Eurofins Scientific SE

PAR:ERF

Ladies and gentlemen, welcome and thank you for joining Eurofins 9 Months 2023 Trading Update. Please note that this call is being recorded and will later be available for replay on the Eurofins Investor Relations website. Throughout today's presentation, all participants will be in a listen-only mode. [Operator Instructions].

During this call, Eurofins' management may make forward-looking statements, including, but not limited to, statements with respect to outlook and the related assumptions. Management will also discuss alternative performance measures such as organic growth and EBITDA, which are defined in the footnotes of our press releases. Actual results may differ materially from objectives discussed. Risks and uncertainties that may affect Eurofins' future results include, but are not limited to, those described in the Risk Factors section of the most recent Eurofins annual and half-year reports. Please also read the disclaimer on Page 2 of this presentation subject to which this call and Q&A session are made.

I would now like to turn the conference over to Dr. Gilles Martin, Eurofins' CEO. Please go ahead.

Thank you, Bernard, and hello, everybody. So I'm pleased to report on a good quarter 3 results for Eurofins. Eurofins has been handicapped by the impact of the disappearance of COVID revenues that we had in a large amount in 2021, and lesser amount in 2022. What we see in this quarter, this is behind us. We have a very little base effect from COVID and the following quarters will be the same. So now we're moving to situation where we compare apples to apples on our overall reported figures, which is a good thing.

Our business is doing well, considering the economic situation, which is still very subdued in Europe. We see some recovery in food testing in Europe. We have an overall continued good growth in America. We've heard comments about biopharma, a lot of misunderstandings about biopharma. We did already answer those questions, but a lot of people apparently haven't -- were not there on the call or forgot our biopharma is -- and to the very early research where biotech is very present. The bulk of our biopharma testing business is biopharma product testing, which occurs either in later phases or for products that are already in the market.

And in the later phases, the product is already a high value for the pharma industry. And they are usually no longer developed by biotech. Biotech have been sold at this time or they have licensing agreements with big pharma. Big pharma is very well funded. And when products get beyond Phase II, the likelihood of failing is much less. So the interest of biopharma is not to cut spending on that. There is -- spending cut is more in the much earlier riskier phases. And we do see some softness in discovery, the earlier phase, which is about EUR 150 million for us, which we have flagged previously.

What we have seen in biopharma. Of course, we had also a lot of COVID-related work on vaccines and so on, and that has gone, and we hadn't counted that as COVID revenues. So that has a bit -- handicapped our overall growth over the last, I would say, 4 quarters since mid of 2022. But that is anyway in our numbers and nothing changed on that. So we continue to see a good trend in biopharma, a good outlook. Maybe not the explosive growth that we had in some of our segments, Discovery, had explosive growth in '21 and '22. There's not the same explosive growth in that small segment of our biopharma business. So that's just for reference.

So the falling off of the COVID work at Eurofins in biopharma is many quarters back. We already had that impact for a while. Just to clarify some misunderstanding on our biopharma business. It is -- the biopharma industry is very well funded. They need to get more products to the market. Research is leading to fantastic products, as you have seen with the weight loss product. There are many, many products in the pipeline in oncology. The biopharmaceutical presents a lot of potential.

So we don't see the biopharma stopping developing or reducing significantly the development, there may be a bit less money wasted on many, many candidates in the earlier phases by small biotech, but that doesn't change anything to the big trend in biopharma that there are exciting opportunities to make our lives better through very powerful products that are either now in development or will come in the next few years.

So that's for biopharma. So good outlook there, except, of course, Discovery since 5 or -- 4 or 5 quarters have been much softer. On the global organic growth, as we discussed. So the situation remains better in North America than Europe. Europe has been facing headwinds from the consumer impact, the key impact on consumers of inflation and it might be getting a little better. We're going to get to a better base effect anyway in Europe in food testing because now the following quarters are going to be compared to quarters where -- which were already affected by that last year.

On geographically, we've had questions on what happened in rest of the world. Well, I think this is like a very small effect. It's a small perimeter, but we had somewhat misclassified some clinical revenues in Asia, probably in Japan into non-COVID that were COVID related. So we've had a few COVID-related revenues in Japan and potentially also clinical revenues in Brazil that were less this year than last year that had an impact. We had an impact on Discovery in Taiwan, as I just mentioned.

