塞拉尼斯 (CE) 2014 Q3 法說會逐字稿

Good morning and welcome to the Celanese third-quarter 2014 earnings conference call. (

Operator Instructions)

Please note, this event is being recorded. I would now like to turn the conference over to Jon Puckett. Please go ahead, sir

Thanks Laura. Welcome to the Celanese Corporation third-quarter 2014 conference call. My name is Jon Puckett, Vice President of Investor Relations. With me today are Mark Rohr, Chairman and Chief Executive Officer; and Chris Jensen, Senior Vice President of Finance.

The Celanese Corporation third-quarter 2014 earnings release was distributed by business wire yesterday after market close. The slides for the call and our prepared comments for the quarter were also posted on our website, www.Celanese.com in the investor relations section. As a reminder, some of the material, some of the matters discussed today, and including our presentations, may include forward-looking statements concerning, for example, Celanese Corporation's future objectives and results. Please note the cautionary language contained in the posted slides, also some of the matters discussed and presented, include references to non-GAAP financial measures. Explanations of these measures and reconciliations to the comparable GAAP measures are included on our website in the investor relations section under financial information. The earnings release non-GAAP reconciliation's presentation and prepared comments have been submitted to the SEC and a current report on form 8K.

This morning we will begin with introductory comments from Mark Rohr and then we will field your questions. I would now it turn the call over to Mark.

Thanks, Jon, and good morning, everyone. Our prepared remarks were released with the earnings so keep my comments brief and then open the line for your questions.

With had a really strong quarter with adjusted earnings of $1.61 per share, the highest in our history. Segment income margin expanded 300 basis points year over year, driven by higher pricing in consumer specialties, industrial specialties, and acetyl intermediates, which more than offset higher raw material costs. On a sequential basis, segment income margin expanded 150 basis points primarily due to higher pricing in industrial specialties and acetyl intermediates.

These results drove record operating cash flow of $379 million and free cash flow of $227 million, facilitating the return of $139 million to shareholders and $39 million in dividends and $98 million in share repurchases. These are really great results and should help us deliver 2014 adjusted earnings that range from $5.55 to $5.65 per share, or 23% to 26% growth over last year.

We also made significant progress in our methanol unit in Clear Lake, Texas, and have provided you with our action plan to offset headwinds as we move from purchased to self-produced methanol.

Looking at the year ahead, we believe the customer focused approach, and our materials business, and commercial actions in our technology-enabled businesses, will provide us appropriate opportunities to meet the challenges in 2015; like potential softness in the global economies, fewer industrial outages and stronger dollar versus the euro. For 2015, our objectives are to deliver adjusted earnings that are consistent with our expected range for 2014.

With that, I'll now turn it over to Jon for Q&A.

Thanks, Mark. Laura, we'll open up for questions. I'd like to just ask everybody to keep it to one question and one follow-up. So, Laura, go ahead.

(Operator Instructions)

David Begleiter, Deutsche Bank.

Thank you. Good morning. Mark, just in a AI, how are you thinking about the level of over-earning in the segment in Q3? And what's sustainable going forward into Q4 and in 2015?

David, I've commented on that in the last couple of calls. I guess what I will say is that clearly the industry has reset to some degree. By that, I mean that there has been some material changes in trade flows around the world. Product is generally tighter than it was in the past. And there is more discipline in the market, particularly in China, than we've seen historically. So, there is a portion of this that won't be recurring. But, to be honest, we're not really going to have good sense on that until we get into next year.

Fair enough. And just, in acetate tow in China, any more thoughts on whether this business is plateauing there or peaking or is in a long slow decline, demand-wise?

Well, I think we -- if you look at it from a volumetric basis, David, we certainly believe that the business is generally peaking volumetricly. And we saw a step down in China earlier this year that -- it's not recovered from that. So, we maintain this volume at this lower rate.

I'm a little concerned about the overall Chinese economy because you see a lot of the cigarette purchases, or the second-tier brands that go to everyday men and women, and right now those folks are struggling a bit. But right now, our view is, is that we are where we are, and we're going to be at this level for some time.

Rolling that back around, we do think there's excessive inventory in a few spots around the world, and we're trying to assess if some of that inventory comes off, what the impact would be before that. But you should not take that, if it occurs, as being indications there's been further drop in volume consumption.

Thank you very much.

Thanks, David. Laura, let's move to the next question.

