ACCO Brands Corp (ACCO) 2008 Q3 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the ACCO Brands third-quarter earnings conference call. My name is Ann and I'll be your coordinator for today's call. (Operator Instructions). As a reminder, this conference is being recorded for replay purposes. At this time all participants are in listen-only mode. We will be facilitating a question-and-answer session towards the end of the presentation. I would now like to turn the presentation over to Jennifer Rice, Vice President of Investor Relations. Please proceed.

Good morning, everyone, and welcome to our third-quarter 2008 conference call. On the call today are Bob Keller, Chairman and Chief Executive Officer of ACCO Brands Corporation, and Neal Fenwick, Executive Vice President and Chief Financial Officer.

We have posted a set of slides to accompany this call to the Investor Relations section of ACCOBrands.com this morning. These slides give a lot of detailed information to supplement this call.

Our discussion this morning will refer to our results on an adjusted basis excluding non-cash, goodwill and asset impairment charges, restructuring and nonrecurring items. A reconciliation of these results to GAAP can be found in this morning's press release.

During the call we may make some (technical difficulty) statements and, based on certain risk factors, our actual results could differ materially. Please refer to our press release and SEC filings for an explanation of those factors. Following our prepared remarks we will hold a Q&A session. Now I'll turn the call over to Mr. Keller.

Thank you, Jennifer, and good morning, everyone. I'm happy to be here this morning to speak with you about ACCO Brands. I look forward to the opportunity to meet with many of you in person in the weeks and months to come. First, a quick overview of third-quarter results.

We completed the quarter with $435 million in sales; a 12% decline over last year's third quarter, the largest driver of this decline continues to be our US market. Our adjusted operating margin contracted 110 points due primarily to the deleveraging effect of the lower sales on SG&A. As a result earnings per share declined 39%. Importantly however, our strong cash flow enabled us to reduce debt by $65 million in the quarter.

As most of you know, I've only been on the job for two weeks; however, I have known ACCO Brands for more than a decade, both as an executive with Office Depot and as a member of our Board of Directors. Based on that I have a strong belief in the future of this company. We own some of the world's most powerful consumer brands in the office product space and we are fortunate to have a wealth of talented associates across the globe. I believe that even in these extraordinarily challenging times if we plan and execute well we can forge even stronger relationships with our customers, take market share from our competitors and build value for our shareholders.

I'm sure most of you saw last week's organizational realignment announcement. In short, we've combined our former Office Products and Document Finishing groups into two geographic-based business segments, one serving North American markets and the other focusing on the rest of the world. As I said last week, these changes will result in fewer layers of management, better and faster decision-making and greater accountability.

More importantly though, they will significantly improve our customer service by establishing one voice to our customers and a global engine for product innovation. I'll be spending a great deal of time in the coming days meeting with our customers to understand what we need to do better to earn a larger share of their business.

From my perspective our biggest near-term challenges are in the United States. Some of these challenges are not of our making; virtually every business enterprise is suffering to a greater or lesser extent in the current economic environment. Some of the challenges we face though are of our own making and we need to address them. We've lost market share in certain categories that have been traditionally strong ones for ACCO Brands.

We've also lost share in the mass channel which is very meaningful outlook for Office Products, particularly during the back-to-school season. And our US supply chain isn't operating anywhere close to optimal performance levels. None of these are acceptable and we're determined to reverse these trends.

I believe our new organization structure is an important step to align us with the needs of our customers. We're redoubling our focus on supply chain excellence which should drive improved sales results. Given the challenges in the global economy it's hard to imagine that the overall Office Products marketplace will grow, especially in the near term, and so it's imperative that we start to take share.

In some categories we know we haven't been cost competitive and we're working to improve our position without eroding our profitability. Finally, we're putting a greater emphasis on customer service. Given our inherently superior products and supply chain potential we should be in a better position and better solution for our customers from both a financial and a product perspective than less capable offshore suppliers who bring little added value to the product equation.

We're performing better in the rest of the world, although the economic downturn in the US has taken hold in most of our other markets. Europe continues to be a bright spot for us at the moment, in no small measure because of the investments we've made in our pan-European infrastructure. We believe we are better positioned than any of our competitors to take market share in a recessionary environment in Europe.

