Fair Isaac Corp (FICO) 2017 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to the Fair Isaac Corporation Quarterly Earnings Call. (Operator Instructions) As a reminder, this conference is being recorded today, Wednesday, November 1, 2017. I would now like to turn the conference over to Mr. Steve Weber, Vice President, Investor Relations and Treasurer. Please go ahead.

Thank you, Colin. Good afternoon, and thank you for joining FICO's fourth quarter earnings call. I'm Steve Weber, Vice President of Investor Relations, and I'm joined today by our CEO, Will Lansing; and our CFO, Mike Pung.

Today, we issued a press release that describes financial results compared to the prior year. On this call, management will also discuss results in comparison to the prior quarter in order to facilitate understanding of the run rate of our business.

Certain statements made in this presentation may be characterized as forward-looking under the Private Securities Litigation Reform Act of 1995. Those statements involve many uncertainties that could cause actual results to differ materially.

Information concerning these uncertainties is contained in the company's filings with the SEC, in particular in the risk factors and forward-looking statements portions of such filings. Copies are available from the SEC, from the FICO website or from our Investor Relations team.

This call will also feature statements including certain non-GAAP financial measures. Please refer to the company's earnings release and Regulation G schedule issued today for a reconciliation of each of these non-GAAP financial measures to the most comparable GAAP measure.

The earnings release and the Regulation G schedule are available on the Investor Relations page of the company's website at fico.com or on the SEC's website at sec.gov. A replay of this webcast will be available through November 1, 2018.

And now I'll turn the call over to Will Lansing.

Thanks, Steve, and thank you, everyone, for joining us for our fourth quarter earnings call. I'll summarize our financial results for the quarter and full fiscal year and talk about the progress we've made this year on several fronts. Finally, I'll discuss the momentum we have going into 2018 and beyond.

In our fourth quarter, we reported revenues of $253 million, a record quarter for us and an increase of 7% over the same period last year. We delivered $40 million of GAAP net income and GAAP earnings of $1.25 per share, both up 25% from last year. And we delivered $53 million of non-GAAP net income and non-GAAP EPS of $1.65 per share, up 27% and 29%, respectively.

The revenue and earnings growth is particularly impressive given our transition to cloud-based revenues. The 6% full year revenue growth comes in spite of our cloud transition. We have moved to a cloud-first strategy in development, sales and delivery.

More and more, our customers are thinking cloud first when they look to us for help to analyze and automate their decisioning processes. We began to see this demand nearly 2 years ago on originations where the dominant ask was for an originations platform in the cloud. In the last fiscal year, that cloud preference has moved to collections and recovery, account management and fraud products as well.

We made the important strategic decision several years ago to cloud enable all of our technology, invest in our FICO Analytic Cloud and make our products available through public clouds like AWS. Because of this, we now have well over $100 million of pipeline for our cloud products. This is enabling us to significantly build our recurring revenue base, which will mean predictable profitable growth going forward.

For other software companies, this sometimes means a disruption of revenue and earnings models. Many software companies have seen this as they've shifted from on-premise to cloud solutions.

For FICO, this shift has had some impact on our revenue and margin growth, but it's been less dramatic for 2 reasons. First, our legacy revenue model incorporates a lot of recurring revenue. And second, our transition from license to cloud has been deliberately gradual.

In 2017, we still had $100 million of upfront license sales, but that number was actually lower than 2016 as we sold more deals on our recurring revenue model. The lower license sales were more than offset by an 8% increase in our transactional revenues. This is especially encouraging as most of our cloud bookings are recognized over several years, meaning we have more revenue to be recognized in future periods.

Of course, to effectively build long-term, repeatable cloud revenue, we need to book new deals. We've been able to accelerate our bookings over the last year, culminating this year in $146 million of new bookings, our largest quarter ever. In fact, this quarter bookings were up 82% over the same period last year, and our full year bookings were up 13% over fiscal year '16.

These numbers not only validate our product strategy, but they also give us better visibility into future revenue flows and give us the building blocks for steady, sustainable growth.

