Leoni AG

XETRA:LEO

Earnings Call Transcript

[Operator]

Ladies and gentlemen, thank you for standing by. Welcome, and thank you for joining the analyst and investor conference call. [Operator Instructions] I would now like to turn the conference over to Aldo Kamper. Please go ahead.

[Aldo Kamper, President, CEO & Chairman of the Board]

Thank you, and good morning, ladies and gentlemen. Thank you for joining us today for our presentation of our results of the first quarter of 2021. Before I turn over to Ingrid, who will run you, as usual, through our financials, let me touch on a few highlights of the quarter on Slide 2. As already prereleased at the beginning of May, we had a strong start into 2021. This was mainly driven by a continuation of our volume recovery in combination with our improved cost base as a result of our efforts over the last 2 years. Our group sales, free cash flow and EBIT before exceptional items and VALUE 21 costs, were all significantly above market expectations. Year-on-year, Q1 group sales increased by nearly 20% to almost EUR 1.4 billion, mainly as a result of our organic growth of more than 18%. However, at this point, it's worth noting that we already had experienced the first negative sales impacts from the pandemic in late February and March of 2020, which has put this quarter's organic growth into perspective. The strong sales recovery led to a significant improvement in our operating income. EBIT before exceptional items and VALUE 21 costs came to EUR 39 million compared to the negative EUR 17 million that we achieved in the first quarter of 2020. WCS had a very strong quarter. Also, WSD once again, made good progress. Like in Q4 2020, the division continues to show positive results after several quarters of losses. Beyond this, we have made important progress for the targeted improvement of our portfolio. In the first quarter, we closed the sale of our WCS unit, LEONI Schweiz, and reached an agreement on the sale of the data communication and compound business of LEONI Kerpen. As communicated before, the other business activities of LEONI Kerpen will be discontinued. Both LEONI Schweiz and LEONI Kerpen are important steps as they address underperforming units and support announced improvement of our WCS portfolio. Another pivotal accomplishment is that we are not slowing down with the continued implementation of our performance and strategy program, VALUE 21. By the end of March, we had already implemented measures that are expected to yield gross savings of about EUR 600 million from 2020 onwards -- 2022 onwards, sorry. In terms of ramp-ups, we sold several production launches for important new projects in the first quarter. One example, the successful start of the production of wiring systems for the Mercedes C-Class at 4 LEONI locations. Another is our contribution to the launch of the high-profile all-electric Mercedes EQS. However, despite the strong start into 2021, we expect that we will continue to face multiple challenges in the coming quarters. In particular, this includes the ongoing COVID-19 pandemic as well as continued constraints in global supply chains. These constraints will likely impact availability of critical parts like semiconductors components and raw materials, both for us and for our customers. This could result in lower efficiencies, additional logistics costs and suspended OEM production days. Overall, the environment in which we're operating remains challenging. However, considering the strong first quarter, we are more optimistic for the year as a whole. As a result, we have raised our outlook for sales and earnings for the 2021 financial year. Compared to our previous outlook, we expect sales to go up significantly, not just in the low double-digit percentage range as stated previously. EBIT before exceptional items as well as valued before, VALUE 21 costs, is also expected to increase significantly, and we now assume to reach at least breakeven by the end of 2021. In terms of free cash flow, our previous guidance remains unchanged. We continue to expect a significant decrease compared to 2020, as we elaborated when we presented our full year results in March. Let me be clear, as we previously stated in our call for the full year results 2020, COVID-19 and the challenges surrounding the availability of pre- and raw materials will continue to weigh on our financial performance in '21. However, we continue to make good progress and remain confident that we're on the right track to further stabilize our business. Our focus remains on continue to diligently implant all necessary measures to improve LEONI's performance and efficiency in the future. Let me now hand over to Ingrid, who will run you through the financials, starting on Slide 3.

