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Good morning. My name is Sylvie, and I will be your conference operator today. At this time, I would like to welcome everyone to Cascade Third Quarter 2021 Financial Results Conference Call. [Operator Instructions]I will now pass the call to Jennifer Aitken, Director of Investor Relations for Cascades. Ms. Aitken, you may begin your conference.
Thank you, operator. Good morning, everyone, and thank you for joining our third quarter 2021 conference call. We will begin with an overview of our operational and financial results, followed by some concluding remarks, after which we will begin the question period.The speakers on today's call will be Mario Plourde, President and CEO; and Allan Hogg, CFO. Also joining us for the question-and-answer period at the end of the call are Charles Malo, President and COO of Containerboard Packaging; Luc Langevin, President and COO of Specialty Products; and Jean-David Tardif, President and COO of Tissue Papers.Before I turn the call over to my colleagues, I would like to highlight that certain statements made during this call will discuss historical and forward-looking matters. The accuracy of these statements is subject to risk factors that can have a material impact on actual results. These risks are listed in our public filings. These statements, the investor presentation and the press release also include data that are not measures of performance under IFRS. Please refer to our Q3 2021 investor presentation for details. This presentation, along with our third quarter press release, can be found in the Investors section of our website. If you have any questions, please feel free to call us after the session.I will now turn the call over to our CEO. Mario?
Thank you, Jennifer, and good morning, everyone. Before going into details for each of our businesses, let me begin by saying that we are encouraged by our consolidated performance giving the important inflationary pressure on cost, notably raw material, logistic and energy. We announced the closure of our sale of our investment in the Reno De Medici on October 26. The sale of this asset, 50% dividend increase and our active share buyback underscore our commitment to create value for Cascade and return capital to our shareholders.Moving now to our financial result. On a consolidated basis, third quarter sales increased 2% from last year and 8% from Q2, while adjusted EBITDA decreased by 20% year-over-year and increased by 9% compared to the prior quarter. Slide 4 and 5 provide quarterly information for each of our business segments. On the raw material side, highlighted on Slide 6, the Q2 average index price for OCC increased 179% year-over-year and 15% from Q2. As has been the case throughout the year, this reflect elevated domestic demand driven by strong containerboard industry production levels. Average index price for white recycled paper grade also rose notably in Q3, increasing 23% year-over-year and 30% from Q2.On the virgin pulp side, hardwood and softwood pulp prices both increased year-over-year, but were more stable on a sequential basis. The hardwood pulp index increase of 51% year-over-year and 2% sequentially, while softwood pulp index prices rose 35% from last year level, but decreased by 4% from Q2.Moving now to some brief comments on the result of each of our business segment highlighted on Page 7 through 9 of the presentation. Beginning with the sequential performance, sales in the Containerboard segment increased 2% in Q3. This reflect the rollout of price increases and a beneficial exchange rate partially offset by a less favorable sales mix and lower volume. The latter of these reflect the 2% decrease in shipment and corresponding 2% decrease in our capacity utilization rate. Related to the production impact of the water effluent system issue at our Niagara Fall complex and planned on time at other mill, which remove a total of 21,000 short ton in the quarter.Production has returned to a normalized level. As we mentioned in our Q2 calls, the modernization of our Ontario converting platform involve transferring volume to other facilities. The benefit of these initiative began at the end of Q3 but slightly impact converting shipment in the current quarter as equipment was ramping up. Converting shipment decreased by 3% in millions of square feet, underperforming the 1% increase in the Canadian market and the 2% decrease registered in the U.S. market for the period. Q3 adjusted EBITDA of $94 million or 18.5% on a margin basis was $6 million or 6% below Q2 levels. This reflect higher raw material cost and an approximate $10 million impact stemming from the water effluent system issue just mentioned.These impact were partially offset by the continued rollout price increases and lower operational costs. Year-over-year, sales were stable, reflecting higher selling price, offset by lower volume. Converting shipment decreased by 4.7%. This underperformed both the Canadian and the U.S. market, which were stable year-over-year. Adjusted EBITDA decreased 6% year-over-year, largely reflecting the impact from the issue at our Niagara Fall complex and the ramp-up of the Ontario converting equipment.We are encouraged by the improved sequential performance of our tissue business. Sales were up 7% from Q2 reflecting increase of 8% in shipment levels and 7% in the average selling price. Shipment for both away-from-home and retail converted product grew from the prior quarter, up 12% and 16%, respectively. Adjusted EBITDA increased $11 million sequentially as the benefit of higher volume and pricing and lower fixed costs partially offset the impact of raw materials and production and energy cost inflation. Year-over-year, sales decreased 5%, reflective in negative exchange rate effect and less favorable sales mix. These were partially offset by better volume and pricing benefit realized in certain product category.The adjusted Q3 EBITDA year-over-year shortfall