Laurence Alexander, Jefferies.

Good morning. I guess, first, the $0.15 to $0.20 in restructuring savings that you flag -- is that a year-end run rate? And if not, what would that be?

Are you referring to restructuring when we talk about the -- oh, the pan-European. Is that what you mean specifically?

Correct. So, is that just a tailwind in 2015, or is that an exit-of-the-year run rate going forward?

Yes, I'm sorry, I handed that to Chris, David -- I mean, Laurence. I thought you were referring to the capital structure.

You should look at that as the impact for next year. And the run rate going forward, I would hope, would creep a little bit higher than that. That's how you should look at that.

Okay. And secondly, as you look at the outages that you're anticipating for next year, how would those compare to this year?

Corporately, we're about the same. And the comment I made -- the generic comment I made on outages is that there were a number of, particularly in the C1 chemistry arena, unscheduled or unplanned outages this year. And I would expect there would be fewer of those next year. And I can't predict what that is. But I would expect the industry operates more reliably next year than it has this year.

Okay, thank you.

Thanks, Laurence. Laura, let's move to the next.

John McNulty, Credit Suisse.

Good morning. Thanks for taking my question. So, when you gave color on your outlook for 2015, you highlighted a bunch of puts and takes. And I guess I'm wondering: When you are thinking about the growth for AEM and consumer, how are you thinking about that in terms of the growth rates in 2015? And how much of that will come from what you highlighted around the customer-centric approach and some of the technology offerings that you're offering versus just general market demand?

I think when you look at general market demand -- I'm going to talk more about the materials than I do consumer -- but we've had really a pretty good year of market growth this year, both in the US and in Europe. And next year, we think that will be moderated a bit.

Having said that, we have a lot of new products and a lot of new platforms that will start to come to fruition. So, we're expecting good growth in engineering materials year over year driven by new products we're putting in there. We expect good growth from our innovation products; things like the high-voltage transmission line that we talked to you guys about recently. So, we're seeing -- our view is pretty strong growth in the materials segment -- the year-over-year basis.

In the consumer side, we don't really see any volume growth in that business. We do see other opportunities, though, to incrementally squeeze a little bit of increased profitability out of that business as we enter into next year.

On the AI side, I think it's going to be -- I need a little bit more clarity on what the reset is before I can really answer that directly, but we have a lot of productivity-related initiatives there that will contribute to earnings growth in that business.

Great. Thanks very much for the color.

Thanks, John.

Next question, Laura.

PJ Juvekar, Citi.

Good morning. It's Eric Petrie in for PJ. If I could ask, what is the sensitivity to your $100-million purchased versus produced methanol if -- in 2015 -- if methanol prices stay closer to $400 per ton versus your $500- to $600-per-ton assumption?

When we talked about this being a $100-million range -- $75 million to $125 million -- in 2015, that is assuming methanol in a $500 to $550 range, and natural gas in a $4.25 to $5 range.

I might follow offline. (multiple speakers)

I was going to say, to answer your question, with the $75 million to $125 million -- at lower methanol, you ought to push down to the lower end of the range. But like we've said, we don't know where methanol is going to be when we step off of that contract. So, that's why we've given you the range of $75 million to $125 million.

Okay. So, you are saying $400 per ton would put you in that $75-million ballpark?

It puts you closer to that number than the $500 to $600 that we've assumed.

Okay. And then, just on a longer term, of the three industrial ethanol MOUs that you have outstanding, which do you expect to press quicker or have less regulatory hurdles to get to, to reach the market?

You said methanol or ethanol, Eric?

The industrial ethanol MOUs that you have in Indonesia, China, India.

Those are all fuel applications. And it's hard to probability weigh them. I think China has got the toughest row to hoe because you have to change -- you got to have a pretty broad approach to change fuel regulations within China. And so far, that process hasn't gained a lot of traction.

Indonesia was doing extremely well from a project point of view. It still seems to be endorsed by the government, and indications are the new government is also endorsing. But we need to go through that change in leadership in Indonesia, including the new CEO from Pertamina. And so, I think we will have a better sense of that in our January call.

India is just getting started. The economics are very good in India, and, in some ways, the decision-making process will be easy. So, I would say China is probably third, and it's too soon to tell which is more likely, India or Indonesia.

Okay. Thank you.

Thanks, Eric. Laura, let's go to the next question.