Sales in Australia, New Zealand, Mexico and Latin America remain strong. Canada, as you might expect, looks a lot like the US at the moment. I'll have more color to add in future calls as our new geographic organization takes hold and gives us an even clearer view of market trends.

In short I believe in the future of our company. We'll start next year in a much better cost position because of the dramatic actions we've taken throughout 2008. And while I don't believe we'll see any improvement in underlying demand, I believe we can and will take market share in 2009 and be in a position to more fully capitalize on opportunity when economic conditions do improve.

Before I turn the call over to Neal to review Q3's results in more detail I want to acknowledge what many of you know. Neal is a tremendous asset to ACCO Brands with significant knowledge of the Company and our industry. I look forward to working with him and the rest of the senior team to restore ACCO Brands' leadership position in our marketplace. And with that, Neal, I'll turn the call over to you.

Thank you, Bob, and good morning, everyone. As noted on slide 4, comparable sales for the quarter were down 12% year-over-year driven by lower consumer demand, lost product placements and planned business exits. Adjusted gross margin decreased 20 basis points; the decline was due to lower sales volume and the deleveraging of our fixed costs. SG&A margin was adverse 110 basis points.

The deleveraging effect from the lower top line was in offset cost savings in the quarter including a further reduction of incentive accruals. The benefit to the P&L from essentially zeroing out the remainder of the future period performance share incentive accruals was $2.5 million. We have moved very aggressively to reduce costs in light of the sales softness.

The actions we announced last quarter will have a more significant impact in the fourth quarter. The most recent announcement mostly impacts 2009. In all adjusted operating income declined 110 basis points and adjusted EPS declined $0.15 or 39% in the third quarter.

The adjusted tax rates for the quarter was 34%, higher than we had guided because of the elimination of state tax benefit as a result of setting up a valuation reserve for state NOLs as well as a higher tax rate for certain foreign earnings expected to be repatriated. We now expect the adjusted tax rate for the year to be 35%, implying a 37% in the fourth quarter. This higher rate is the result of not being able to recognize tax benefits accrued from the vesting of equity grants awarded in earlier periods.

In terms of reported items, as expected we did incur one-time charges in the quarter. Pretax restructuring and restructuring related charges were $5.2 million. We also took a further $31 million non-cash impairment charge relating to our laminating segment and an $11 million tax charge for a valuation allowance of state income tax loss carry forwards.

On slide 5 we have provided a breakdown of our year-over-year sales change. We are still cycling through a $6 million impact from the planned business exits, mainly the sale of our Maco label business in 2007. We're also working through the product placements lost in 2007 which had a $13 million impact on the quarter affecting Office Products and Document Finishing. Once you isolate the $19 million of lost share the underlying business was down 8%.

Slide 6 -- this shows the main items impacting our margins for the first nine months of the year. Notably price less material inflation now shows a year-to-date position that is slightly unfavorable at negative 20 basis points. Given that this was a favorable 70 basis points at the end of Q1 and 20 basis points by Q2, the sharp rise in material and freight costs earlier in the year are still working their way through our P&L and this will continue to impact Q4.

Net synergies came in at $9 million in the quarter in addition to the $12 million in the first half of the year. We are on track to deliver total cost savings of $35 million this year, a combination of our integration synergies and additional cost reduction activities. Within SG&A the volume cost leverage line reflects $4 million of severance charges, these are not considered restructuring as we continue to downsize our cost structure and respond to lower volume.

Moving on to a discussion of our business segments on slide 7. Sales and office products decreased 14% with underlying volumes down 15%. The US and European markets were the drivers of the sales decline; combined their sales were down 18%. Adjusted operating income decreased 19% and margin contracted 60 basis points primarily as a result of the lower volume and higher raw material costs.

We do have a broad price increase going through in January of '09 to offset the higher raw material and freight costs we are now experiencing. Although many commodity costs are now down from the peak they are still well up from this time last year.

Now turning to document finishing -- sales decreased 10% with underlying volumes down 14%. Sales declined in the US, Europe and Canada. Adjusted operating income decreased 21% and margins contracted 90 basis points as a result of the lower sales volumes and higher raw material and freight costs.

Moving on to Computer Products -- sales decreased 7% and underlying volumes declined 11%. The decline was due to the substantially lower consumer demand mainly in the United States, but most of our geographic markets declined. Adjusted operating income decreased 28% and margins declined 580 basis points to 19.6% against a record level in the year ago quarter.