We don't think any of those things are trends, just more corrections. And we're not talking of a lot of money, but there is a percentage, it can show on a small scope. So that explains the slightly softer organic growth in Asia. There are countries doing very well. Our biopharma business in India is doing very well. China is doing well for us. Our consumer product is maybe growing a bit less than the other activities at Eurofins, but overall, things look good.

The -- so we have a slide show. I'm not going to go through every page of the slide show. That were my comments on Page 3. On Page 4, you see the breakdown. So of course, we're missing a lot of COVID revenues that we had last year. But that's the first time we have that. You see a good chunk of organic growth this year. The question, what is price, what is volume? I would say price is playing now a bigger role.

We're maybe at 50-50, although we can't really quantify it, we can start to quantify it in our sample-based business, but our project-based business like biopharma, it's quite hard to find the proper metrics of organic volume growth and price growth because each project is different. They're not comparable between each other. But we're working on something, and we do hope to have that through our systems in a way that is reliable and auditable in the future.

On M&A, contribution is less than we potentially thought we would consolidate. For the full year, we have a target of EUR 250 million pro forma revenues that might not be consolidated in the full year. We haven't given up on that. It could be that we do hit the pro forma. It depends on timing of certain deals we're working on. Anyway, when we gave our objectives for organic growth, EUR 6.5 billion and M&A, EUR 250 million per annum, it's on average over 5 years. And our view is that the price of acquisition is going to become more attractive going forward.

We see many deals that were supposed to close with competitors that didn't close that come back to the market. So people -- but the prices overall have not yet come back to where they should be. So we prefer to stay disciplined and on the [sign] line, and we know those opportunities are going to come back because very few companies have the right IT, digital infrastructure and the tools to really extract synergies from lab networks. So a tougher economic environment is going to be very attractive for us on the M&A side over the next 2 or 3 years, we believe, especially if the subdued growth continues in Europe, and so we are very well placed to take advantage of that.

But we're not rushing into that. We are disciplined. Our focus is return on capital employed. So we will see. But over the next 5 years, we still think we can, on average, acquire EUR 250 million revenues from acquisition per annum and the timing of that for external things like acquisitions, of course, is slightly difficult to know. But we'll see what we can close or sign in Q4.

On Page 5, we just give a few examples of innovation. We continue to invest a lot in R&D to launch new technologies, new tests and deploy new tools, automation, digitalization, artificial intelligence. We have more and more areas where we can deploy artificial intelligence. We talked about our environment business with asbestos testing previously on Page 6. You see also what we do in discovery for developing or identifying which molecules is likely to be successful in the later phase. And we have a vast database of data of early-stage discovery data that we start to apply AI models for clients to reduce time to market and help them choose better, faster the candidates they work on.

So Eurofins has amassed over the years, a huge amount of data in all our verticals and all our activities. And now we start to be able on various areas to apply AI models to make the work faster or give better predictive information to our clients.

On Page 7, we're basically, we just -- we confirm our objectives where we think we'll achieve the -- what we had planned for this year. Of course, what biggest unknown is what currencies will do. And I think I'm not the only one to not know what currencies will do in the future. It was debatable after H2, we adjusted the objectives for the currency. Maybe we should not have adjusted objectives for currency after H2. I think potentially it's something we should not have done. So it surprised some people because anyway, we don't know what currencies will be in H2 until the end of the year. And so that's why we give a range for revenues, just to -- so you have a number.

In terms of organic growth, we continue to believe in this objective and also in terms of profitability and margin. And going forward, we think this objective of 6.5% organic growth is achievable and for a number of years as a secular objective. Already commented on M&A and we have a lot of assets that will come online. We have a lot of investments in pharma either being built or waiting for validation. We have a lot of start-ups that are underutilized and costing us money, and some of them also are in mature perimeter, but they have not yet hit the level of 20% or 25% EBITDA. So we're confident to be able to increase our margins over the next 4 years -- 5 years until 2027.

So there's no change to our outlook. And of course, with the uncertainties in Europe, et cetera, we've been more frugal. We've been -- when we're doing our budget for next year, we are, of course, asking our leaders to be -- to focus more on cost. We can always add cost and people and capacity later. So we are confident that even in more troubled economic environment, we can continue to deliver very well to deliver significant organic growth even in economies that don't grow. We think we can continue to deliver good growth and gradually improve our margins and our cash flow because all those investments we do, once they are done, they are done.

We have very little investment in maintenance CapEx. Our maintenance CapEx is 2% to 3% of revenues. So all the things we invest they are there because they add capacity or they make us leaner or more efficient.

