austerity measures. Is it just as simple of fact that the consumer spending is going to drop once the austerity measures take place?
Bryan, the hard thing is if the government lets go tens of thousands of people, the ease of migrating to the U.S., they buy a plane ticket, and then they immediately start spending in Florida or New York. I think it's very difficult to predict, and we're sort of uncharted territories. The direct impact to the government business, we've put the contracts, they've been renewed. The economic impact when you have some labor cuts in the government and what that does to the economy, and is that offset by economic stimulus, that's difficult to predict.
I think Mac there is projecting out in the next couple of years here. With respect to the rest of the year, I think we have been cautious. We have not experienced, as of now, an impact on our transactions, as you know when we talked about the July numbers, and we hope that continues. Just given the uncertainty, we've left the range the same.
No, that's helpful. Just finally, Peter, on the guidance raise on the top line, was that just the addition of PayGroup and the push out of the Latin American migrations?
It really consists of three things. One was just the stronger-than-projected first half and the delays which combined equate to about $6 million, and then we've added $9 million for PayGroup to total 15, which is the midpoint of our range.
Okay. Helpful. Thanks, guys.
Thanks, Bryan.
The next question comes from Tien-tsin Huang from JP Morgan. Please go ahead.
Hi. Thank you for the update. Just on the migrations, is it fair to say that, I couldn't tell from the tone, Mac, is there a greater probability now that maybe you could retain some of that business given some of the conversations you've had, or is this just a push out?
Yeah, no, at this point it's a push out. When we feel confident we're keeping some of the accounts or if we're able to, we would communicate that. These migrations take time. Some of the accounts have already begun to migrate pieces of the business, but we just haven't seen the whole thing leave. The numbers that Peter gave at sort of the beginning of the call are what we're thinking about for 2018.
Understood. Okay. Just big picture pipeline question around inorganic and organic deals. I'm glad you got the PayGroup deal done. What else is out there? What's your appetite and how quickly can things move?
Yeah. From an M&A perspective, since Peter and I started here, that's been a focus for both of us, and we've done four deals, I think, since we've been here. We continue to look for opportunities throughout the region. What I would tell you right now, though, we're very focused this year on integrating PayGroup, and that'll be our focus.
Fair enough. Thank you.
Thanks, Tien-tsin.
The next question comes from Vasundhara Govil from Morgan Stanley. Please go ahead.
Hi. Thanks for taking my question. I guess just going back to your comment about guidance including sort of a 3%-6% transaction growth in Puerto Rico for the back half. Is there a way to sort of translate that into what impact it might have on revenue, given that there's mix shift going on and average ticket sizes are coming down?
Hi, Vasu. It's Peter. I think it's a bit of an inexact science, but with respect to transactions as we look at it's slightly more than the one million per %. That's how we view it. Again, it depends on quite a lot of factors.
Got it. I think there were some tax reforms that were announced as part of the budget, including something on B2B and then some income tax, sort of a relief. Do you foresee any impact from those on your business revenues or expenses?
With respect to those tax, we don't. Those changes we are closely monitoring however a broader tax reform initiative which is underway and to the extent we think that will impact our business, we'll make people aware.
Understood. Then just the last quick question I had was that I think it's been about a year since legislation went into effect to increase electronic payment acceptance in Puerto Rico, if I have that correct. Clearly transaction growth in Puerto Rico has benefited from that over the last few quarters. Is there a way to isolate how much acceptance growth you've seen as a result of this legislation and how that's been contributing to transaction growth? Now that we're kind of lapping that legislation, do you expect that to have an impact on softening growth rates at all?
Great question, Vasu. That's what we're focused on. As you've seen our transactions jump from essentially a 3%-5% range up to anywhere from 8%-10% since the legislation went into effect. It went into effect last July but really did not kick in until August and thereafter. We're very focused to see as we do lap it, how much of that is sustained and pulls through versus what we would attribute to the legislation.
These are typically smaller merchants. Doctor's offices, attorney's offices. If we look at where our biggest growth is, it's still the traditional categories that Peter and I mentioned earlier, right?
Yes. Moreover, there are initiatives in the budget and the fiscal plan to create a broad capture of sales tax. So we're very interested in any initiatives around that. Again, at this time, we don't have any concrete plans with respect to that. Potentially that could help us down the line.
Great. Thank you.
Thank you.
If you have a question, please press star then one. The next question comes from George Mihalos of Cowen. Please go ahead.
Hey, guys. Nice job on the quarter. Just wanted to ask on the deconverting accounts, can you remind us how much lead time you generally need for that deconversion to go through?
Yeah, George, this is Mac. It varies. It depends on the services that they're exiting, but it can be anywhere from 6 to 18 months. It can be significant. They've got to go out, go through an RFP process, which can take 3 to 6 months. You've got to go through a negotiation process, then a conversion process. From the point that they decide they want to do something till the day you see their last revenue exit, it could be multiple years. That's what we're experiencing with some of these customers. That's how earlier in the call, the question, we know some of these are moving because they've already moved into the process. They've tested some of the volume but it could be a multi-year process.
Okay. That's helpful. Just wanted to ask in terms of growth in Puerto Rico, given the austerity coming on in the second half, is your expectation that growth will decelerate third quarter go into fourth quarter? Or is it really more of sort of a 2018 event where the austerity will kick in?
We've projected a decline in the third and the fourth quarter. We maintain that. However, as we noted, the transactions in July have held up. We would anticipate the austerity to come in gradually and increase over the next two years. That's going to be the profile of the initiatives that are required by the fiscal plan.
Thank you.
Thanks, George.
This concludes our question and answer session. I would now like to turn the conference back over to management for any closing remarks.
This is Mac again. I want to thank everyone for joining our call today. Thank you for your support, we look forward to talking to you in the future. Have a good evening.
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines. Have a great day.