[Ingrid Jagering]

Yes. Thank you, Aldo, and good day, everyone. Let me start right away with our group sales. Last quarter's turnover of EUR 1.35 billion significantly increased by 20% year-on-year, mainly due to positive organic growth of more than 18%. As you can see on the chart, our organic sales have continuously recovered over the course of the last quarters. Our strong sales growth on group level was supported by both divisions, with WSD, up 21% and WCS, up 19% year-on-year. This development was driven by all regions, most significantly by Asia, which saw a 56% year-on-year increase. You might recall that China already had shutdowns in February and March of last year. In EMEA, sales have recovered by 17% year-on-year, whilst the equivalent increase for the Americas came to 8%. By the end of the quarter, negative currency effects of EUR 31 million were outweighed by a EUR 48 million impact from the higher copper price. However, there was no earnings impact. The encouraging sales recovery had a significantly positive effect on our earnings, as you can see on Slide #4. EBIT before exceptional items as well as before VALUE 21 costs came out at EUR 39 million compared to a negative EUR 17 million last year. Higher volumes had the biggest impact on our earnings, which were also supported by positive valuation effects from higher copper prices and currency effects despite increased salaries. Nevertheless, our operating performance was burdened by higher costs on the back of supply bottlenecks for components and raw materials of about EUR 17 million. This was especially true for the WSD division, where material shortages and higher logistics costs had a significant negative impact on our financial performance in Q1. Furthermore, last year's Q1 results benefited from about EUR 10 million in book gains due to sale and leaseback transactions. Adjusted for these 2 effects, the operating performance shown in the chart would have been clearly positive. Let us now take a look at our cash flow on Slide #5. Our free cash flow came out at negative EUR 100 million. Whilst this was clearly below the balanced level in the first quarter of 2020, please recall that that figure had been supported by a sale and leaseback program in the amount of EUR 66 million. Furthermore, normal seasonality played a role and our strong volume recovery resulted in a higher net working capital. At EUR 82 million, this weighed on free cash flow in Q1. In addition, we saw restricted breathing ability in our reverse factoring lines as a result of the rising copper price. Our operational CapEx, excluding effects from IFRS 16 was at the previous year's level at EUR 37 million in Q1 2021 compared to EUR 34 million in Q1 2020. The divestment of LEONI Schweiz resulted in a low single-digit million euros positive one-off cash impact in the first quarter of this year. As you may recall, exceptional items related to Kerpen had already been recognized in last year's P&L. They did not yet impact cash flow in the first quarter of 2021. We expect impacts on our cash flow throughout the rest of the year as we scale the activities down at the site step by step. I will now share a closer look into our divisions, starting with WSD on Slide #6. Compared to last year, sales in our Wiring Systems Division went up by 21% to EUR 845 million, mainly driven by an organic growth of about 22%. This organic growth was mainly driven by the recovery of the impacts of COVID and the ramp-up of projects, which were started in 2020 and 2021. These developments compensated for negative currency effects seen in the quarter. Similar to group level, we also saw increased volumes across all regions in the Wiring Systems Division, with Asia up 58% year-on-year, EMEA up by 19% and the Americas up by 7%. The expected project volume of new orders stood lower at EUR 200 million compared to EUR 400 million in the same quarter of the previous year. Overall, there were not many nominations that we were interested in, in Q1, but we expect this picture to change significantly throughout the remainder of the year. In addition, positive effects from higher volumes and our improved operational performance were offset by additional costs in connection with supply bottlenecks for raw materials in the low double-digit million euro range. WSD's reported EBIT, which stood at negative EUR 18 million in the first quarter, was burdened by exceptional items as well as VALUE 21 costs, which were in line with last year's level. Let us now move to the WCS division on Slide 7. In our Wire & Cable Solutions Division, first quarter sales were up by 19% to EUR 508 million, which was mainly driven by organic sales growth, especially in the automotive business. We have seen strong positive top line effects when passing through higher copper prices, which were partially offset by negative currency effects. Again, sales increased across all regions for WCS. Asia was up by 54%, EMEA up by 13% and the Americas up by 11% year-on-year. For WCS, our order intake improved to EUR 569 million compared to EUR 449 million in the first quarter of 2020. At the end of March 2021, our book-to-bill ratio was above 1. EBIT before exceptional items as well as before VALUE 21 costs significantly increased from EUR 4 million in Q1 2020 to now EUR 42 million at the end of March for this year, mainly due to increased volumes as well as mix effects. As expected, our reported EBIT of EUR 69 million was supported by the reversal of last year's onetime effects. This included EUR 32 million from the closing of our LEONI Schweiz divestment. Let us have a look at some key balance sheet items on Slide #8. Our equity ratio decreased to about 8% compared to the 16% we reported at the end of last year's first quarter. However, it has not changed since we reported it for the end of 2020. As a result of our lower equity, our gearing, which is defined as net debt divided by equity, stood at 540% at the end of March 2021 and more than doubled when compared to Q1 2020. Despite an increased net debt, our financial gearing measured as net debt to 12 months trailing EBITDA has decreased from 8.5x to 6.9x as a result of an increased trailing 12 months EBITDA. However, the structure of our balance sheet does underscore the necessity of our VALUE 21 performance and strategy program as well as the continued divestment of our WCS units. Please turn over to Slide 9 for an overview on our financial position. At EUR 1.4 billion, our financial liabilities remain almost unchanged compared to the previous year. All undrawn credit lines are firmly committed until at least the end of 2022. In terms of our liquidity position, we have seen a decrease in available liquidity mainly due to the further drawdown of credit lines, which are financing the negative free cash flow. Please note that of the EUR 330 million operating loan from April 2020, the final EUR 90 million became now available as of April 1, 2021. In total, at the end of Q1 2021, cash and undrawn credit lines amounted to EUR 316 million compared to EUR 422 million at the end of 2020. For all cash provisions and undrawn credit lines shown in the chart on the right, guarantees of EUR 62 million have already been deducted. The historic figures have been adjusted accordingly. And with this, I hand back to Aldo who will now provide you with an update on various business developments.