So that's it for my introduction. I think I've addressed the questions that I had received or I had a question of 1 public working day. What does it mean in terms of correction? Well, most of you will know that in the quarter, we have anywhere between 62 and 65 working days. So 1 day of that is about 1.5%. I think you probably got that. And for the 9 months, 0.5%. That's it for that question. I think I've addressed most of the questions I have received so far, I've heard about, but I'll be happy to answer any other questions. Thank you.

[Operator Instructions] The first question today is coming from Suhasini Varanasi from Goldman Sachs.

Two for me, please. It's one on GLPs and its implications for food in the medium term. I appreciate it's very early days still, but it would be helpful to get your views on this. Do you see GLPs having a negative effect on food testing volumes medium term? Potentially also in clinical diagnostics may be offset by maybe more growth in biopharma. It would be lovely to get some color there.

The second aspect -- second question is on the objectives for the year. I appreciate you've reiterated the objectives. I think there is still a little bit of concern in the market around the risks to the objectives, especially on margins and cash. Can you maybe elaborate on the degree of confidence that you have there and the risks that you see?

Thank you very much. We don't think that the GLPs or the, what is it called, drugs to address diabetes, obesity and so on will have a major impact. I think there are an example of the huge potential that biopharmaceutical products have to make our lives better and enable people to prevent or manage chronic diseases. And I think it's an example that all the biopharma companies, of course, are looking at when they are working on other products in the different areas, oncology being one and CNS, et cetera.

So I don't see really an impact on food. I mean, of course, it could be -- it could affect one food category compared to another food category. But in the end, people need to eat, and they will eat something else. There is the move towards more health -- I shouldn't say healthier, but because that's a very personal choice, but foods that are less processed, more [indiscernible] tested to not contain various contaminants that they are tested also for their nutritional qualities. Especially, there is a big increase towards the supplements and the nutraceuticals, et cetera. All those products require more testing. All natural products require more testing than and they might be produced in smaller batches also than the very standard packaged goods.

So if anything, that could lead to more diversity, more natural products and less -- and maybe more testing. But you know, it's an educated guess. That's all I can say about that. I think, as to objectives, nobody can predict the future. But we think, things look good for our objective. There is also upside risk as well as things could happen with the war or anything could happen very unexpectedly. I think there are always -- it remains an objective. It's not in the bank until it's in the bank. But we are confident that we should be able to achieve that.

The next question is coming from Allen Wells from Jefferies.

Just a couple from me, please. Could you maybe just talk a little bit about or if you can kind of provide some insight into the magnitude and just levels of food recovery that you saw in Europe in the third quarter? That's my first question. And then secondly, I know you don't talk openly about kind of margins at this point. But just maybe just talk a little bit about kind of the price and cost inflation dynamics that you're seeing in the third quarter and how that trended during that period as well?

It's not really a full recovery in food. It's getting a little bit better, especially towards the end of the quarter. I think -- and so it's difficult to extrapolate. But in spite of that, if we did have good growth. So that means, of course, if food recovers more, things should look better. We still have the same more or less trend as in the other quarter. And the faster growth is on biopharma or slightly faster growth than we do relatively well in environment in terms of organic growth, both in Europe and North America. Clinical is more challenged because we have a significant routine clinical diagnostic business in France, which is price controlled.

So that's, I think, the -- but in the mix we get what we get, which I think it's above our objective. It's quite, I think, pleasing to see that even in a tough year like this, with a lot of headwinds in many areas. We still are at 7.5% growth, so 100 basis points above our objective. I think it's in spite of that.

And margin, margin in and out, we -- margins are such that we think we should hit our annual objectives. The -- we're doing much better this year in compensating inflation, and it depends, of course, on each country, each market. We have a number of areas that are work in progress. And that's -- when you look at the overall margin, they are the average of many things. And that's also one of the things that makes us very optimistic for the midterm margin improvement is the margins you see include number of businesses where we are doing integration. Where we have had maybe some management change that are severely underperforming or loss-making and that we are in the process of really turning around.

When you -- we talked a lot about the big transformations in North America, where we merged our food testing network with that of Covance Food Solutions, where we merged Test America with our own environmental listing market, and that cost us tens of millions of operating losses and disruption and lost revenues when we move business from lab to lab. We are doing that in a number of countries. We're doing that in the U.K., we're doing that in Ireland, smaller countries. The overall impact on the group is not massive, but we do have those impacts. And when you add them all together, they are material, and they have a material impact to our margin. And those things are one-off in essence.