And finally looking at commercial laminating -- sales declined 10% with underlying volumes down 14%. The decline was driven primarily by lower film sales in Europe and lower print finishing equipment sales worldwide. Adjusted operating income was a loss of $200,000 compared to income of $700,000 in the prior year. The decline was the result of lower sales volumes and higher raw material costs.

Turning to slide 8 -- we did generate approximately $55 million in net cash flows this quarter which included reduced working capital. Cash restructuring was positive this quarter as a result of $20 million of proceeds from building sales. All told debt was reduced by $65 million in the quarter. Our total debt balance at the end of the quarter was $771 million and our leverage, as measured by gross debt to EBITDA, was 3.8 times.

We continue to expect net cash flow for the year to be $40 million to $60 million, all of this will go to debt reduction. We are targeting a year-end gross debt balance of less than $700 million. As such we expect remaining compliance with our maximum leverage test even when it tightens 3.75 times at the end of the fourth quarter.

Finally, turning to slide 9. As noted throughout this call and in our press release, clearly these are very uncertain times in our economy. Weakness in consumer and business spending, raw material inflation and customer consolidation have combined to create an atmosphere of prolonged market volatility.

All of these factors make it increasingly difficult to provide meaningful guidance until visibility improves. We therefore are not providing sales or earnings guidance for the balance of 2008 or 2009. However we will continue to provide some assumptions to help with modeling certain cash items.

With regard to the chart, we have added the additional cash flow associated with all of our productivity initiatives to the cash restructuring figures. We've amended our severance programs so that we now pay severance out over a time such that the cash outflow is aligned to the benefit, avoiding any upfront cash impact. Therefore while having announced more restructuring activity in 2008, the cash outflow for 2008 is slightly reduced and now impacts 2009 which is more in line with the increased benefits expected.

Based on the broad perspective that 2009 will be another challenging year we have dramatically reduced our capital expenditure assumption. We now expect $20 million in 2009. Our effective tax rate has increased for 2008. This was caused by a 3% bump from creating the state tax valuation allowance (multiple speakers) further adjustment related to the vesting of restricted stock in which the previously recorded book expense, in accordance with FAS 123r, now exceeds the related tax deduction as a result of the substantial reduction in our stock price.

Finally, before opening the call up for questions I would like to provide an update on our Commercial Laminating Solutions segment. The process to potentially sell $100 million of the revenue associated with the business is well underway, but market conditions may not enable us to realize what we consider to be the full value of the business and this could lead us to reconsider our alternatives. We will update you further once we are able to. At this point, Bob and I will be happy to take your questions. Operator?

(Operator Instructions). Reza Vahabzadeh, Barclays Capital.

Good morning. There was obviously some weakness in the categories you compete in and, as you mentioned, some self-inflicted issues. Have you found a way to detect how much of the weakness may have been due to your execution issues, whether it's service and distribution issues or whether it's just loss of share? Just how much of the issues are I guess resolvable internally that we can think about going forward?

On slide 5 I tried to articulate that numerically and approximately 4% of our decline is due to lost share in our opinion, and 8% is effectively due to the categories we compete in. And that's comparable with what our major customers are effectively saying in that you've had -- all of our three major customers reporting significant declines in their business.

If you took a weighted average of their sales versus ours you would see that they're down about 10 points in the US, we're talking about being down about 8 and that's probably because we have international business which is down less than our US business.

And so we're in the categories which are more exposed than certain other people and we also have experienced less of an impact from back to school this year than you would normally have seen into Q3. So we would anticipate in Q4 having a less negative business than it appears in Q3 on a year-over-year basis, but obviously the economic position is still bearing very negative for our category.

The other piece of that answer is I think we are capable of taking market share back from our competitors.

And is that something that's readily accomplishable? What do you have to do to get that?

I think the first thing that we have to do is we need to get our supply chain metrics in line with our customers' expectations. I think we've done that pretty consistently over the course of the past year in Europe and it's paid significant dividends. And I think we are underperforming expectation domestically in terms of our line on time and complete metrics.

Okay. And I couldn't tell exactly from your comments -- I apologize. There are so many other earnings out there today. But have sales metrics materially weakened in your businesses in Europe and the US as we have headed into fourth quarter from the third quarter or are they about the same?