And perhaps most impressive about this quarter's bookings is the breadth of sales. We had 13 deals in the fourth quarter of $3 million or more and 29 for the fiscal year. That compares to the 10 we booked in all of 2016. And we're selling big deals in a variety of our product solutions. We had 10 different product lines in 2017 with deals larger than $3 million. The fact that we're booking more deals in more industry verticals with a variety of our products bodes well for us as we enter the new year.

As we pursue our cloud-first strategy, we continue to add more advanced analytics throughout our product offerings. We have deep expertise with analytics and machine learning and have had success with many of our established products. We now have opportunities to take our expertise into new areas of demand.

For instance, in anti-money laundering, the next level of innovation is in analytics. Most of the solutions available today are rules-based, but because of the sophisticated money laundering schemes, there's a necessity to attack the problem with much more sophisticated analytics. In this space, as well as others, we have a competitive advantage because there's demand for the very analytics in which we've invested for decades. This is at the very core of our Decision Management vision.

Last year, I discussed our innovation in cloud strategy and that we were seeing signs of acceptance in discussions with customers and prospective customers. A year later, we have solid evidence with newly-signed deals. We're still in the early stages of a new era for FICO, and we're excited to continue to execute on the vision.

In our Scores business, we had another very successful year. Scores were up 15% in the fourth quarter versus the prior year and were up 10% for the full year. We're driving growth in B2B, up 13% for the quarter and 9% for the year and in B2C up 17% for the quarter and 13% for the year.

The FICO Scores brand is as strong as it has ever been. Studies show that 90% of consumers recognize the FICO Score, and they are increasingly recognizing that the FICO Score is the score that lenders use.

We continue to find new opportunities to grow revenue in the consumer space. We've made great progress in adding content around the Scores with simulators, score ingredients, summary reports and monitoring. And we're delivering that content through affinity channels, resellers and education programs by enhanced Open Access content and expanding Open Access to DDA accounts. We look for continued growth in 2018 and beyond.

On the B2B side, we're leveraging our decades-long leadership as the score that lenders use to drive innovation and identify new opportunities. We're investing in various financial inclusion initiatives using alternative data and new approaches to bring more consumers into the traditional credit system around the world.

In the U.S., we just introduced FICO Score XD 2.0, which scores more than 26 million people who were previously unscorable and 72% of the previously unscorable applications coming in to lenders. We've been working in China, India and other markets and have made great progress on financial inclusion that will drive real revenue in 2018. And we continue to work on other initiatives to drive more value out of our incredible Scores asset.

As we look ahead to 2018, we'll continue to invest in areas of our business where we see the greatest growth potential, and we'll continue to invest in security. In fact, we're substantially increasing our spend in the security space and have added additional personnel and expertise, and we'll continue to make decisions with the interest of our shareholders in mind.

In fiscal '17, we generated a record $205 million in free cash flow, up 10% from the previous year. We deployed much of that in our share repurchase program, retiring 1.5 million shares. And we purchased an additional 252,000 shares in October, exhausting the current board authorization. We were able to bring basic shares outstanding below 30 million and today announced a new board authorization of an additional $250 million.

As I look at our business, I see many opportunities in many areas. We're conservative about committing to growth time lines, but I'm convinced we have the right products and the right people to execute on our vision. I'll talk more about our outlook for 2018, but first, I'll turn the call over to Mike for further financial details.

Thanks, Will, and good afternoon, everyone. Today, I'll emphasize 3 points in my comments. First, we delivered $253 million of revenue this quarter, up 7% over the same period last year and a total of $932 million for the year, up 6% from the prior year. Second, we delivered $40 million in net income this quarter. Net income for the full year was $128 million. Finally, we delivered $49 million of free cash flow in the quarter and $205 million for the fiscal year. We repurchased 1.5 million shares during the year or about 5% of our outstanding shares.