reflect higher raw material prices and low average selling price, driven by mix and exchange rate, which impacted result by 16 and $15 million, respectively. Other input costs also reflected inflationary pressure. While market condition for our tissue business has been exceptionally difficult in recent quarter due mostly to the pandemic, we are encouraged by the more favorable sequential trend in the third quarter. This is in part a reflection of our market positioning as well as our cost and sales optimization effort.Specialty Products segment generated solid Q2 results sequentially. Q3 sales increased 10% from the prior quarter, reflecting a combination of higher volume and more favorable exchange rate and price increases. Adjusted EBITDA decreased $1 million sequentially with benefit from higher volume and price increase, offset by higher subcontracting costs and impact of higher raw material prices in the moulded pulp segment. When compared to the prior year, Q3 sales increased by $27 million or 23% with benefit from better volume and pricing in all segment, more than offsetting the less favorable exchange rate. Adjusted EBITDA level increased by $1 million year-over-year with higher sales and realized spread offsetting higher production costs.I will now pass the call to Allan, who will discuss the main highlights of our financial performance. Allan?
Yes. Thank you, Mario, and good morning, everyone. So let me begin with a reminder that following the sales of our equity position in Reno De Medici, results of the European Boxboard segment have been presented as discontinued as of the second quarter. We provide relevant details regarding the changes to financially consolidated results on Slide 10.As detailed on Slide 11 and 12, year-over-year, Q3 sales increased by $16 million or 2%. As we have already highlighted during this call, this was driven by volume decrease in containerboard in the period with an unfavorable exchange rate also impacting sales levels for all of our business segments. Pricing and sales mix were beneficial factors for our Packaging segment. On a sequential basis, third quarter sales increased by $74 million or 8%, largely reflecting improved pricing and mix in all business segments and higher volumes in tissue. The exchange rate was favorable for all of our business segments.Moving now to operating income and adjusted EBITDA as highlighted on Slide 13. Q3 adjusted EBITDA of $107 million decreased $26 million from the prior year level. The decrease was due to the lower results from the Tissue segment and slightly lower results from containerboard. Sequentially, Q3 adjusted EBITDA increased by $9 million as shown on Slide 14. This was driven by the stronger tissue performance, reflecting volume, sales mix and selling price improvements, offset by slightly softer results in containerboard. Our quarterly results continue to benefit from our margin improvement initiatives as we continue to surpass our objective of improving our EBITDA margin by 1% for the second consecutive year when compared to our baseline year of 2019. On that basis, we have realized approximately $150 million in the first 9 months, and every initiative that we have implemented are mitigating market headwinds and cost inflation.Slide 15 and 16 illustrate the specific items recorded during the quarter. The main items worth mentioning impacting operating income before depreciation are a $39 million gain on disposal of buildings in tissue, a total of $5 million of impairment and restructuring charges and a $5 million unrealized loss on financial instruments. Items impacting these earnings are a $3 million foreign exchange loss on long-term debt and financial instruments, and $20 million gain on business combination in discontinued operation of our Boxboard Europe segment.Slide 17 and 18 illustrate the year-over-year and sequential variance of our Q3 adjusted earnings per share and the reconciliation with the specific items that affected our quarterly results. As reported, earnings per share were $0.32 in the third quarter. This compared to earnings per share of $0.51 last year. Both periods included specific items. On an adjusted basis, earnings per share decreased by $0.51 compared to last year's result.Lower operating results and a $0.32 tax variance impact resulting from an adjustment of tax assets in 2021 and a positive tax adjustment in 2020 were the main drivers of this variance. On an adjusted basis, sequential third quarter earnings per share decreased $0.08 per share from the previous quarter levels, which include an adjustment of tax assets of $0.19.As highlighted on Slide 19, third quarter adjusted cash flow from operations decreased by $17 million year-over-year to $70 million, and adjusted free cash flow levels increased by a $12 million year-over-year. This reflected lower operating results and lower net CapEx incurred in the current period due to the $50 million of sales proceeds of 2 buildings in our Tissue segment.Moving now to our net debt reconciliation as detailed on Slide 20. Our net debt increased by $53 million in Q3, reflecting lower cash flow levels, a negative exchange rate impact and regular CapEx dividend and working capital requirements. We also repurchased 1.6 million shares under our normal course issuer bid for a total amount of $26 million. Our leverage ratio of 3.8x is up from 2.5x at the end of the second quarter, reflecting lower adjusted EBITDA levels.Net debt, as shown, is adjusted to reflect the discontinued operation figures but has not been adjusted to reflect the $450 million of net proceeds from the monetization of our equity position in Reno De Medici that closed on October 26. Taking this into account, leverage would be 2.8x on a pro forma basis.Financial ratios and information about maturities are detailed on Slide 21. Slide 22 provides details about our capital investment plans for 2021. We are now expecting a range of $275 million to $300 million, which includes