In terms of the fourth quarter versus the third quarter, the big difference is that the third quarter has an annual event called back to school.

Right. No, I'm talking year-over-year.

Yes, and so year-over-year our third quarter, we believe, will be more dramatically affected than our fourth quarter will be because back to school had a second element this year which is the back to school shifted predominately towards more mass retail channels and we have less position in those mass retail channels. And so other people picked up our share due to that shared channel shift in the third quarter. That won't repeat in the fourth quarter.

And the same in Europe?

In Europe it's a different story. We actually are gaining share in Europe right now.

Okay. And then just one housekeeping item. What was the cash on hand as of the end of the quarter?

From memory about $34 million.

$34 million, okay. And as far as cash taxes for the year, are you still in the $15 million to $20 million range?

On slide 9 we quote those as between $18 million and $22 million.

Okay. Thank you much.

Bill Chappell, SunTrust.

Good morning. Bob, maybe you can talk a little bit from the Board's perspective about the CEO change intra quarter. It seemed to be -- there were two different announcements about the Chairman and the CEO and it seemed like the change accelerated. And so trying to understand -- was there something internal that really changed because certainly the macro issues are affecting the whole industry. So I'm just trying to understand what was company specific to accelerate this change?

I think the answer is pretty simple. I'm here because we weren't meeting our own expectations. And over a 30-day period during the course of the quarter our miss got greater and the Board sent me here with some very specific focuses. We wanted to increase our focus on our customers; we needed to reduce the complexity and increase the accountability within our business; we wanted to manage cost and cash very, very closely.

We clearly need to improve our US supply chain performance. We think we've got an opportunity to increase our mass-market penetration. And frankly, the final thing, which is an important thing to us, is we wanted to create an ACCO Brands culture. We've got a wonderful business, but our cultures are frankly product cultures and not a corporate culture and we need to pull the team together to have ACCO win in this marketplace.

Okay. And with regards to currency and FX, can you just remind us, has there been a big lift to operating profit from FX year to date and do you see that as a significant headwind go forward?

Yes, that's exactly right, Bill. We've seen a benefit all the way through to the end of August within September turning adverse on us. In Q4 it will be significantly substantially adverse if the current exchange rates are maintained with the dollar's strength and the other currency's weakness. And so, in simplistic terms we've had about a $7 million benefit on a year-to-date basis through nine months and all of that will be given up in Q4 and potentially with it turning slightly negative for the year as a whole.

And that's $7 million to operating profit?

Yes, it is.

And then just finally, could you just give us, Neal, an update maybe on debt covenants issues or debt covenants over the next two or three quarters and if there are any changes in terms of the key ratios?

Yes, the key issue is our gross debt to EBITDA and it's adjusted EBITDA that is used for the metric. That's a 4.25 leveraged test as at the third quarter and we came in at around about 3.8 and that drops to 3.75 in the fourth quarter and that remains then through to the fourth quarter of next year when it drops down to 3.5. And so that leverage test will be tight for us in Q4 and it will be tight for us in Q1. And so the key thing is to focus on getting our gross debt down, it's why we're getting below $700 million at the end of the year and it's working both sides of that equation in order to achieve it.

And one follow-up. No word on the divestiture at this point? With the write down this quarter is that postponed definitely or is there any expectation of something happening by year end?

No, it's still very active at the moment, but I'm just being realistic about the fact that asset prices in the marketplace have gone down and obviously we've reflected that in taking a further goodwill adjustment in that business in terms of our own valuation and it's a question of whether you can complete things with the current banking market. But we're still fairly optimistic that we can conclude something by the end of the year.

Okay, thanks.

Bill Schmitz, Deutsche Bank.

Good morning. Can you just talk about the trade inventory levels and as some of these stores close have you stepped up your obsolescence allowances? Are there any obsolescence charges or accelerated obsolescence charges this quarter and do you foresee any more going forward?

What we've seen throughout the year literally flowing on a market-by-market basis is that as our customers have recognized as a permanent downturn in their own volumes, they've obviously adjusted their inventory down in order to make sure they don't have too much. And so that's really hit our business as a wave; you saw some more of it in the third quarter. But what impacted us in the third quarter was mainly where new markets were going down such as Canada and western parts -- or eastern parts of Europe.