I'll begin by reviewing the results in each of our 3 reporting segments. Our Applications revenue were $150 million, up 12% from last quarter and up 1% versus the same period last year. Full year revenues for Applications were $553 million, up 4% from last year. The increase in revenue was driven from our recurring businesses, primarily our Originations Management cloud solutions, our Customer Communication Services and our compliance solutions.

In our Decision Management Software segment, revenues were $31 million, up 12% from last quarter and up 29% versus the same period last year. Full year DMS revenues were $113 million, up 5% from last year. DMS bookings were $22 million this quarter, up 44% from the previous year. And our full year DMS bookings were $92 million, up 32% from last year.

Finally, in our Scores segment, revenues were a record $72 million, up 4% from last quarter and 15% from the same period last year. B2B was up 13% over the same period last year driven by strong consumer lending, and B2C revenues were up 17% from the same period last year. For the full year, Scores revenues were $266 million, up 10% from last year.

Looking at our revenue by region, this quarter 71% of total revenue were derived from our Americas region. Our EMEA region generated 20%, and the remaining 9% was from Asia Pacific. Recurring revenues derived from transactional and maintenance sources for the quarter represented 68% of total revenue. Consulting and implementation revenues were 20% of total, and license revenues were 12% of total. For the full year, 70% of our revenues were recurring compared to 69% last year. Our cloud revenue topped $200 million for the year.

We generated $24 million of current period revenue on record bookings of $146 million, which is a 16% yield. There were no large whales driving this result. The weighted average term for our bookings was 29 months this quarter. And for the full year bookings were $429 million, up 13% from the prior year. Our cloud bookings topped $100 million for the year.

Our operating expenses totaled $192 million this quarter, up $3 million from the prior quarter. The increase relates primarily to variable expenses associated with increased revenue in the largest booking quarter in company history, offset by the restructuring charge we had last quarter. As you can see on our Reg G schedule, non-GAAP operating margin was 32% this quarter and 27% for the year. We expect that operating margin will be somewhere between 26.5% to 28.5% in fiscal 2018.

GAAP net income for the quarter was $40 million, up 25% from the prior year. We had a reduction to income tax expense of about $1.2 million or $0.04 a share associated with the excess tax benefits we've been discussing. Our non-GAAP net income was $53 million for the quarter, up 27% from the same quarter last year.

For the full year, net income was $128 million, which included $25 million in reduced tax expense from excess tax benefits, and non-GAAP net income was $158 million. The effective tax rate for the full year was 15% after adjusting for the excess tax benefit, and the effective rate was about 31.6%, slightly higher than what we guided for the full year due to increased profits in higher tax jurisdictions.

Free cash flow for the quarter was $49 million compared to $22 million last year. For the full year, free cash flow was $205 million compared to $186 million last year.

Looking at the balance sheet, we had $106 million in cash on the balance sheet. This is down $25 million from last quarter due to debt reduction and share repurchases, partially offset by the cash we generated. Our total debt is now $605 million with a weighted average interest rate of 4%. And our ratio of total net debt to adjusted EBITDA is 2x, which is below the covenant level of 3x.

We bought back 520,000 shares in the fourth quarter at an average price of $139.94. In fiscal 2017, we repurchased a total of 1.5 million shares at an average price of $131.82 for a total of about $193 million.

We continued in the month of October repurchasing an additional 252,000 shares at an average price of $145.20. Those repurchases exhausted the board authorization, and we today announced a new $250 million authorization.

We continue to view share repurchases as an attractive use of cash. And we continue to actively evaluate opportunities to acquire relevant technologies and products that advance our strategy or strengthen our portfolio or competitive position.

With that, I'll turn it over to Will for his final thoughts.

As I said in my opening remarks, I believe we have significant momentum as we move into 2018. Our FICO Score brand is stronger than ever. We have significant opportunities in both the Scores B2C and B2B markets.

On the software side, we'll continue to pursue our DMS strategy. It's the core of our R&D efforts and the core of how we're going to market. We continue to make progress, release new innovation and most importantly, book new business.

We're diversifying beyond financial institutions. We're making progress in telco, auto and a number of other verticals. We're still a trusted partner to our financial services clients, but now we also have so many opportunities in other industries.