approximately $155 million of investments associated with our Bear Island conversion project.Capital expenditures totaled $54 million and disposal of assets amounted to $50 million in Q3. Year-to-date, net capital expenditures totaled $140 million, including $75 million for Bear Island. Our total CapEx for the year is significantly lower than expected due to Bear Island. Initially, this project had a budget of USD190 million or CAD250 million. This number has been revised down to USD125 million or approximately CAD155 million. This reduction is mainly due to groundwork and major equipment deliveries that were expected in late Q4 that are now planned in early 2022. Payment term agreements with suppliers also created cash outflow to move to next year. This does not impact the expected start-up date of December 2022.Due to a less favorable exchange rate, increased cost of labor and major inflations in certain commodities like steel and concrete, the total budget of the project has been revised up by USD20 million to USD400 million, representing a 5% increase. The CapEx plan for this project in 2022 now stands at approximately USD190 million, and the remaining cash outflow will be in early 2023.As you saw in our press release yesterday, we repurchased a total of almost $300 million of our 2026 and 2028 unsecured U.S. dollar senior notes. This will improve our financial profile and reduce interest payments going forward by USD16 million per year. We believe that our forecasted free cash flow generation will allocate to both invest for the future, manage our debt profile and also return capital to shareholders. We will continue to invest in current initiative to increase efficiency, productivity and competitive positioning of our businesses across North America.The Bear Island project is our top priority, along with our commercial efforts in tissue to increase volume. We will also continue to support strong demand growth in sustainable specialized packaging while exploring opportunities to further increase our containerboard converting footprint. Capital expenditures for 2022 are yet -- are not yet definitive, but we expect them to be higher than the amount of 2021 that has been lowered due to determine -- timing of certain Bear Island investments.Mario will now conclude the call with some brief comments before we begin the question period. Mario?
Thank you, Allan. We provided details regarding our near-term outlook on Slide 23 of the presentation. As a reminder, this outlook is based on what we are seeing today and may change in the coming month given the nature of the business circumstances. Our near-term outlook for Containerboard segment is for stable sequential result. Demand remain solid on both the manufacturing and converting side, and results will benefit from the return to normalized production of our Niagara Falls complex and the rollout of the announced price increase. These factors are expected to offset higher raw material price and continue upward pressure on production costs.Our Bear Island project is progressing as planned and sales commitment continue to be put in place. We can now confirm that 100% of year 1 production uptake has been contracted, and we have approximately 50% of the total planned capacity committed for multi-year contract. Allan provided you update details about the forecasted cost of the project.Result for the Tissue segment are expected to also remain stable sequentially with the usual seasonal softness offset by encouraging underlying trends as demand level continue to normalize. Input cost inflation will negatively impact performance, but is expected to be partially mitigated by benefit from announced price increase. We also announced an additional price increase of up to 8% for away-from-home product effective January 1 across North America.More broadly, we anticipate that the ongoing economic reopening will benefit demand in away-from-home market and that our targeted sales effort on the retail side will continue to bear fruit. We are slowly restarting production lines that has been temporarily stopped in Q2 in response to the sharp drop in demand and expect this ramp-up to benefit efficiency levels and cost absorption going forward. We will continue to manage labor availability challenge as we ramp up our production. We are expecting slightly improved sequential result from the Specialty Products segment. This reflects stable volume and a higher average selling price offsetting higher raw material and inflationary pressure on production and input costs.Moving now to raw material. Until mid-September, OCC prices were being driven by robust domestic demand level and high export prices. We have seen easing more recently as generation level of this material rose and export became increasingly constrained due to the supply chain interruption seen at ports. We would describe the market for OCC today as being more favorable for buyer and material is readily available.Our inventory are solid, and we are being proactive ahead of the upcoming holiday season. We have seen higher demand for white recycled SOP and high-grade fiber related to gradually increase away-from-home tissue production. When combined with muted fiber generation due to the ongoing limited office building activity, this has led to tighter market condition and higher prices in recent month. We have managed well despite these condition and our mills remain adequately supplied.On the virgin pulp side, market condition for NBSK have continued to ease in the third quarter with better condition and hardwood and eucalyptus grade. Prices for these grade have declined and volume are available. More broadly, we would note that logistical challenge continue to complicate material movement and impact market dynamic overall. That said, our mill continue to be well supported, thanks to our long-term supplier relation and prudent inventory strategy.With that, we will now be happy to answer your questions. Operator?
