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Ladies and gentlemen, welcome to the SPIE 9 Months 2018 Results Conference Call. I now hand over to Mr. Gauthier Louette, Chairman and CEO; and Mr. Denis Chêne, Group CFO. Gentlemen, please go ahead.
Good morning, ladies and gentlemen, and thank you for attending SPIE's first 9 months of 2018 conference call. Starting with the first 9 months 2018 highlights. So we delivered a solid year-to-date performance and we are on track with full year targets. We had double-digit revenue growth at 11.5% excluding FX and a strong organic growth at 2.4%. Our group EBITA margin slightly increased compared to H1 2017 pro forma at 5.3%, and this is as anticipated. And regarding bolt-on M&A, we're at EUR 91 million full year revenue acquired so far. So we do confirm our full year outlook. And looking at our organic growth, we had a strong year-on-year organic growth improvement. Looking at France, we are 0.9% for the first 9 months of the year, but we should not draw conclusions from the soft Q3. We just got the figures for the organic growth of France end of October, and it stands at 2%. Regarding Germany & Central Europe, we have a healthy front half growth year-to-date, and Germany for the quarter stood at 1.6%. Also for Europe, good growth here. And looking at Oil & Gas and Nuclear, while we're pleased with the development for all the segments, and especially for Oil & Gas, where we're really pleased to be able to report coming back to growth in the third quarter of the year. So for the whole group, organic growth, 2.4% and Q3 plus 0.5%. But again, look at the organic growth at France end of October, plus 2%. Looking at M&A, we completed 4 acquisitions today for about EUR 91 million full year revenue. We have a healthy pipeline, and we're still looking at current EUR 200 million annual revenue. This is subject to signing in Q4 of 2 acquisitions, which are currently in advanced discussion stage, each of them being in the range of EUR 50 million turnover. As you see, our acquisition policy remains steady, with expanding service offering, increasing the footprint density, and we see a focus on ICT, which is an area where we continue growing. I will now hand over the floor to Denis and to -- for the financial results.
Thank you, Gauthier, and good morning, everyone. To start, I would like to comment on SPIE's top line for the first 9 months of the year, as seen on Slide 8. As you can see, we posted strong year-on-year revenue growth at 11%, and this was achieved on the back of robust organic growth, 2.4%; and sizable growth from acquisitions at 9.3%. Overall, excluding ForEx, we had a strong 11.5% year-on-year total growth. Looking now at the -- our group's EBITA margin on Slide 9. Consistent with our full year expectations, our margin performance for the period was 10 bps higher than pro forma 2017. For the first 9 months of the year, EBITA margin was 5.3%, which confirms -- compares with the pro forma level for the same period last year of 5.2%. This is thanks to: one, good operational performance in France, that full year set the CICE decrease, as expected; and two, strong progress achieved in Germany & Central Europe, and this despite a slight contraction in North-Western Europe. Turning now to Slide 10. We are highlighting here the contribution of Q3 to a strong revenue growth and to the gradual buildup of our EBITA margin throughout the year. In Q3, we confirmed the robustness of our performance with revenue at 3.8%; EBITA at 5.2%; and EBITA margin, which rose to 6.1%, up 10 bps versus pro forma 2017. In light of this solid performance in the first 9 months, we are fully on track to achieve our full year guidance. Thank you, and I would now hand back to Gauthier for the business review.