Frank Mitsch, Wells Fargo.

Good morning, and congratulations on the record quarter.

Thanks, Frank.

When you talked about 2015 and the productivity enhancement of $0.15 to $0.20, and you also mentioned that you have had some programs in place, where do you think those numbers would have been or will be for 2014? How much of the earnings improvement in 2014 would you ascribe to productivity enhancements?

On a big scale, we shuttered two facilities in 2013 that rolled into 2014. And I'm looking at Chris -- that was probably $0.20 or so kind of number, Frank, that rolled through -- something like that.

Probably $20 million to $30 million (multiple speaker)

Yes, in that. We always have some productivity, but to be very honest, I think this year was one of our weaker years in productivity. So, I don't think, other than those two -- those two outages are the ones that -- those two shutdowns are the ones that resonate with me.

That's very helpful. Can you give your sense of the status business over in Europe in particular? What you're seeing in the auto front, and more broadly, in the pace of activity over there?

Yes, I -- well, it's a great question. We all read the same press that you read. You can't help but get a little bit of concern about when you read it. But I think what we would say is that our customers generally are a lot calmer than the markets are.

We have seen Europe -- European auto slow down. We've seen companies like Ford take extended outages and push out some products. So, there is a reduction in consumption in the auto arena, certainly, in Europe right now.

The other businesses -- the other areas there, I'd say it's -- nobody is -- nothing is falling off the cliff, Frank. Business is moving along. There is some talk of -- we see some folks act like they are starting to consume and drop inventory of a view that the reduction in commodity prices will somehow ripple through. So, we may see, in this quarter, some destocking that's going on in Europe. And I would say also we're seeing some evidence of that in China, just based on commodity prices, I think, more than anything.

Sure. Thank you so much.

Thanks a lot.

Thanks, Frank. Laura, let's go to the next call.

Kevin McCarthy, Bank of America Merrill Lynch.

Good morning. Mark, I guess a question on consumer specialties: You proposed a price increase of 5% to 6% in mid-September. What has the customer reception been over the last five weeks or so? Also, what is your view on the raw material side there, going into 2015? I'm just trying to get a sense of what margins might do versus the volumetric peak that you referenced.

We're in the middle of that process now with our customers, so it's too early to call where we will end up on the pricing side. For us, raw materials, period to period, are pretty constant. There may be a little bit of drift down as we worked off some more expensive inventory year over year, but pretty constant. I think, from a margin point of view, I look at the margin as being reasonably flat in consumer year over year.

Okay. Great. Second question, if I may, on acetyl intermediates: You referenced the structural reset in Europe, and I think some of your materials overnight also referenced different outages. And I think within the last week or so, your principal western competitor declared force majeure [at whole] in the UK. If you take that into account, what are your thoughts on the 4Q profitability in that segment? Do you get, perhaps, an extension of the benefits with these ongoing industry outages?

I think there is probably a little bit of an extension in that. But we are seeing others take -- there is more aggressive action in China, and there's more destocking going, so I don't have a good handle on volumetric movements for the quarter. But I do expect our earnings period to period to be down materially in that segment.

All right. Thank you very much.

Thanks a lot.

Thanks, Kevin. Laura, let's go to the next.

Bob Koort, Goldman Sachs.

Thank you. Good morning. You mentioned the benefits from the pan-European and productivity initiatives. Can you talk about what the cost for that might be? And then also if you've made any headway in perhaps securing a fix or long-term gas contract for the Clear Lake plant?

Let me do the latter one first, then I'll turn over to Chris to talk about European structure. But we have started taking a few positions for that increment of gas in the fourth quarter. I don't know what percentage we are locked in now for that gas, but probably half of it we've probably locked so far -- or a third, Chris just told me. So, we're doing that as it makes sense at these kind of prices, Bob.

So, Chris, do you want to tackle the -- ?

Sure. Bob, there will be costs associated with that structuring going on in Europe. But as is typically the case when we have those kinds of transformational activities, that is the kind of stuff we typically run through the adjustments and take out when we present adjusted EBIT.

Okay. And you mentioned in the prepared remarks using up to 1 million tons of methanol in the US. Can you tell us the size of the contract, and confirm that it expires at the end of June next year -- at the Southern contract?

It is 1 million tons. In other words, we were contracted for that full amount, Bob.

Yes, up to.