[Foreign Language] [Operator Instructions] And your first question will be from Hamir Patel at CIBC.
Mario, there were some reports in the Quebec press of the company monetizing an old warehouse in Laval for about $30 million in October. Do you see any other opportunities to rationalize your footprint and maybe capture higher real estate values?
Well, honestly, Hamir, it's something that we always do. We look at our footprint, look at our different buildings. And when we have to consolidate our platform or optimize the -- our footprint, we always look at that. So it's presenting that we are very -- following very closely. Short-term none because we feel that our buildings are integral to our businesses, and often, the remote and isolated business -- buildings. So -- but we are not against selling any businesses that we have to use in the future when we rationalize our footprint. So -- but in the short term, we don't have anything new.
Great. Mario, that's helpful. And Allan, I just wanted to turn to the CapEx envelope for Bear Island. It looks like it was characterized on one of the slides as $400 million now. I believe the last disclosure there was $380 million. So is the increase reflect -- is it just general cost inflation? Or have you added additional equipment to the project?
No, it's mainly cost inflation-driven, but I might just ask Charles to give you more color on this.
Hamir, so what we've done is we reviewed with the current cost inflation like steel, concrete increase, also cost of labor. These are the main components of the increases. So we went line-by-line to evaluate to the best of our knowledge where we would end up.
Great. And Charles, I'm wondering if you could comment on what you're seeing in containerboard markets in Q4 so far?
So the demand is still good, both on the converting side. So we are cautiously optimistic, but I can say that -- like that. So the volume, the demand is still solid compared to last year, where we had our strongest shipping quarter ever. It's probably going to be a bit more normalized, but still very good for this time of the year.
Your next question will be from Sean Steuart at TD Securities.
Just following up on Hamir's question on the CapEx budget for this year. The revision for this year, I know there's some deferral for Bear Island. Is the $50 million in proceeds from the converting asset sales this past quarter, is the new CapEx guidance net of that $50 million? Or is it before those proceeds?
No, yes, it is net.
Okay. And for Charles potentially, the -- just trying to understand, there's cost inflation for Bear Island, some spending has been pushed back because of delays, and we're seeing that across the sector. Explain the confidence you have on the start-up time frame being intact for that asset? And can you remind us of how we should think about the ramp-up once that asset does start up?
Okay. So just I'm going to start with the delays. So on the CapEx, the main -- or the main components of the change and the output for the CapEx are mainly due to deliveries of major components of the paper machine and also the major components in the project that will come in early in Q1 2022.We do have the luxury in Bear Island that we're not building new building because it's already existing. So our team right now have been able to adapt the schedule with the reception of the equipment, installation and all of this. We also had with the original schedule built in some contingencies. So where -- we feel comfortable that our December 14 date is still achievable with the changes that we made to the schedule. So yes, we are comfortable with that date. Knowing -- or about the volume, the ramping up, if that's what your question on when it started. So 2023, the output of the mill would be about 280,000 tons.
Okay. Second question on tissue, you touched on the away-from-home price hike for Q4. Can you review the other increases that were initiated through the second half of the year? How much of those increased efforts were reflected in Q3 price realizations? And how should we think about the progression for price realizations in the fourth quarter and into early next year?