Thank you, Denis. So just first, a few mentions of our activities, so we have developed a project in Germany with our consumer, 50Hertz. And as you know, we are the leader on the high-voltage transmission line market in Germany. This is a new type of project, and the fact that 50Hertz choose to work with us is a testimony to our expertise and proximity to our customers. This new line called compactLine has obvious advantages in terms of acceptance by the -- for the environment and the population, and it is a project from which we expect good prospects in the future. Another example of the expertise of SPIE SAG is another which has been developed for distribution, and we have a team which has a leading innovation capacity in this field. So this solution, it is designed to enable the grid to become smart with a reconfiguration. A lot of the sensors and actual tools are installed on the substations. It's clearly -- and there we are with all our gear for customers are planning to invest in the future. And finally, we discussed last time the prospects about e-mobility. So we chose today to more broadly give you an idea about what Smart City means to us. And as you see, we're very active in the area of improving the urban mobility with the traffic management, with the smart parking, with the passenger information system. And you'll see in the safe way because the video surveillance is becoming an important area in all the urban areas. And so you see that we have various solutions, which we're able to implement. And again, the development of Internet of Things and big data is a boost to the startup solutions. Just 2 words about our resources. As you know, our resources are becoming scarce in our industry today. It's very important that we're able to develop and retain them with a good success rate. And so last year, we did increase significantly and by 56% the number of trainees we have in Germany, and we're really working on the talent attraction and on the training of our people. So it's an area where SPIE is very active at seminars, and then you see, the new workforce is a key element to us. So looking at our segments. Looking at France, from France, we do continue to see a favorable market environment. We do continue to take a disciplined view on reduction of our activity in commercial installation and generally on margin expectation. But to give you an idea, if we were to exclude commercial installation, our organic growth would be at plus 3% year-to-date. So really, we are very disciplined in this area, and as seen, it is very profitable in terms of margin level and cash generation. So as we said, Q2 was a bit soft for a number of reasons, which has to do with also some from contract phasing and quite a soft month of August. But end of October, we are back to plus 2% organic growth, and it's also a sign that things can vary a couple of millions from 1 quarter to the other. As you know, organic growth per quarter is not our top focus and is not our most relevant KPI. We had a good contribution year-to-date from acquisitions at 4.2% and we're particularly pleased with the development of the S-Cube, which is our latest ICT services acquisition in the area of the management of core systems in data centers. Looking at Germany & Central Europe. As we highlighted before, Germany continues to deliver steady performance, and the full year outlook remains strong. Our revenue trends are in line with expectations in Central Europe and in Switzerland. But of course, we mentioned that due to the size of the businesses in Central Europe, we do see a high quarterly growth volatility. And then, the SAG Gas & Offshore disposal, once this process is ongoing, and we are currently in active discussions with a number of potential buyers. Looking at North-Western Europe. We have a good momentum in the Netherlands, where the robust growth in infrastructure and industry services, which is a component-based strong contribution from 2017 bolt-on acquisitions. And regarding Ziut, the acquisition in public lighting. So the turnaround is in progress. The work on the cost base is completed now and we are still working on the improvement of pricing and negotiations of contracts with our customers. In U.K., we have a business that is now focused on the solid customer base and it is proving to be resilient. For Belgium, good organic growth around -- across all sectors of activity, except, as we mentioned before, in the nuclear front. And we are well underway with the integration of Systemat and identifying the commercial synergies and getting a good support from the ICT organization in France as well to help them come up with new offerings. And finally, Oil & Gas and Nuclear. So for the first 9 months of the year, we do finally see a resumption of growth in Oil & Gas. And we were pleased to report our first quarter of organic growth in Oil & Gas with a significantly improved level of activity in West Africa and a sustained level of activity for the downstream sector in the Middle East. We do have a positive outlook for the balance of the year with the award of several new maintenance contracts in West Africa. At the beginning of the year, I announced a range for the year of minus 10% to 0%, and I'm now pleased to be able to confirm that we will be much closer to 0% for Oil & Gas full year, which means a healthy positive growth in H2. And as you have seen at Q3, we had a growth at 4.5% in Oil & Gas. So that's really a pleasing turn of the wheel so far in Oil & Gas business. We should not forget to mention our Nuclear activity, which enjoyed the healthy 5% organic growth in Q3. We had a lower-than-expected slowdown in our EPR contract in Flamanville. We see a strong Grand Carénage activity. And as I repeated many times, the underlying market remains very solid with now a number of positive decisions coming also from the French government and supporting the prospect going forward. So really, a positive development in our Oil & Gas and Nuclear segments. So we do confirm our 2018 outlook: the revenue growth will be in excess of 7% at constant FX; EBITA margin at 6% or more; a 100% cash conversion and a year-end leverage ratio at 3.1x; and you see the dividend policy unchanged. 2018 outlook confirmed. And before we turn to Q&A, I wanted to address questions that we have recently received on the cyclical nature of our business. So no, I think a shortened story for our business is not very cyclical and you can see our positive growth of -- continued growth in revenue and EBITA across the revenue cycle, which you will recognize on the chart. As we said, the business is supported by diversified customer base, diversified end markets and exposure to strong long-term growth drivers. So thank you very much, and we are now available, Denis, and myself, to answer your questions.