Great, thank you.

Thanks, Bob. Laura, let's move to the next.

Vincent Andrews, Morgan Stanley.

Thanks very much. You guys had mentioned, I think on the last call when you were discussing what mitigants you might have to 2015 headwinds -- I think there was some discussion of maybe some tax optimization. But you didn't mention that today. I'm just curious if that's something that is still on the table, or did you look at that and there's really not a whole lot material to do there?

Vincent, this is Chris. When we talk about the structuring -- this pan-European structure that we're going through, that is part of what will happen there is potentially some tax savings that come from that. And what's really driving that though is the desire to have a centralized European management structure, similar to what we did a couple of years ago over in Asia.

So, prior to this point, we just -- we really didn't have that structure in place. We want that in place. This is an important region for us, and we want a team of leaders there who have a real pulse on what's going on in Europe, that can run this thing day to day. But to answer your question, there will be some tax savings that come as part of that.

But doesn't sound like it's a material change in the rate.

Our tax rate should go down next year. And as we get closer to completion on this structure, we can talk more about what it's going to mean to the tax rate. But it will go down. It should go down below 20% next year.

Okay. Thanks very much. I will pass it along.

Thanks, Vincent. Laura, let's go to the next.

Jeff Zekauskas, JPMorgan.

Hi. Good morning.

Good morning, Jeff.

I have a question about your slide 16. Your CapEx -- you said you are lowering by $50 million to $400 million to $450 million. Wasn't your CapEx through the first three quarters in the low-$400 millions, if you count the CapEx that goes to the new methanol plant?

Do you also -- yes, Chris, go ahead. But you do some netting on the CapEx that goes to the methanol plant because we get some of that reversed by the -- reimbursed by the joint venture. So, our initial look on CapEx for the year, Celanese CapEx, was $450 million to $500 million. And so, what we're saying now is that $450 million to $500 million really is more like $400 million to $450 million just because of some productivity measures and some other measures and some spend outside of methanol and outside of the gas boilers in Narrows.

I don't have all the numbers in front of me to add up those quarters. You can see that by taking a look in the filings that we'll put out shortly.

What I will tell you off the top of my head though is, yes, it's a little bit weighted in the fourth quarter. We're going to have a little more CapEx in the fourth quarter than we had in the third quarter. The third quarter was a little higher than what you saw in the first two quarters.

And when you go through that, make sure, as Jon said, you net what you see coming in from our JV partner in Mitsui. It's on a different line in those financials. But that is the range now. We're talking $400 million to $450 million for the year.

All right. Perhaps I can follow up with that.

Are you making money currently in Chinese ethanol? I think Chinese ethanol prices -- industrial ethanol -- prices per ton are somewhat over $1,000 a ton. Or is it more complicated than that? Does TCX not make -- ? (multiple speakers)

No, it's not any more complicated than that. It's hard to answer that question directly, but I will say: not in a material fashion, is how I would describe that. The business is just kind of bouncing along, Bob, and we've not found a way really to extract a lot of value out of the industrial ethanol market in China today.

Okay, good. Thank you so much.

Thanks, Jeff. Laura, let's go to the next question.

Hassan Ahmed, Alembic Global.

Hi, Mark. How are you?

Hello.

A question around AI as it relates to your 2015 guidance: If I take a look at EBITDA margins towards the end of 2013, they were running at 12%, 13%. And that's obviously prior to a variety of these outages. And today, they're closer to 20%. So, how should we think about what you're baking into 2015 guidance for this segment? Is today's margin profile more representative? Is end of last year's more representative or somewhere in between?

Yes, somewhere in between. And we're doing that math ourself, and trying to sort out -- there's -- no one should have any doubt that those margins will pull back to some degree. But I do want to be clear that that market is a bit different today. And there is more discipline in that market. So, we're trying to go through systematically and triangulate on what we believe a proper outlook for the year will be, and we just haven't got to that point yet.

What I will say is that where we do the range of potential step downs from where we are today, we're seeing opportunities to offset that. So, that's why it gives us some comfort to go out and say that even though you're going to have headwinds in methanol, and even though you're going to have headwinds from these sort of global economic scenarios that are out there, and you're going to have some headwinds as some of the tightness within the C1 chain slips away, we think we can overcome those things and end up, in essence, at that year-end view that we have today.