Sean, there was limited difference between Q3 and Q4 in regards of the retail price increase that we got last summer. So pretty much all materialized in Q3. But it's more about the mix. So we're selling less jumbo rolls than we used to. So Q2 -- Q3, we see the integration rates going up as volume is ramping up a bit. And there's also other effort to customer to improve sales mix portfolio for the segment. So it's pretty much the same Q3 versus Q4.
Your next question will be from Mark Wilde at BMO.
Allan, I wanted just to start-up at that flat guidance for packaging, for containerboard in the fourth quarter, does that incorporate not having the issue with Niagara Falls?
Well, it's expected -- yes, it's expected that Niagara Falls will be back up and running, as we mentioned. But the major impact is the full effect of raw material increases that happened in August and September. So that will be fully reflected in Q4. And so with that -- and also maybe now with that recent $10, we might see a slight positive contribution, but the major impact offsetting the Greenpac effect in Q3 is the raw materials.
Okay. All right. And can you just talk about how energy is affecting both containerboard and tissue purchase energy?
Yes. Well, yes, energy is obviously increasing. And now that we are entering winter season, it will -- it's factored in, in our Q4 forecast.
Okay. All right. And then the corporate costs in the third quarter were a little lower than we were modeling. Can you give us a little color on that and also the expectations for the fourth quarter and beyond?
Yes. In corporate, there's also the -- our recovery business that is included in there. So the recovery business is contributing favorably compared to previous quarters. So that's an impact when you see the corporate segment and general costs and that is impacted in there is also tentative variation, but the main impact is recovery operations.
Okay. All right. And then you bought back a lot of stock in the quarter. I would just like to get your thoughts on incremental capital returns in the wake of the Reno sale.
Well, as we said when we announced the sale of Reno, we said that we would look at managing our debt profile. That's what we did this week. So in Canadian dollar, it's close to CAD400 million on the CAD450 million that we used on that repurchase of notes. We increased previously in Q2, our dividend. And now with the share buyback, that was exactly what we said when we announced the sale of Reno. So that's what we did.
Okay. All right. And can we get some sense of kind of what the volume trends are looking like right now on a year-over-year basis in the away-from-home market?
It's progressing slowly like it's a few percent every month. It's kind of stabilizing October versus September. So -- and it's softer at the end of the year, so that's why we're guiding pretty much flat. But we hope that with the broader reopening and there's more and more people traveling that we're still seeing that market positively low in the coming months.
Where would you put kind of the current volume right now relative to kind of what you think about as kind of baseline demand in away-from-home?
When we look at the AF&PA number, the market is still below the 2019 results. So it's really tough to see what would be the new reality. Honestly, your crystal ball is as good as mine, but we hope that it's going to become closer to 2019, probably end of next year. My guess, it's still going to take at least another year before it goes back to 2019 results, I think. That's my whole opinion.
Yes. And finally for me, any kind of thoughts on further kind of consolidation and restructuring in the tissue market? A week or 2 ago, one of your competitors in the consumer market made some fairly bearish comments on an earnings call. I'd just like to get your thoughts.
Well, obviously, I think it would be beneficial if there were more consolidations. At this point, we're not focused on that at all. We are more focused on ramping up all the new lines that we installed and the integration of Orchid. For us right now, the plate is quite full with all this focus on filling up this capacity that we acquired mostly in the beginning of the pandemic. And the pandemic is still hitting us hard. It's difficult to see where the market is going right now. So like I said, we're really more focused on capacity, filling up the capacity we have right now, but.
Okay. All right. That's fine. That's helpful. So one more in here. I just -- in the specialty packaging business, in that moulded pulp business, we're hearing about sort of the egg producers moving away from kind of thermoform plastics and perhaps moving back to moulded pulp. Can you talk about what you're seeing?
Yes. Mark, this is Luc Langevin. We see the exact same thing. And this conversion from polystyrene carton or -- has already started 4 years ago. The first move was going to PET. And obviously, we see more and more pressure on the moulded pulp. The thing is we need to get the capacity in place. You don't put capacity on moulded pulp as quickly as you would put it in plastic. It's longer projects to put the capacity in place, but we definitely see positive future in terms of the moulded pulp in the egg industry.
Your next question will be from Paul Quinn at RBC.