Once we have the labs in the right place, now, for example, in Ireland, we had a number of labs we've consolidated into Cork. We have a brand-new lab now for food and environment. Also, we've done a consolidation.

So -- and those things cost us million. We moved -- there were some food testing business in Ireland that we are carrying out for companies in Ireland, both in the U.K. and North America that now we have set up in Ireland. That was transferred. It took 2 years to get all the accreditation because it's highly sensitive testing, and now it's done. It's moved to Ireland.

So we have a lot of those things that have impacted our margin in the past, and that do still impact our margin, but that are finite in the time it takes to do it. Once the labs are moved, are working, have their accreditations, the clients are satisfied then we have a much more stable situation and better utilization of the labs and those things that are still ongoing, and that's why our margins this year are significantly lower than where we think they could be, and they will be and they should be.

And can I just have a very quick follow-up just because you touched on diagnostics. Could you just maybe give us a little bit of update sequentially how the French Diagnostics business is looking, obviously, you talked a little bit about earlier in the year, investment in by the collection points. Are you seeing sequentially an improvement in that French diagnostics business in the third quarter? And then maybe any update you can provide on the latest round of kind of budget discussions, which I think start again going into the end of the year or early next year as well.

Yes. Actually, we have much more visibility on that business now than the beginning of the year. There were some cuts this year, which I think started in February, mid-February and maybe second around early April, which will bring down, I think, cuts like 3% or 4% on the reimbursement price. Of course, this each year is compensated by volume growth. Volume was very subdued in second quarter. It has started to pick up in the third quarter.

So doctors had also instructions to prescribe less testing. So that business did not do well at all in the first half of the year and is starting to do better in the third quarter, although it's not really where it should be.

And for next year, apparently in the next couple of years, there has been a frame agreement signed, which limits the costs quite significantly. I think the cuts would be more like they want to have a flat budget or a budget that doesn't increase more than 0.5% or in that range, around flat, minus 0.5%, plus 0.5%. So we're not looking at the same significant cuts that we've incurred this year for next year and the following year. Of course, things can always change, but that's the latest I've heard about that.

So that's ability on that -- and lots of potential for rationalization were we're investing actually because M&A is very expensive in some countries. And so in that case, that's why we open blood collection points in many geographies, which are better alternatives to buying companies at prices that are not justified and where their networks of BCPs might be too old or in the wrong place. And they are, there are some countries where we really now have learned this alternative between organic growth and M&A and we balance it. And I've been running labs for 35 years.

I've seen enough cycles, enough phases where valuations of acquisitions were excessive, patients, you're seeing improve your operations and then there's always a time where acquisitions become more attractive and provide over 2 or 3 years a very good return. So we're doing that globally. We have the experience now of doing startups. And when they when we can expect the payback and so we can arbitrage between acquisition, start-ups on all of our verticals.

The next question is coming from Dominic Edridge from Deutsche Bank.

Just 2 quickly for me. I know you gave some numbers on the size of the Discovery business. Would you mind just giving us an idea of the breakdown sort of the generality of the biopharma business between the key parts. Secondly, I know you got -- I know you have the PSS business with inside biopharma. Do you regard that as sort of a leading indicator on industry activity there? And if so, what are you seeing in that regard? And then the last question is just the visibility on revenues and activity levels in the product testing business going into 2024. Can you just say where your utilization is currently and maybe what you're seeing in terms of business negotiations and contract negotiations going into next year?

Well, our discovery is, as I said, something of the order of EUR 150 million. The biggest part of our biopharma is biopharma product testing, that's probably 60% or 60% plus. Then we have a segment on CDMO in biopharma, which is also of the order, I think, of EUR 150 million. We have medical device testing, which is small. We have PSS, but PSS, Professional Scientific Services, as you mentioned, is also mostly that the biopharma product testing. So it's -- we're not doing so much discovery there. We're doing some -- we have some bioanalysis. We have 1 central lab, biopharma Central Lab, which is also about EUR 100 million business.

Then we have Agroscience, which we put in our biopharma area, which is also EUR 150 million business, which is fairly flat at the moment. We have a genomics business, which has been suffering post-COVID. We did a lot of COVID work there. We have forensic testing, which is DNA testing a large part and a drug testing, but mostly for the government. So those are the various parts.

So I would say, overall, it's very much a late stage. We are -- that's why we're not so affected by the -- maybe the slowdown in biotech funding that affects discovery. Discovery, of course, we've had 30% growth in Discovery, I think, in 2021 or 2022, '21 probably. And it has been this year, either flat or slightly negative or part of our business.