[Aldo Kamper, President, CEO & Chairman of the Board]

Thank you, Ingrid. I'm happy to elaborate on some of our business highlights in the first quarter of 2021. As mentioned in the introduction, we managed a successful start of production of wiring systems for the Mercedes C-Class, which entailed 4 LEONI locations. Here, our Wiring Systems Division supplies the low voltage harnesses, as well as the high voltage harnesses for the hybrid versions. Also, the cable division, by the way, has a high content in the cable part of these vehicles. In addition, we support low-voltage and high-voltage harnesses for the exciting Mercedes EQS. The mentioned launches are underpinning LEONI's leading market position as development partner supplier for electric and hybrid cars. These 2 projects are excellent examples of successful launches and how we are addressing the ramp-up challenges of the past. We're on a very good path and our customers value our expertise. We are already a trusted adviser to our customers and aim to become even more involved in design of future architectures at an early stage. We strive to contribute system expertise for the benefit of our customers, optimize the systems overall and thereby, playing a part in the making electric vehicles affordable. Let me now summarize the first quarter to finish up. Overall, we had a robust start to the year, as demonstrated by our sales and EBIT before exceptional items as well as before VALUE 21 costs that were significantly higher than last year. Furthermore, we've made good progress on our measures to improve our portfolio. We successfully closed the sale of LEONI Schweiz and reached an agreement on the sale of Data Communication and Compound Business units of LEONI Kerpen. We expect to make further significant progress on the sale of other parts of WCS this year. Despite the progress we have made, we must, of course, acknowledge that our profitability and balance sheet structure are still not satisfactory. While there's no quick fix to these matters, we are proud of the achievements we are making in regard to our cost structure, operational performance and portfolio improvements. In the end, these achievements will also enable us to improve our financial position. Further, we managed the successful start of production of Wiring Systems for several big programs, among others, the important launch to Mercedes C-Class. Based on the experience of the past quarters, we're confident that we will successfully manage the further ramp-ups of this year. Looking ahead, at the full year 2021, the stability of supply chains remain a critical matter. Bottlenecks in supply of chips and raw materials, such as connectors will continue to pose major challenges regarding efficient production, logistics as well as potentially having an impact on volume. The pandemic is still on the overcome, and there continues to be uncertainty. More than ever, we are aware that our continued discipline and the successful implementation of all measures to improve business performance and efficiency remain key to get LEONI back on track. Our outlook for 2021 is characterized by the confidence that, despite all these challenges, we will continue to sustainably stabilize LEONI. In this context, we are pleased that we've been able to raise our forecast for the current year. Last, but not least, please allow me to make an important point. Even as optimism is rising, the health of our employees remain our key priority. As a company, LEONI is therefore actively supporting the fight against the pandemic. We've already started vaccinating our employees in Ukraine and Serbia for several weeks now in close coordination with local authorities and are now also starting in Romania, Russia and Mexico. In similar fashion, we're also keen to make our infrastructure available for this purpose in Germany and are working with relevant stakeholders to hopefully make this a reality soon. Thanks so much for your attention, and we're now happy to take your questions.