Fair enough. Moving on to the methanol plant, fairly recently a methanol MLP in the US talked about jacking up the debottlenecking costs or budget by around 30%, and caught them by surprise. If I read your comments rightly, you were talking about how things are quite tight on the [E&C] side of things but you're sticking to the original budget that you gave out. Now, what gives you confidence that there will not be any slippage there or any sort of uptick in that budget? Is it something in the contract or -- ?

No. No, there is no guarantees. I have confidence in the team and how we're running that. We have an unbelievably -- just a great team. We have great contractors. We're engaged daily on that activity. We're just all over the project.

We are a bit -- we -- how do we say that -- we're into it a bit sooner than others, and so we haven't suffered from skill shortage to date. We're now in the mechanical portion, which means you need a lot of welders, and that's the area that is most concerned from our point of view right now. And we have not only great contractors providing good people, but we have some backup should those fail.

I should let you know, though, it is a very close budget. We have -- we measure the gaps down to percentages. So, could we end up being a bit over? Sure we could. But if I can advance the day -- start-up day -- by a day or two, I will spend money to do that because the credit for shorting that period of time that we're fully on the market is just huge for our Company.

Fair enough. And with this sort of an E&C market, is that second methanol plant still looking feasible?

Yes. When you look at it, you can over-react or under-react, I guess, to situations. We certainly are looking at the current collapse in commodity pricing, and maybe ripple effects of that, and thinking our way through. But the folks we're talking to are still quite interested, and we will make a decision to a couple of candidates as we get into November. And we'd like to be in a position next spring to either have a project or not have a project.

And be mindful that even if we do it next spring, you are talking a long time. We still have -- even though we started the permitting process several months ago, that's probably an 18-month process now. This is a start-up that will occur quite a few years out.

Fair enough. Thanks so much, Mark.

Thank you.

Thanks, Hassan. Laura, let's move to the next question.

James Sheehan, SunTrust.

Thanks for taking my question. You've given a lot of color on the methanol headwind in North America. I was just wondering if you could comment on the acetic acid business in Asia, and where you see pricing going next year in lieu -- in light of the drop in crude oil prices globally? Do you see that as having an impact to your earnings in Asia? And do you have any leverage you can pull there in terms of your strategic changes to your business model that can offset that? How are you looking at the Asia market?

The Asia market margins throughout this year have been pretty good for those businesses. They're probably a little weaker today than they have been on average as we've gone through the year. Pricing has pulled back a little bit in China. So, we may see some margin compression as we go into next year in acetic acid.

But what I would say is that the margins are materially different than they were back in the 2012/2013 kind of time frame. As that market has changed, we've seen a step change there. So, I think our expectations are for a little bit of weakness in margins next year, Jim. That's how I couch that.

Be mindful in China that everything is coal based. Coal pricing has the floor, and it's been at that floor for a while. And it's methanol based, and methanol has the floor there, and it's been at that floor for a while. So, there is no change in manufacturing costs, I think, practically possible for Chinese producers.

Thank you very much.

Thanks, Jim. Laura, let's go to the next.

Edlain Rodriguez, UBS.

Thank you. Good morning, guys. Just one quick question on AEM: This business has a lot of exposure to Europe and to auto. If there is further slowdown in Europe -- can you talk about how this business is now better positioned than it was before, and how results will be more resilient than they were in previous challenging times that we've had in Europe?

Let me try. So, auto is about 40% of that business -- maybe 50% globally. And if you look at Europe, you've got to separate Germany from the rest of Europe. What's great about Germany is: They build a lot of the high-end vehicles that are purchased by all of us around the world. And those higher-end vehicles are big sinks for the kind of highly engineered materials that we sell. So, we are seeing our ability to penetrate those vehicles continue to grow. And so that gives us comfort that even as we fall to a anticipated lower builds in the Americas and lower builds in Europe, that we'll be okay.

If you look at Asia, we have fairly low penetration in Asia. We're having good success now starting that, so we think there's a lot of growth upside in Asia. So, my belief is we will have mid-single-digit growth in the auto segment in that business year over year.

And when you go beyond that, in industrial spaces and electronic spaces, consumer spaces, we have a lot of activity underway, and have seen some really good success with products. And I mentioned one example of that, which was the composite-based high-voltage wire that is starting to be strong in places like Houston, Texas. Getting rave reviews from utility companies because it lets them lower their cost. So, we have a view that things like that -- that's just one example -- will also come in to some degree and start to lift us up more, even if auto is a bit weak next year.