And so we believe that our customers' inventories for our products are very much in line with where they would want them to be at the end of the third quarter. And from our point of view you will have seen that our inventory had grown in the first quarter of the year quite significantly. I'm pleased to tell you that we've got that inventory back down as at the end of the third quarter and we would anticipate driving that inventory down even further as we get into the fourth quarter.

It really is the benefit of what we've done on the distribution side. So we should permanently be able to run with lower inventory than we had in the preceding year and that will come to pass as we go through the fourth quarter and into the first quarter of 2009. So from an obsolete inventory point of view, we manage our products very well. We've obviously taken obsolete inventory charges this year as we would ordinarily. But they're not actually out of line with how they would have been in prior years.

Okay, great. And then just how much do you have left in the revolver? Because I know the March quarter is typically a seasonal working capital use quarter. So is there -- what availability do you have to borrow to get through that inventory build for the March quarter?

We have substantial capacity on our revolver. So as at the end of the third quarter we had about $20 million drawn on the revolver. The revolver is $150 million and then there's approximately $15 million to $20 million that would be covered with LCs. And so the vast majority as at the end of the third quarter was undrawn and we would anticipate having zero drawn on it at the end of the year.

Okay. And then just a follow-up to a previous question. Did October volume fall more than you expected? Because a lot of the companies that we spoke with said September was bad but October was awful. I mean, it was almost like a standstill. And it sounds like you guys really didn't see that. Is that fair?

What we've seen is a great deal of volatility on one month to another and it's almost a function of individual months for us are not reflecting what's happening in terms of point of sale, they're affecting very much what our customers are doing in terms of responding to their own inventory. And so the marketplace is very volatile and our customers' response to it tends to be volatile.

And so if you look at our third quarter, our single worst month was August which wasn't reported by many of our customers as a singly bad month, but it was our singly worst month and we saw a pickup in September. And so, as you move into the fourth quarter I anticipate seeing similar volatility that really doesn't tell you very much.

Okay. And then lastly, I promise. On the computer accessories business or Computer Products business, what's the Circuit City impact on that? Because I know that's a big retailer for you and they're going to close 20% of their US stores. So A, what happens to that inventory; and B, how does it impact that business?

Although they're closing 20% of their stores, it wouldn't surprise you that that doesn't represent 20% of their revenue. And so they're obviously closing their least performing stores and, from our point of view, that's a good thing because it helps them to be a viable customer. And so we're continuing to support them and we think that what they're doing makes sense for their business. I think obviously it will make them ongoing a slightly smaller customer, but it's not that material in the scheme of things. The more important thing for us is that they remain a viable outlet for our products.

Got you. Do you have a big receivables exposure there?

We don't. We manage that carefully.

Great. Thank you very much.

Arnie Ursaner, CJS Securities.

Good morning. Most of my questions have been answered, but two that I would like to try to follow up on a little bit if I can. One is, can you update us a little more on how the whole pan-European strategy initiative is going?

Yes, I think a couple of things. I think our view of having a pan-European model frankly helps us in recessionary times. I think having the opportunity to compete against smaller local competitors in these times gives us a pretty significant advantage. And we invested pretty heavily a couple years ago in the European infrastructure and I think frankly it's paying dividends today. Our Born distribution center is performing at very high levels, frankly 96% [line on time] and complete and that's allowed us to start to take market share back in that marketplace.

Okay. And my final question relates -- I know you're not giving formal views towards Q4 or for next year, but as you go through the negotiations with your key customers for pricing for the upcoming year will margins be able -- will you be able to fully recover your higher costs in your negotiation or is there just too much pressure on you to be able to do that? And obviously volume is the uncertainty on fixed cost, but on all your variable costs are you basically able to get enough price relief to maintain or improve margins?

Well, we're in the midst of those discussions so I'd really rather not comment on it. I think we have a pretty balanced approach to that question with our clients and we'll see. I think we're clearly -- some of our commodity pricing has started to come down, it hasn't necessarily been reflected yet in our cost structure and we do need to recover some of that. So we'll see.

Do you have intentions or are you more than willing to walk away from business that you don't think meets your margin objectives?

We're not in here just for the work. We need to be profitable and we need to be profitable at a product line level. But I think the other component that is in our hands is our ability to control cost and I don't think we have been as effective as we need to be in terms of our execution which adds cost to our supply chain operation. And I think we have an opportunity to be more aggressive about price and maintain margins.