As to PSS, well, our PSS business is doing fine. And as I said, it could be that it's because we are focus on the PSS business is also late stage rather than early stage or it could more be actually more likely that the clients are big pharma. And big pharma is not, okay, Pfizer has announced layoff because they were very exposed to COVID vaccine, but big pharma has a broad range of products and biopharma is doing well. It's well funded. And if we work on products that are in the later stages, they want to get those products to market as soon as possible. And therefore, we don't see softness there. The overall biopharma might not be as explosive in terms of growth as it was 2 years ago. The segment we work for are doing well.

As to the outlook for next year, we will have our budget meetings in the next few weeks, and I will know more. If you're going to one of our Investor Day, either tomorrow in Milan or in Tustin in California, in 2 weeks then or 3 weeks I would invite you to talk directly to our leaders of that business line. They will be present, maybe mostly in America because America is where the largest part of the biopharma market is. You can talk to them directly. I haven't heard anything negative. The first draft of the budgets are actually looking quite good in terms of growth. So I don't think they're pessimistic, but that's all I can say today for 2024.

The next question is coming from Delphine Le Louet from Societe General.

Question on my side. Just a follow-up on what we discussed regarding the start-ups and the BCP issue. Can you get through us to the business model underlying of these 2 startups in terms of size, revenue objective just for us to get a better understanding of the future growth coming out organically, I would say like that? And can you also confirm the fact that 34 start-ups. So far, you had 50 last year. Is it -- probably 50 is the right number for integration and launching so far at Eurofins. And on the BCP, can you tell us exactly where the 30s has been opened? Is it widely spread around the world? Or do you have a region which is more let's say, sensitive to be opening.

Secondly, I was wanting to have an update on your side with what regards in Israel, in the region, and mostly to Egypt. And so I was wondering if you have any slowdown in business in food testing for any food that could go into the region, firstly? And if you can also make an update about the Russian-Ukraine situation, and if you have a sort of a normalization there or where we are? So that would be okay on my side.

Thank you. Start-ups are pretty much everywhere. It's a mix of different things. We have, of course, a lot of regions in the world where we cannot do acquisition because there's not such a big biopharma or food testing industry or environment. So we have a lot of start-ups in Asia. We're opening -- China is a big market. So we are not, of course, in every city, especially Tier 1 and Tier 2. We're trying to cover more geographically. India also adding labs. We're adding a lot of labs still in North America. We don't cover the whole of the U.S. and Canada. We are also adding labs in Europe, where we are missing our presentation. In clinical, there are some countries, Spain, Portugal, more Southern Europe, France, U.K., Belgium, where we are adding BCPs, and we're adding labs.

So that's about the footprint. We had also, I think, in the U.S., some -- it's not really BCPs, but geographic coverage in clinical diagnostics in some areas. We're also -- not all the start-ups are successful and some start-ups, we decide, okay, after 24 months or 36 months, they -- that's a minority or a very small number, but we also have been have had to stop some start-ups if they don't work out.

So we're not like stubborn in that. But if we see an opportunity and there is no M&A in the right place or the M&A is too expensive, we do a start-up. That's a rationale. That's why we're planning about EUR 100 million to -- of separately disclosed items. That's about the level of the loss investment. The bulk of it is on startups that we incur. We also have start-ups like [TDI], where the bulk of the spend is expensive, either for clinical trials. So we have probably a cost of EUR 6 million to EUR 10 million to carry out further clinical trials to get a much more solid reimbursement for our test with broader indications. There have been changes unfortunately, of how reimbursement work for that.

And so we are addressing that with a 3-year clinical trial.

Cost quite a bit of money. But of course, that market, if we get the right reimbursement can be extremely worthwhile.

And the situation, Israel, Egypt is very, very horrible and sad. We don't have material presence in Israel or Egypt nor did we have in Ukraine or Russia. We have a small biopharma activity in Israel, very small, not material at all. I think smaller than EUR 5 million. Food going there, no, we haven't -- I mean it's not really material, what we're doing for those flows. We're not really testing commodities. We're testing more food for consumptions in Western markets. We do very little testing in Africa or developing markets anyway.

Perfect. If we move on to that topic and specifically to the Bio, there is a massive collapse of the bio demand in Western countries due to inflation prices. Have you seen any slowdown on this one on your side?