[Operator Instructions] Your first question comes from Charles-Louis Scotti from Kepler Cheuvreux.
A couple of questions from my side. The first one on the French market. Can you tell us which sectors were a little bit softer in France in Q3? And do you also expect pricing pressure in the commercialization business to ease at some point in the coming year? The second question is on the synergies with SAG. You're on track to deliver your EUR 20 million of cost synergies. Can you give us an idea of the [ the part ] onshore revenue synergy as well? Because I just think that your strong organic growth in Germany was also driven by sales synergies. My third question on the Oil & Gas business. Do you expect to just keep the level of the organic growth in coming years in your -- in the Oil & Gas business after a year of cost savings from all majors? And how should we look at the profitability of the Oil & Gas business? Do you expect to return to a level of 10% as was stated in the past? On M&A as well, you said there are 2 deals in the pipe today. Just can you tell us, it's what, EUR 50 million, 5-0 million euro each or together from the 2 bolt-on collection? And lastly, the SAG Gas & Offshore business, can we expect a closing of the sale of the business by year-end? Or is it more H1 2019 that it will be?
So thank you for these questions. So regarding the French market, really we -- so generally, the whole market is supportive. And in terms of volume, we wouldn't cause a commercialization sector a subsector. There's quite a good level of tendering and enough just coming onto market and contracts coming onto the market for the commercial sector. This is more our self-discipline because the price level of this activity remains very low, and we do see a number of players who are extremely aggressive on this market for no reason because really when you see the amount of work available and the pressure on our resources, there's no reason to sell cheap this sort of strategy. But that's what happens, and so we are proactively reducing our level of activity in this sector and really keeping to our margin discipline in terms of margin expectation. So all together, generally, the French market is very supportive at the moment. And just let me -- what is specifically strong is industry and telecom. Now we really enjoy a strong level of activity in the industry, where we have good positions and with a very good customer base and a very high level of activity in the telecom sector including FTTH, fiber to the home, at the moment. So regarding the commercialization price pressure, no, I'm not making any forecast, but I don't have too many hopes of price pressure abating significantly. Regarding SAG, the first synergy, obviously, takes a bit more time to develop. But we have a few improvements I know in some areas, where we do take in some business and the power supply to the building, also redundancy power supply, sometimes we desupplementize them. And as you see now, we tend to give the business to SAG. But a very good example is that we mentioned last time about e-mobility, and this is a contract we had at the Pan-European level. It would have been very difficult to get this contract in Germany without the SAG presence and relationship with the DSOs. And on the other hand, SAG didn't have the whole competence to offer a solution complete from an end customer to a DS operator. So that's a good example of synergies we are trying to further foster at the moment. It will be difficult to quantify them right now. DS profitability, we probably see we have reduced the margins in the past. But we think that now that we are bottoming out also not only for volume, but also for margin, customers remain very demanding on that and disciplined on price. But we are no longer in the expectations from the customers that our price will continue reducing. And we see with the volume improving, it will also help cover our overhead. So I tend to hope for margin improvement in the future. It will take still a bit of time to come back to the 10%. Regarding M&A, as I mentioned, we are looking -- I mentioned, 2 deals we are looking at the moment which are about EUR 50 million turnover each. Each one of them is EUR 50 million. But again, now depending on timing of negotiation, in both case, we are on an exclusive basis, but no -- timing of negotiations can be sometime a bit cumbersome. And we want also to take the time, and it's better to have a good negotiation both to Iran, to Russia and to India. So that's why there's some uncertainty about timing right now. And similarly, for Gas & Offshore, we are resuming discussion with a number of interested party. We are looking at different possible options right now. Again, difficult to comment further and also difficult to comment more on timing.
The next question comes from Simona Sarli from Bank of America Merrill Lynch.
I have a couple of them, please. So firstly is on Germany & Central Europe. How much of the slowdown in organic growth that you experienced in Q3 was due to the contract phasing in Technical Facility Management and Building Technology? And also when you said that you expect a solid outlook for Q4, is there a chance that you can quantify that roughly? The second one is related to Nuclear, if you could please provide more color on the Grand Carénage expected expanding in 2019 or given the news flow on -- from media recently. And what is the read across for your Nuclear division? And then the third question is related to cash flow generation and working capital. So you reconfirmed your guidance for leverage and cash conversion. Could you maybe provide a little bit more color on the specific working capital dynamics also in comparison to Q3 of last years, maybe also in terms of days of sales, if possible?