[Operator]

[Operator Instructions] The first question comes from the line of Christoph Laskawi, Deutsche Bank.

[Christoph Laskawi, Research Analyst]

The first one would be on your order comment in WSD. You said essentially that the order intake decline was in line with your expectations, given that there haven't been too many projects which you have been interested in. Could you characterize that a bit more. Is that more low versus high voltage? Or is it the margin hurdle range that you need to see? And what makes you think the characteristics of the RFQs are changing going forward. Is this more, say, a short-term dip because of the pandemic and its semi shortage? Or is there any structural change to the RFQs in the market? Then, on current trading, if you could comment a bit on, if you see first impacts of the production shutdowns by the OEMs, especially Ford was quite vocal about it. If you could comment on that and also what it means for the efficiency in the plants? And then, last question will be on WCS. Quite a strong margin in Q1, also if we strip out the copper valuation impact, which I would assume the majority is seen in that division. Could you highlight the end markets or products that have been driving the margin improvement? Or if there was any, I think, extraordinary in the quarter?

[Aldo Kamper, President, CEO & Chairman of the Board]

Yes. Okay. Let me take those questions. The order pattern in WSD, as Ingrid mentioned, is in line with our expectation. We have started already 2 years ago in having a very systematic approach on which programs we want to win, have a clear road map on the ones that we bid for, and we are obviously then trying to win those ones that we have put our sights on. And we are continue to winning the expected amount of programs. However, in this quarter, none of the programs that we have set our sights on were nominated. That will change in the upcoming quarters where a number of larger programs will be awarded. In that sense, the selection of the programs by itself that we go through is a combination of financial metrics like hurdle rates and cash flow profile as well as technological fit and also fit to our current infrastructure. And out of those factors combined, we select the projects going forward, always focused on the core group of customers that we have set our sights on. So in that sense, nothing exceptional. There is always some movement back and forth in -- when programs are exactly nominated, and this quarter was just a lull in nominations at the moment. But overall, for the year, we expect a significant and meaningful order intake going forward. On the current trading, we already saw some impact in Q1, but there will be more impact, I think, in Q2 in terms of the impact out of the supply chain topics. On the one hand, obviously, the semiconductor topic that has been very prominent in the press is more of an issue than it was in Q1, even though already in Q1 also, here, we saw OEMs take out shifts here and there or day here and there. Now we see OEMs taking out several days or sometimes even a week at a time. However, there is the expectation of the OEMs and the optimism that these volumes will be made up for later in the year. Some of our customers, for example, are taking out days now, but are already saying they want to reduce the vacation time in this July, August to make up for those. So if availability of semiconductor improves, the second half year will become stronger. However, that is only an indirect impact for us in terms of OEM demand. The part that hurts us more directly is the availability of connectors. We already, I think, referenced that in the call on the full year, a few weeks ago. That still continues, and that makes our life quite difficult. And also, we had significant additional cost, about EUR 17 million to digest in the first quarter just to deal with that. And that has a very direct effect on the efficiencies in the factory. The stop and go, if parts are available, you have to produce and you have to try to do your best to make up for a late delivery and have to then ship it by air sometimes even to your customers to keep their just-in-time production running. That, as you can imagine, is very painful, both in terms of additional logistics costs as well as the stop and go has an impact on efficiency. And it even happens that we are expecting a delivery of connectors that isn't coming and section of people are standing around in Egypt because the connectors weren't there when they were supposed to arrive in the morning. So that has an impact. Also that, unfortunately, is our expectation will continue for a couple of months going forward. Combined somewhat with that, but also a broader topic is then the topic of plastic of -- resins for plastics. The prematerial -- some issues with prematerial factories, in the U.S. and here in Europe, are also rippling through the industry. And I think we will see more and more of that impact as well across our customer base. And also, that will have both an indirect effect as our customers might struggle to get their parts as also for us, it might have an effect because it doesn't make it easier to get the required connector volumes that are also using resins like this. So overall, this whole supply side topic is quite meaningful. The good part, if you will, is that overall demand seems to be there at the moment. The industry not being able to keep up with it, that is the issue. But as that then, hopefully, over the next months, starts to fade away, I think we can all hope and expect a strong ending of the year as these things will fade out. And then, on WCS, you asked for the strength of the business in that area. Here, I think the major topic is, I mean, first of all, of course, the volumes were very good. No question about it. We are still, as in WSD, basically working on a very slim structural base given the volumes of last year and the VALUE 21 efforts. And if you have a lean cost structure and rising volumes, the effect obviously is also significant. On top of that, it's also a mix effect. We see, especially on the automotive side, that the specialty cable business is doing really well, is also grown over proportional as more and more digitalization is entering the vehicles and data cables are much more asked for. Also, the electrification that is rapidly increasing is helping here because a lot of the charging cables are also made out of WCS products, and both of these categories have above-average margins. So that helps. On the industrial space, we've also seen a good rebound in topics like transportation and robotics. Also, here, there's positive mix effects. And we also discontinued some of our less productive product lines last year and also that indirectly helps now to continue to boost performance. So a strong start based on volume and positive mix effects, and we hope to be able to carry that forward as well.