Thanks very much.

Derek Leckow, Barrington Research.

Good morning. So a focal point for 2009 seems like it's going to be recapturing lost market share. And you've talked a lot about controlling cost and improving the efficiency of your supply chain in the US, but you also said that you're going to take a price increase in your largest segment in January. So I'm trying to figure out, these price increases, will they eventually stop? Or you going to reduce that at some point? Or what -- it seems like countervailing trends there. Can you talk about that a little bit?

Obviously one of the big things that's occurred to us is a raw material cycle that ran up significantly through 2008. And you'll see us to get into the fourth quarter that the price increases we had in January of 2008 don't leave us whole during the year of 2008. So we go into 2009 with a raw material deficit. And although prices have come down they're still not back where they were.

I'll give you a good example, cold rolled steel -- in January of '08 we were paying $819 a ton. That peaked at $1200 a ton and today we're paying $890 a ton. Well that's still up 9% year over year, so we still have to have some price increases to reflect what is the underlying year-over-year increase in our operating costs. And obviously that is true for everybody we compete against. And so what you're seeing is that all of the suppliers in our market are putting price increases through into the market.

But as far as recapturing that lost market share that you guys talked about -- I have a question on that as well. I wanted to figure out from slide 5 here, that $13 million, is that what you're calling out as lost placement in contracts or is there more in that US/UK segment there, the $32 million decline?

That $13 million is obviously only the impact on Q3.

That's right, but I'm just trying to get a trend here. I'm trying to figure out where the -- if you're still losing share and you're going to continue losing share and you're raising prices in that environment, I'm just trying to figure how you're going to recapture share.

Service has been our big issue which drove a lot of our share issues. We don't believe we're uncompetitive in terms of trying to pass on raw materials. We think that we're uncompetitive in terms of the service offer that we provide for our customers. And we've seen that come through in Europe as we fixed service model there, Europe is further ahead than the US. We moved quicker there in terms of putting our things together.

And a lot of a business in our industry flows on annual contracts. And so we came into 2008 having lost share. And obviously in 2009 a lot of that share is decided in the fourth quarter of 2008 and into the first few weeks of 2009 and we're in the middle of that process right now.

And can you quantify what the supply chain impact was in the third quarter at this (multiple speakers)?

It's very hard to say what is the supply chain impact as such. What I would tell you is that all of our customers tell us our service isn't good enough and so obviously that's something you have to fix in order to be able to take share and we've been very focused on fixing that. And obviously until your customers see you having fixed it for a sustained period of time they're not going to say you fixed it. And so, we have improved our service dramatically in the third quarter, but we have to still be doing out on a consistent basis.

So are we six months away from -- 12 months away from being fixed or what sort of timeline can you give us on that?

Fixing supply chain issues isn't a flip of a switch kind of thing, it's a systemic process improvement. And I think our customers will see that throughout 2009. My expectation is that sometime in the first half of 2009 we can get to the service levels that they expect of us. I guess I'm saying it's a six- to nine-month process.

Okay, great. Thank you very much.

Peter [Arit], Investco.

Good morning. With the goal of deleveraging and trying to stay within covenants, have you looked at buying any bonds back yet?

You will see we did that in the second quarter and we did that in the third quarter.

You did do that for third quarter?

We look at our cash position and we will take decisions as and when we think it is the right use of cash.

You mentioned that you did buy some bonds in the third quarter?

A very small amount, and you will see that when we file our 10-Q later today or early tomorrow.

So it is something you are able to do under the bank deal and something that you're actively taking a look at? Obviously, if you can buy bonds back at $0.60 on $1, that's a pretty powerful form of deleveraging.

I recognize that.

Okay, good. Thanks.

There are no further questions at this time.

Thank you, everybody. We appreciate both your time and your interest. I would like to leave you with just a couple of perspectives. I'm excited about being here. I honestly believe in the future of this business. I think I inherited a very strong senior management team. I believe we can take market share. I believe we will continue to generate strong cash flows.

I think the restructuring that we have done is going to benefit us going forward. And as we spoke earlier in the call, I do believe our pan-European model will serve us very, very well in these tough recessionary times. So thanks again for your time and interest, and I look forward to meeting with all of you.

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the presentation, and you may now disconnect. Have a good day.