Thank you. So regarding Germany & Central Europe, the contract phasing is mainly linked to Building Technology and automation. We're depending on the comparable with where's the project, where it's taking place, when's the project, what's taking place the year before and when they were completed and when the new ones are starting. We do see a couple of millions of variation from one year to the other and from one quarter to the other. So again, when we look at the quarterly turnover in Germany, we're talking roughly EUR 250 million. So obviously, a few millions variation impact to the quarterly organic growth, but there's not too big a meaning to that. And especially in the building services project we have this type of operations. Altogether, we have a solid outlook for Q4 and we mentioned at Investors Day last year that we are expecting organic growth in Germany between 2% and 3%, and on a yearly basis, we've clearly seen that this year will be at the bottom of this range for the whole of Germany or even maybe slightly above the 3%. So that's what we are looking at, at the moment. And I don't have the figures for October yet. I have pretty narrow indication, which tend to support this observation. Regarding -- and again, the German market is very supportive, and especially in City Networks, we are -- which is the main part, is 75% of our SAG acquisition, and we have a very supportive market at the moment. Regarding Nuclear, obviously, we do not have yet our plan for 2019. But as you mentioned, clearly, the various estimation by the government show a good level of activity on Grand Carénage generally to come forward, and so we would benefit from that. As we said from one year to the other, it can vary depending on the what -- which nuclear plants are affected by the Grand Carénage. And so we do not have a complete view yet on the impact for 2019 for us. But it's certainly the latest decisions and the trends indicated by the government are supportive of this activity going forward. And regarding your question to cash flow, I will hand over to Denis.
Yes. Simona, so regarding cash flow, I can tell you that we are clearly on track to achieve our 100% cash conversion of EBITA, which, as you know, is really the backbone and the guarantee of our 3.1x leverage at the end of the year. As of today, the dynamics of working capital are very good and we are fully in line with our yearly seasonal pattern, which is, as you know, a very strong resource of working capital during the second half of the year. We monitor it very closely. And as we've done today, it is going exactly as expected. And if you want to compare with the previous year, it is doing better than last year probably. Also other items, I mean items below working capital and operating cash flow, which are a component of year-end debt net and leverage, I can report that our view is totally unchanged from what we shared at H1 regarding, notably, a restructuring discontinuation and disposals and Gas & Offshore. So all this put us in a very confident position for the year-end target of 3.1x.
Could I please just ask a clarification on Germany & Central Europe? Am I correct, if you are reconfirming your guidance of an organic growth for the division in 2018 of slightly more than 3%, we are talking about a further deceleration in Q4 of the organic growth. So almost flat essentially?
Yes. And we see the comps -- and especially for SAG, the comps are becoming higher and this was anticipated from the start of the year. And we mentioned that we had a strong start but that it would moderate over the year. So it is exactly what we expected, which is materializing now. And again, we're looking at an organic growth in Germany above 3%.
And sorry, because I didn't fully catch it before, when you said the phasing of the contracts are moving from one quarter to the other, it was just a couple of million of revenues, right?
Yes. Yes. I mean yes, it's mainly with BT&A, and yes, it's a couple of millions.
Paul Checketts [Operator Instructions].
I've got 3 questions, please. Can I ask first, just returning to the Oil & Gas business. Gauthier, you have previously also given expectations for the margin reduction in the year. Would you be able to update us on your -- the latest thoughts? And if you think about the newer work that you signed in, in Africa, what sort of margins would you expect to make on that? The second question is about the SAG Gas & Offshore business. So what do you think the timing's likely to be in terms of the disposal? And like, what do you think the cash costs are likely to be to SPIE in the second half? It's obviously a little behind in the first half. And then the last one, if I can just return to this bigger question that's being asked around organic growth in France and Germany. If looking into '19 now, as we're nearly there, it looks like the markets got for those markets maybe 2% and 3% organic growth, respectively. I'm sure you don't really want to lay out guidance for that year yet. But are those sort of numbers, will they make you uncomfortable? Could you give us a sense of that sort of -- the visibility you do have and your expectation as we go into next year?