Oh, yes, I think it was part of the overall softness we've seen in food testing. The softness was more pronounced in Eastern Europe and Germany especially Germany has been going through tough times. Overall, the consumers from the cost of energy, I mean, Northern Western Europe has been affected by massive inflation on food prices, but also on energy. And when people spend more money for energy for heating their house, then they might have as money to buy food. And that is what we've been seeing for a number of quarters.

But no, I think we're more in a situation where we have hit bottom in terms of shifting to cheaper products. People have to eat something. And overall volumes are not down, people are consuming. They just maybe consume different things.

Okay. Okay. And the last one on my side. Just changing completely on scope and regarding the new Peekaboo testing, gender testing as soon as 6 weeks of pregnancy. How big is the market? And how would you qualify the demand? And can you give us an idea about the pricing and just for us to get a better understanding there.

Yes. Well, this is mostly North America. And I think it's $100 million market maybe, of which we have a significant part, maybe between 20% and 40%, something like that, although we don't have the full statistics. And I mean it shows what can be done and more could be done in terms of early diagnostics. This is diagnostic we do with finger prick blood. So people don't have to go necessarily to a blood collection point. We're also using a shoulder blood sampling device. And I think the price is around $50, between $20 and $50, and we have partnership with Amazon and other distributors and that's not a medical test. And this is a test, you could say, convenience tests when people want to know the sex of the baby at 5 or 6 weeks.

And it's -- there is demand and there is growing demand. But we do other things. We do noninvasive, paternity testing. So we have a range of direct-to-consumer tests. On the medical side, direct-to-consumer testing is picking up very slowly because it's usually not reimbursed by insurance and people will -- who have coverage they are reluctant to spend extra money for that. But there are some segments of clinical testing where direct-to-consumer is working.

We see some examples. We have to balance that with the cost of customer acquisition. So we developed those activities on whether it is for convenience. It can also be for testing your well water, testing the air in your house. There are a number of things that consumers are interested and prepared to pay but it's a small market. So it's really niche markets, and we have to address each niche market with the specific strategy.

Thank you. And we will take our last question from Arthur Truslove from Citi.

Just one for me. Just obviously we touched a little bit on margins earlier. And I just wondered whether there have been any change to your expectations around the quantum of exceptional items or separately disclosed items that we like see in the course of this year relative to what you said at the half year. So I just wondered if you could provide some clarity on that?

Thank you, Arthur. No, we still think it to be of the order of magnitude of EUR 100 million. And as I say, this is an arbitrage that we do. There is part of it, which is a reorganization and restructuring to get our right network, hub and spoke network, to have big lab, efficient labs and the other part is for start-ups. So we think it's a good investment start-up to provide about 0.7% to organic growth. That gives you also an idea of the payback here we have in the slide show the regular slide shows some information on that on the return on capital employed of start-ups and we intend to continue to provide that going forward. So yes, that's for is the [how and why] we do it.

Thank you. And this is all the time that we have for today's question-and-answer session. We would like to turn the conference back to Dr. Gilles Martin for closing remarks.

Well, thank you, everybody, for joining the call. I think we are starting to get in a better situation with better comparable, better based situation. The COVID is behind us. Of course, after -- during COVID, we were all very focused on COVID. We generated massive revenues, significant profitability, and we made collectively a very positive contribution to the societies and the countries where we are operating through our ability to develop new tests. That caused a certain focus on some of our core activities, and we have now since 2, 3, 4 quarters refocus depending on the lab and country, we focus fully on our core business and doing what we have to do.

So we are really looking forward to 2024, where those effects, those extraordinary effects will be behind us, where we will start to see more and more of the impact of all our work in building our network, streamlining and we think we'll be very well positioned to do well in the market, even in a market that might become more difficult because we do have in a very large part of our market, much better competitive positions than our competitors. And we of course strategically and on a macro level and that may be more on a 2- to 5-year level would benefit even more if they were significant economic problem.

So our focus is, as usual, to create significant value over time over 3 to 5 years horizon. That's how we run the company. We run the company for significant value creation over time. And there could be some very significant opportunities over the next 3 to 5 years. And on the organic side, we think every year should get a bit better from -- thanks to all the focus and the effort we've put in making our network more centralized in hub and spoke, more digital, more streamlined, more automated.

So thank you for your support, and I'm looking forward to meeting many of you in person tomorrow in Milan or in North America in California in 3 weeks. Thank you very much.

Ladies and gentlemen, the call has now concluded, and you may disconnect your telephone. Thank you for joining, and have a pleasant day.