And we're continuing our cloud-first strategy. I believe 2018 will be the biggest cloud year for FICO ever. We've gone beyond making our products cloud ready. We're now designing with a view of cloud first as we're seeing more demand from both our existing and prospective customers. Our strong bookings in fiscal '17 give us confidence that as we move into 2018, we're building predictable, reliable backlog that will deliver recurring revenue well into the future.

With all this in mind, we're providing the following guidance for fiscal '18. We're guiding revenues of approximately $990 million, an increase of about 6% versus fiscal '17. We are guiding GAAP net income of approximately $139 million, up 9% over 2017. We expect an excess tax benefit of $20 million in fiscal '18 compared to $25 million in fiscal '17, GAAP earnings per share of approximately $4.33, non-GAAP net income of $171 million and non-GAAP EPS of $5.32.

I'll now turn the call back to Steve for Q&A.

Thanks, Will. This concludes our prepared remarks, and we will now take questions. Colin, please open the lines.

(Operator Instructions) Our first question comes from the line of Manav Patnaik with Barclays.

My first question is just around your top line guidance of $990 million or 6% growth. Can you maybe walk us through your -- or give us some high-level guidance around the assumptions by the different segments?

Yes, I'd be happy to, Manav. This is Mike. We're building our $990 million, I would say, as follows. In our software businesses, we're building an assumption in for Applications of roughly mid-single-digit growing, something very comparable to what we did this year.

We're building our guidance around our DMS business in the double-digit range, slightly ahead of what we did this year. And our total Scores business we have built into roughly mid-single-digit range with relatively flat on the B2B side and high single-digit growth on the B2C side.

Okay. And then maybe just honing in on the B2C side, because I know on the B2B you always do flat, which is conservative. But I guess the 17% growth this quarter for B2C, I mean, should we be thinking of that as the right run rate?

Or maybe asked differently actually, like, was the growth there driven -- any incremental drivers from the lead gen business that you started partnering with Experian? Or is this still just the legacy base contract you had with them?

No, this is the legacy business that we've had that was very little from the lead gen. It's starting to kick up, but frankly, very immaterial at this point. The timing of how quickly the lead gen business ramps up is still uncertain for us and is tied to the marketing efforts at Experian.

And so we've taken a pretty cautious approach to how we build that into these numbers that I'm providing. And so what you're looking at is the run rate with some of the deals that we described with respect to affinity and several others beginning to go online.

Okay. And then on the cost side, could you maybe call out maybe the major of buckets of investment? You're guiding to basically another flat margin year. Just curious what the main areas there for -- I know Will called out cyber, but anything else?

No, I would say what we're seeing certainly in the fourth quarter and what we see in the pipeline for next year is a pretty significant amount of cloud deals. In fact, in the fourth quarter, we had $146 million of bookings. And not quite, but almost half of that, were cloud deals. And that $60 million to $70 million of cloud bookings in our quarter 4 are going to be implemented throughout the earlier and the middle part of 2018. And that requires people, it requires costs and revenue obviously follows that thereafter.

So I would say the mix, because of our fourth quarter bookings, is probably a factor in our margins certainly in the first part of next year. And in addition, we've -- as Will mentioned, we put some extra money aside, probably above and beyond what we had done in the past for security and infrastructure in order to build the walls further in terms of our data security and protection.

Okay. And on that, again, maybe just my last question, any broad thoughts on if the Equifax breach has or had any impact to your business?

No. It really hasn't had any impact to our business. Of course, like everyone, we do a gut check and we take a deep look at ourselves to think about whether we're vulnerable and whether we're doing everything that we can to be secure. And frankly, it was a bit of an impetus for us to increase our budget for our own security. And we were feeling pretty good before and we thought why not feel a little bit better, and that's why we put the extra investment in.

(Operator Instructions) Our next question comes from the line of Matthew Galinko with Sidoti.

So I guess just a point of clarification. In terms of increased investment in cybersecurity, is that internal use? Or is that also including building out your products?