[Operator]

The next question comes from the line of Marc-René Tonn, Warburg Research.

[Marc-René Tonn]

I would have 3 questions, please. One would be, I think, when, let's say, all the [ implicitly ], given with the guidance you have for the full year in terms of earnings, and you mentioned that you still have a lot of ramp-ups to do in the remainder of the year, if you could give us some indication about the phasing of those, whether we should expect, let's say, the largest drag on earnings in the second quarter? Is it more on the third quarter or even the fourth quarter at WSD? That would be helpful here. Secondly, on the Wire & Cable Solution business, you mentioned the 2 disposals you've made with Kerpen and Schweiz. Can you give us the, let's say, the lost revenue, the amount of top line headwind, we should think of this for the remainder of the year or on a full year basis? That would be helpful. And the last question would be on the free cash flow outlook for the current year, whether you could provide us some indication what you would expect for the quarters to come with your, let's say, for the potential to further increase factoring, what you would expect in terms of CapEx for the full year, perhaps working capital overall? So what would be you're thinking there. Also, what we should expect in terms of cash outflow for restructuring provisions, which you have done last year?

[Aldo Kamper, President, CEO & Chairman of the Board]

Okay. Let me take the first 2 and Ingrid, will take the third one. In terms of the ramp-up activity, it is actually relatively well-paced throughout the year. As we highlighted, we have, in the first quarter, gone through the launch of the first cars on the C-Class platform and some other vehicles. And if I look at the quarters going forward, actually ramp up activity and ramp-up costs will still stay pretty constant throughout the year. On your second question, lost revenue, both units were about EUR 150 million each in terms of revenue. So we're losing, on an annualized basis, about EUR 300 million in revenue.

[Ingrid Jagering]

Yes. You asked about the free cash flow outlook. Of course, I cannot provide you with a better guidance that we have given you prior to that, but I can comment on the restructuring provisions that we built up end of Q4 last year for our LEONI Kerpen restructuring. There will be a mid-double-digit cash out -- low to mid-double-digit cash out in the coming quarters. It is highly depending on when the respective employees leave the site. We have a very diligently planned ramp-down plan to not impact customers, to not impact our orders that are still in the making and being delivered. So there is a clear ramp-down phase that will reach until the end of the year. And by the end of the year, we have -- we will see the complete cash out for the restructuring provisions of Kerpen.

[Operator]

[Operator Instructions] The next question comes from the line of Michael Punzet, DZ Bank.

[Michael Punzet, Analyst]

I have one question with regard to your outlook. You raised your revenues outlook for the fiscal year. Is that based on better demand from your customers? Or is it based on higher expectations for the average copper price?

[Aldo Kamper, President, CEO & Chairman of the Board]

It's both, roughly balanced. We both see that demand is strong in both divisions, but obviously, also copper price has a meaningful impact as well. And copper prices have been rising rapidly and that is also priced into it. But it is both. It's also underlying demand that is going up. It's not only the copper price effect that we are showing here.

[Operator]

The next question is from the line of Akshat Kacker, JPM.