Okay. Thank you.

Thank you.

Thanks, Edlain. Let's move to the next question, Laura.

Nils Wallin, CLSA.

Good morning, and thanks for taking my question. In AEM, you've had some pretty powerful volume growth over the last six quarters or so, and yet prices have been down year over year for the last five. I attribute that to mix, but I'm wondering if there is any way to reverse that, or if next year the comps will get better on the pricing side in that business?

Part of it is mix, and part of it is Asia. Asia, generically, is a lower-priced market than some of the other parts of the world. And that's been a big thrust of ours to push into Asia.

Do I see that changing a lot year over year? No, I think it's going to be pretty constant year over year. What I do expect is that we can get more specification business and some of the higher-end applications that would offset any increased penetration we may make in Asia in terms of pricing. So, my gut is we will stay pretty constant.

Got it. That makes sense. And then just on the volume declines in consumer specialties, obviously I know that there is destocking going on so it's probably hard to get a sense of what the underlying volume levels are. But would you be able to quantify or give us some qualifications as to what you see the underlying demand in that business being?

We reported -- the data -- we belong to an association that collects data from all of the producers -- blind data, and produces or presents annual trends. And I don't have the annual trends. What I will say in the middle of the year, what it pushed an indication to is that we were down in the -- on the consumptive basis, in the 1% to 2% range kind of number. And the biggest revelation out of that was not new news because we had been talking about it, but it was a more steep falloff in China. China had always been a contributor in terms of volume growth, and this year they were going to be actually down year over year. So, that's the most contemporary data that we really have.

What I will say is: Talking to customers, what we feel is that we're in for a fairly flat consumptive view year over year. And the only wild card we have in there is inventory. And several years ago when the industry was very tight, I would say that the majority of the consumers had built surplus inventory, and it's pretty clear to me now that they've been working that off, and I think that's going to continue through the end of this year, maybe into early next year. And I just can't -- I would love to tell you -- Nils, I would love to tell you exactly where that is, but we don't know. We'll be able to give you more color in January.

Appreciate the color. Thanks very much.

Thank you.

Thanks, Nils. Laura, let's move to the next caller, and this will be the last question.

Mike Ritzenthaler, Piper Jaffray.

Yes, good morning. As a quick follow-up to a previous question about how the materials businesses might fill in for the difficult comps from the industry outages and FX impacts -- how much do you view it as a series of singles from things like Clarifoil and expanding Qorus versus driving auto penetration from 2 kilograms to, I don't know, 2.5 kilograms or whatever?

The history of that business had been a singles business, and we're trying to change that. Mike, we're trying to make it more what we call a translation business. So, we -- where we go in and have a success like with Clarifoil. And the reason I use that example -- we're not selling a lot of [clear film] in freezers today.

But when you look at the power of that technology and our ability to market it, we're taking successful products and moving them laterally in the marketplace. And so, that's what -- my personal belief is that's what the real growth is going to be in this industry. You see that a lot in auto in particular, where our penetration varies dramatically from model to model, manufacturer to manufacturer and region of the world to region of the world. And so, our ability to take a success from one part of the world and one particular car manufacturer to another is what I think is going to define our ability to dramatically grow this business in years to come.

Okay. Just real quickly, if I could sneak one last one in is, on -- obviously one of the positives here the last couple of quarters has been the impact of trade flows. I was wondering if there's a way to quantify the impact of currency in 4Q on those trade flows -- in AI, obviously.

I'm looking at Chris. What are the rules of thumb on currency, Chris, for us?

Yes. So, it is more than just the trade flows, right? So, if you look at what drives currency impacts in Celanese, a part of it is that business and the fact that we don't manufacture acetic acid or VAM in Europe. So, that's part of it, but you sell it in Europe. So, you get some currency there.

You get some currency in the engineered materials business, which is just a strong business for us in Europe, even though we have local manufacturing. So, when you have high margins, it just drops some currency impact to the bottom line. So, I don't know that we've provided rules of thumb in the past, but it's probably somewhere in the range of a [EUR0.01] change equating to $600,000, $700,000, $800,000 in a quarter.

Okay. All right, thanks, guys

Thanks, Mike. And thanks, Laura. We will be around for questions all day today. We appreciate your time this morning.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.