The increase in investment that we were referencing was internal use. Now that said, we are also increasing the R&D in our cyber products because they're starting to get a little bit of traction. So things like the Enterprise Security Score is now up and available. And so yes, there's definitely investment that's going in there, also on the distribution side for that score.

Got you. All right. And then in terms of the cloud first and just traction you're getting in the cloud, is it coming more from kind of the nontraditional verticals you outlined? Or is it really broad-based?

I would say that last year, 2016 and even the beginning of 2017, as expected, the appetite for cloud was in the nonfinancial services verticals initially and we expected that. And so we were seeing appetite in telecom and in other verticals.

This year we've started to see the demand in financial services as well, which for us is a really welcome sign. We always expected this to occur. We never knew what time frame we'd see our customers moving to the cloud in, and to see it actually happening is extremely encouraging. So I would say now it's across the board. It's not just the nonfinancial services verticals.

Our next question comes from the line of Brett Huff with Stephens.

This is Blake on for Brett. Just wondering if you could talk a little bit more about the very strong bookings. I know you said about half are cloud, and you said there were no whales in there. So should we assume this is -- how should we think about the run rate for 2018 with such a large increase this quarter? And then maybe, are these taking a little longer on average to implement given the revenue growth of 6% would maybe imply these hitting the P&L next year?

Well, so we don't really give guidance on bookings. But I think if you were to extrapolate from this quarter and annualize it, you wouldn't be far off and that wouldn't be too optimistic an assumption.

We really are feeling very strong about the trend in bookings, and we're at a point now where we've made some efforts to really make our salespeople neutral on doing cloud deals versus upfront license deals. We really want to do what the customer wants. And so there's no -- much as we love revenue, we do not have a bias in the system towards revenue.

And so what's happening is through a combination of being evenhanded in the way we incent our salespeople coupled with genuine demand from the marketplace, we're really seeing that strong cloud appetite and we expect that to only increase. And yes, we absolutely expect that to be reflected in bookings.

And it is at the expense of upfront revenue. There's clearly a difference, and I think our revenue run rate would be different and higher if we weren't doing as much cloud business as we are. But we're quite comfortable with that.

All right. And then on the margins, I know you talked about your investments a little bit. And last quarter you had talked about going through the decision of how much to expand margins this year. Can you just elaborate a little more on that decision for the 26.5% to 28.5% margin? I guess it's a fairly wide range. What are the drivers of that uncertainty right now?

Well, I think if you take a step back and you look at the broad strategic direction for our business, we've gone from -- we're in the midst of this transformation from a license revenue business to a cloud business. And initially, if you go back 3 years, it took the form of cloud enabling our products, making our products available in the cloud.

And what that really meant was we put -- we took our license revenue products and we installed them in our own data centers and made them available on a hosted basis to our customers and we called that cloud. And it is cloud. But that's not the SaaS business, that's not the multi-tenant, highly configurable, standardized, high returns to scale cloud business that we all love.

And so over the last couple of years and especially this year and especially going into next year, we're making tremendous investments in not just the infrastructure. The infrastructure is a part of it, making sure that we have the infrastructure to support it.

But also the products themselves, rebuilding, retooling reengineering the products so that they can be more standardized and highly configurable, which we think is going to reduce the time to go live, reduce the cost of operation, shorten up the implementation times and generally be a hit with our customers. And that's really where the investment is going.

And so we're -- I won't say we're sparing no expense because we still are mindful of making our commitments. But we are -- we're very focused on positioning the software business for a future cloud business with much more standardized, highly configurable, scalable products. That's where the investment is going.

All right. That's helpful. And then last one for me would be the FICO Score XD sounds like a good opportunity over time. Any more color you can give on the timing and the size of that revenue growth opportunity? And then where do you -- how much competition do you see for that since that's kind of a newer market? Do you think you could take a dominant position in that?