Solid results. Maybe just starting on recovered paper prices. One of your U.S. containerboard peers this morning was giving guidance going out, financial guidance. And their assumption on OCC over about -- over $160 for the following 4 quarters. Is that consistent with what you're seeing in the marketplace? And could you also give a guide on where you think SOP prices will be?
Okay. Paul, this is Luc Langevin again. For the OCC, at this moment, we see -- obviously, we are in higher generation season. And the material is readily available. Based on the observation we have on the market now, the trend we've seen in October in price reduction could potentially continue in November. This -- people -- inventories are high. People are well -- in a good position for the Thanksgiving and the holiday season in terms of inventory levels. So -- and we should not forget also that export is the currently limited shortage of containers and the port congestion.And we do expect something also is that the energy shortage in China has slowed down the paper mills as you're aware in China, and we'll have a collateral on the pulp -- virgin pulp but also the recycled pulp coming from other Asian countries. So I would say short-term, I would say, should be a more favorable confidence for the OCC. On the SOP, this is actually a different story.The market is a bit tighter now, very much connected to the away-from-home market, which -- on the tissue business, which is a significant consumer of SOP. So it really depends how quickly the away-from-home market will recover. But for us, it's not a challenge of supply. We do have -- but we don't expect that it's going to become a favorable market for buyers over the next 2 weeks, 2 months.
Great. That's helpful. And then just over on Bear Island. I appreciate the guidance of 2023 production at 280,000 tons. If you could hold conditions flat, what you're seeing right now out into 2023, given the start-up costs, do you think that's going to be a contributor to finances in that year?
Charles, do you want to take it or?
You mean -- just, Paul -- yes, Allan, I will take it. So is your question that the first year, the mill will be a positive contributor. Is that what you're asking?
Exactly. Yes. I know it's an easy one.
So based on our model and like you mentioned with current conditions -- and yes, we have in our model that it's going to be positively contributing.
Paul, maybe we can just rely on what happened in Greenpac. Greenpac was also positively contributing quite rapidly. And we learned from that, obviously. So expect to be good.
Yes. Right. Just figure that OCC prices are a lot higher than when Greenpac started up. That's all.
[Operator Instructions] And your next question will be from Zachary Evershed at National Bank Financial.
On the topic of containerboard converting capacity, could you give us a little more color on the nature and scale of the opportunities that interest you?
I'm going to take that one, Allan.
Yes. Sure. Go ahead.
So we do have our eyes open on opportunities, but we are very selective. You know that the last investment that we made like in Piscataway, which is very beneficial for our converting facility. So yes, we're looking at opportunities. And -- but we're also looking at investing in our current portfolio. So we spoke about the project that we have in Ontario where we made a major investment that have increase our capacity and also reduce our number of asset but better performing.So when we're looking at the future, there's going to be 3 things: first, investing in our current facility, the second is looking at the good assets, but we're also looking at where we could do another greenfield. So these are the 3 places where we are focusing on. And I just want to mention, again, that on the acquisition, we want to be selective on the quality of the asset because we want to invest in long term.
That's helpful. Another for you, how is hiring going for Bear Island? How are you approaching that in the current tight market?
Yes. So very good question, knowing that the market is very challenging right now, the hiring is going very well. We have about 25 employees right now and 160 that are helping us during the construction. And we figure that we're going to be able to attract a lot of the employees that were working on that site before that we kept contact with. They haven't moved from the area. So for them, it's a big advantage for coming back to a more modern facility. So we're really confident that with what we're doing right now, the scale also, we are starting to rehire as we speak, progressively until Q3 next year. So we're very positive on being able to find good people to run that facility.
That's great color. Just one more for me on tissue. As workers return to the office and travel picks up, demand for away-from-home tissue obviously will increase. And that's slightly ahead of the recovery in SOP generation. So do you see risk of maybe a pinch in SOP demand versus supply at that point in time?
Yes, this is Luc again. Yes. We -- as I said, there is going to be likely a higher demand for SOP. And -- but obviously, there will be the alternative of our virgin pulp as a substitute in some mills. So that's going to be likely the answer for the pinch of -- between the demand and the generation of SOP over the next few months.
There are no further questions at this time. Mr. Plourde, please proceed.
Thank you, everyone, for being on the call and looking forward to meet you on the next quarter. So have a good day, everyone. Thank you.
Thank you. [Foreign Language] Mr. Plourde. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. And at this time, we do ask that you please disconnect your lines.