[Akshat Kacker, Analyst]

Akshat from JPMorgan. 3 from my side, please. The first one on the profit bridge. And when I look at this bucket of salary inflation, from what I understood previously, the provision that you had done for onerous contracts over the last 2 years, this impact had basically been taken care of. How should we think about this going forward? That's the first one. The second one, again, coming back to WSD. Is it possible to quantify the ramp-up expenses in the first quarter that you've already seen? And how much do you expect ramp-up costs to be in the second and the third quarter? And again, on the freight and the special kind of connectors cost around EUR 17 million in the first quarter. You said that you expect this to continue for a couple of months. How much of this can be recouped in the second half? And the last one on working capital. I know there's a lot of moving parts here, but can you just broadly discuss your assumption for the full year in terms of working capital, including the incremental receivables factoring, please?

[Aldo Kamper, President, CEO & Chairman of the Board]

Okay. Let me just go through those first 3. Salary inflation is obviously in terms of -- it's still, of course, a topic year-on-year. There's no question. And what we're showing here is the year-on-year impact of salary increases that we are faced with, and they are still a reality. What we have taken care of in the balance sheet is onerous contract provisions is in the case where our expectations -- the long-term expectation on inflation are above the ones that we have made in our assumptions that we quoted for the business. And then, if the project becomes not profitable anymore, you have to take the onerous contract provision right now. So in that sense, related, but not the same things, and both are happening at the same time. Yes, we have taken care of the programs and have taken this forward look, but we obviously still have inflation as we're showing here that we need to deal with and compensate. On the ramp-up costs, we roughly saw EUR 15 million, EUR 1-5 million, in the first quarter. And as I said before, we expect that to continue roughly at a similar pace over the next quarters. On the cost of the connectors and special freight and so on of EUR 17 million. You're completely right. We will obviously fight for -- to recoup that amount with our suppliers. And in that sense, it is an impact this quarter, next quarter. We are starting the negotiations or have already started negotiations as we speak. However, before you settle that and you get agreement on it, it will be, from my experience, also months to a few quarters before you have finalized that. We're fighting to get it completely recouped, but I think also here, we should be prudent and shouldn't expect that everything is being reinstated as you always have a discussion on how exactly to measure it. But obviously, we are fighting hard to get this money back as we feel that this is not specifically our issue, but that's very much also do with our suppliers in this space.

[Ingrid Jagering]

Yes. Let me take the question on the net working capital assumptions. I'm not truly commenting towards the next 3 quarters. But what I can say is that the major buildup of net working capital was done in Q1 catering for our REMs that are currently happening. Aldo commented on the big ramp of the Mercedes C-Class that we are managing at this point of time. So you can assume that the big buildup is done. There will be a little bit more in Q2, but then we should be very stable. The net working capital development, though, is highly depending on our development of the copper price that, of course, is the topic. You can -- just to give you some overall assumptions, we are buying about 150,000 tonnes of copper every year. So every change of EUR 1 in copper price. Looking forward, if that change stays for the next 12 months, would have an impact of EUR 150 million more or less revenue or more or less net working capital impact. So it is a major impact that we can only recover over time. So that is highly depending on the copper price development, but also on our possibility to -- yes, save that effect against breathing into our factoring or reverse factoring lines. And that is always a balance that we are striking. But in the end, I would comment the major buildup is done. Q2 might be a little bit more, and then we should all be done with it.

[Operator]

[Operator Instructions] There are no further questions at this time. I hand back to Aldo Kamper for closing comments.

[Aldo Kamper, President, CEO & Chairman of the Board]

All right. Thank you very much. Thanks for your interest today in LEONI, and thanks for your questions. I hope your takeaway is that we are continue to making good and solid progress. I think what we are seeing now, like in the fourth quarter, when volumes come back, we start to see the fruits of the labor that we have put in over the last 2 years in terms of optimization of our organization, of our processes, of our cost-saving measures, the disciplined approach to new order intake, all these things are starting to pay off. And given the mood at the moment, I think we start to see how this is supporting our business. And given the outlook of the markets that we spoke about, yes, there's still a lot of uncertainty in it. There's no question. But overall, I think this year will be, from a demand perspective, obviously, a much better year than last year, and we had a very good start into '21 to kick it off. And yes, we all will work hard to continue our part of that equation, do everything in our power to make sure that we continue to make the progress like we have shown in the last quarters and are doing everything also to keep the supply chains flowing. That is a big responsibility that we have as a supplier to the OEMs. And that's a day-to-day priority, but I think one that we are also very professionally handling. So thanks for your interest. Stay healthy, and then, we'll probably again touch base next week when we have our general assembly. All the best. Take care.

[Operator]

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