So coming to Oil & Gas, as I said, we think our margins are bottoming out, and as a result, we are winning now at -- not a dissimilar level of margin and again, with a more reasonable type of conversation with our customers, who are also aware of the mission-critical nature of our services, and so at some stage, we have a reasonable conversation. However, oil and gas companies have become very, very disciplined. So they're not in the mood for asking a further 10% discount every 6 months, as they did over the last years. But they're not -- they're remaining very disciplined. So I'm confident about the margin level or slight improvement near term, but no more than that. And regarding the disposal of Gas & Offshore, though I cannot really add much to what I said and because you see these negotiations are taking place and we don't want to disclose too much now. Regarding cash, we are -- for the year, we are in line with what we had mentioned so far. So no change from the figures regarding the cash, which is a cash outflow for the government decision for this year. And we see too early to comment on the disposal itself in terms of cash impact. And for 2019, yes, for you, it's a bit early. As you know, our budget exercise is a bottom-up exercise. It's something which is done very thoroughly at branch level, regional level, country level and then consolidated at SPIE level. Every project manager, these guys are dealing with EUR 2 million, EUR 3 million. They give us the plan for next year, and so it's a bottom-up exercise which we are doing now in the context of supportive markets, but we need really to mention that the preferred organic growth will be changing next year.
The next question comes from [ Nicholas DuFour ] from [ McCann ].
I had a couple of questions. First, I wanted to have your view on the Smart City market growth. What is your position in that market? Do expect to outpace the market? You said it's growing fast, but why do you think you are, yourself, in that range of growth? Second question is, what level of organic growth do you expect in France now with the latest development in your selectivity of contract? What is your new target for the full year in France? And then third question, could you elaborate on the Q3 growth in Central Europe excluding Germany? And you said that the organic growth is quite volatile quarter to quarter. Could you explain why and what can we expect for the future?
Okay. So regarding Smart City volume, it's a very active sector, but you see, again, it's including what we do in communications and which is part of the Smart City, where we have a higher organic growth in this sector at the moment. And clearly, this is going to last for a while. And as an example, we have a strong program of telecom and optic fiber in France at the moment, but there's also a strong program resuming in the Netherlands in the future. And Germany is only starting. So we tend to explain that Smart City will continue to support our activities going forward. French organic growth whole year, but as we said, with our first 2, end of October. So it supports our view that we should be around 1.5 for the whole year, as we mentioned in the past. And again, I will remind you that 0.5% is EUR 10 million revenue on the EUR 2.4 million, EUR 2.5 million business. And so it's not so easy to forecast at that so closely right now. But that's what we have in mind give or take. And in Central Europe, we have businesses in the -- largest business is in Poland, and then we have the Czech Republic and the Slovak Republic and Hungary. And regarding Poland and the Slovak Republic, where we're doing high-voltage transmission lines, these projects can -- there's always an element of uncertainty about timing. Do we get the planning permission? Do we get the weather right? And can you start working on when it was anticipated, et cetera? And you see the size of the business is fairly small, the impact of 1 or 2 project being delayed or starting earlier than planned, which is rarely the case, but it's more often than not it is delayed, well, it has an impact on the organic growth, which is significant sometimes taking 10%, even 15% variations from one quarter to the other. So that's why I mentioned this higher volatility in this part of our business.
The next question come from Jim Winckler from Jefferies.
Just a quick one first. Just curious if the 3%-plus that you referenced for Germany, is that for the division Germany & Central Europe? Or within that, just Germany? And then secondly, just wondering, you commented that you had modest year-to-date growth in -- organic growth in the U.K. Wondering if you could provide any comments in terms of how your profitability or margins are progressing in that area as well.
So for the figure I mentioned, that's actually above 3% growth for Germany in terms of organic growth full year. That's what we're looking at for Germany. And for the margins in the U.K., well, you see nothing to write home about. We're looking at something in the range of 2% this year, and it's tight. But the thing is we focus and we have done a lot of work on the overhead reduction, on the customer relationship, on trying to focus on more effective areas of the business and building on our strength in technical expertise, so we have quite a good portfolio for the year and which will also give us a good entry point for next year. So at the moment, we have a modest organic growth. But again, it can vary from one quarter to the other. And we're looking at -- for the year, some modest organic growth. But we do see in the U.K. even more than everywhere else in the business, the focus is on margin and cash generation.
We don't have any further questions. [Operator Instructions] We have a new question comes from Sylvia Barker from JPMorgan.
I had a couple of questions on Nuclear and Oil & Gas and just one on restructuring, please. On Nuclear, it sounds like the 5% was probably a little better than you hoped in Q3 due to better-than-expected contract phasing. Do you think that might impact slightly negatively in Q4? And then on Oil & Gas, could you just tell us a little bit more about the timing of the West Africa projects? And then on restructuring, obviously, that's going to be ramping up Q1, Q2, Q3. Could you just talk a little bit about how much of that is restructuring within the business? And then the integration of the acquisition, just remind us how much you expect for Q4?
So regarding our Nuclear, as we said -- I'm not saying that the plus 5% of Q3 will be the same in Q4. Again, there's some amount of phasing and comparable with the previous year, et cetera, and with, by the way, a limited amount of conclusions you can draw from that. But all together, we're looking at a business which should be stable or slight organic growth for the year in the Nuclear area. Again, it can vary a bit. Let us remind you that it's globally a very stable business, with a very good level of margin and an excellent cash generation based on outstanding working capital management. Regarding restructuring, as you will recall, we have guided a total budget for the year at EUR 40 million. So this is confirmed. EUR 17 million were cashed out during the first half. And I confirm that the balance of EUR 23 million is impacting the second half and included in our, obviously, leverage forecast. This has to do, you will remember, mostly with, firstly, the integration of SAG; and secondly, to the organization as a new structure in France with a small balance in the other EUR 3 million regarding the work done at Ziut in the Netherlands. So the plan is totally within budget and the timing likewise. So you can bank on a EUR 23 million cash outflow for the second half regarding those projects.
That's very clear. And just one clarification on France. So the 2% positive growth, that's at the end of October is a run rate, but October overall was positive or still slightly negative?
No. No. If we would have a positive organic growth in October, obviously, to move up from 0.9% year-to-date in September to plus 2% year-to-date October, you need a positive organic growth in October with the figure [indiscernible].
The next question comes from Christophe Chaput from ODDO.
Just 2 quick ones for me. So you give us the guidance on the acquisition for the full year 2018. But could we have, let's say, your comment on the pipeline for 2019 and further? I mean is it going to be more or less in the same magnitude than 2018, which means EUR 200 million? Or are you going to come back on the acquisition of EUR 300 million roughly by the end of the year? And just to be sure, for 2018, the 2 targets you like to sign, could we expect them to have the same profitability as the group in range or, let's say, the region where you are going to make those acquisitions? Or could it be dilutive, let's say, on the profitability?
So, no. No. It would not be dilutive on the profitability -- in profitability for the first half. And regarding the run rate, as we said, this year, for a number of reasons including the fact that we had quite a bit of work in Germany as the team was focused on the SAG integration. And also, we have mentioned that it would be a bit back-end loaded in terms of M&A activity this year. As you might have seen that we just added a small acquisition a few days ago in this area of high voltage, a very specialized company for a high-voltage specialist. And so this year back-end loaded, as we said. And run rate, well, we're looking at EUR 200 million or a bit more when we are in a normal position. We have a good pipeline, and clearly, we would be able to try and -- depending on the years to do more than EUR 200 million, but it can vary from one year to the other. And we have really big pipeline and looking at very interesting things in our main geographies at the moment.
And during the Investor Day in Germany, if I may, you mentioned a lot of target, let's say, in this area, Germany. I assume that it's the bulk part of the future acquisition?
As we mentioned, and we're comparing our France and German business, if we were to be the same size in proportion to the GDP, I would need nearly to double our German business, you see. So that would be an area of our focus in terms of bolt-on for the future, and this is really our strategy going forward.
And the price remain, let's say, under control, of the acquisition, I mean?
It's not under control. We do not purchase. We have everything paid for that and that's [indiscernible]
We don't have any further questions.
So in that case, we will conclude this conference call now. Thank you for attending, and thank you for your interest in SPIE. And you can rest assured that everyone in the company is working hard to achieve the full year numbers. I think we are in a very decent shape, with the U.K. under control and Oil & Gas significantly improving and our 2 main engines in Continental Europe very solid. So we are looking confidently at 2018 and beyond. Thanks a lot.
Ladies and gentlemen, this concludes today's conference call. Thank you all for your participation. You may now disconnect.