So it's not meaningful revenue today, and we have not yet announced any big partners who've gone to production with it, but this is definitely the year in which partners will go public with it. It's been in test for quite some time with good results, and so we should be in a position to announce some big partnerships shortly. We're -- it is our proprietary score. We do it with -- in conjunction with Equifax and the NCTUE data and LexisNexis, and there's -- it's not easily replicable by others.

Now there's a lot of efforts in the market to score the unscorable, to use alternative data to score populations that are -- have hitherto been difficult to score. But this one has been in development for years and is really robust, really does the job, scores new people, is highly predictive. And from the standpoint of lenders, it's going to result in new business for lenders that they otherwise wouldn't have had.

And so it's a pretty strong value proposition. We feel pretty good about it. How big will it be in 2018? I don't know that it will be tremendously meaningful. It all depends on kind of how quickly the lenders ramp up with it.

Our next question comes from the line of Bill Warmington with Wells Fargo.

So I wanted to start out by asking about the enterprise education programs that you'd announced last quarter. You mentioned you had 2 large clients that had signed up for those. Are those starting to ramp? Are we seeing some of the benefit in this quarter? Are there any additional takers in the pipeline?

They are starting to ramp, and there are additional takers in the pipeline.

It's part of what drove the quarter 4 growth in the B2C, Bill.

Got it. Okay. And then on the Enterprise Security Score, last quarter you talked about having your first large 7-figure deal for that health care IT reseller. It doesn't seem like that's much revenue for you now. How has demand been for that product? It would seem post-Equifax breach that, that would be a source of -- a product with a lot of demand, but I just wanted to see if you're actually seeing that.

We're just starting to see it. So we've gotten 3 deals. There's no question that the product does what it's supposed to do and it's -- I don't want to say it's totally unique in the marketplace, but it's a highly credible offering. There's no reason why we couldn't dominate that market.

I do think that it's -- this is a first mover kind of a situation. I think it's important for us to invest in it right now to kind of build the franchise, and it will be a scramble over the next 24 months to distinguish our score from some of the competitors out there.

I think we have -- from a predictive standpoint, we have a product that really works and we understand scores and how to make sure that the score means something. And we have the brand trust. We have to work on the sales and the distribution to make sure that it gets out there ahead of some of the competition.

Again, we're nearly a $1 billion revenue business, and so it's not going to be a tremendously meaningful dent in 2018. But does it have long-term potential as a very strong franchise? It does.

And speaking of the Equifax breach, TransUnion had mentioned on their call that they saw a bit of a spike in business in September following the breach. Did you guys see any benefit from that? And if so, did it continue? Or what are your thoughts there?

We saw a little bit in myFICO. The activity in myFICO was a little bit up. But as you know, that's a very small part of our business, so it doesn't have a meaningful impact.

Yes, good point. I wanted to go back to the margin guidance that you guys have and the -- I wanted to -- you've given color on the -- on some of the different drivers on the expense side that are causing the margins to be down on a year-over-year basis. And I thought it would be helpful if maybe you could give some additional quantification of that, meaning you could talk about how 100 basis points is coming from X, 150 basis points coming from this, if you could give that kind of insight.

Sure, Bill. This is Mike. That's a good question. There's close to 100 basis points of margin incremental going -- expense going into the company that relates to the IT security that we described earlier. So absent that additional investment above and beyond what we've been doing, call it, 50 to 100 basis points higher in terms of the margin in terms of the guidelines that we gave you.

The bigger driver though, frankly, and the reason why there's such a large range, 26.5% to 28.5%, is really the same reason that we had in fiscal '17, which is if our mix of business continues to be very heavily kind of oriented or dominated by cloud business, it takes money to put that business in place and get it up and running before the revenue begins to flow.

And despite the fact that we had such a large booking year in cloud, probably bigger than we expected, we still kind of landed in the middle of the guidance we gave in '17. We guided 26 to 28, and we delivered just over 27. So it's really the same reasons that are driving the larger size of the range. And then on the margin, there's maybe 50 basis points here and there for some things that are just prudent considering what's happening in the environment around us.

Another question for you on the debt structure. You have some relatively high-priced debt coming to maturity. In the past you've talked about the pros and cons of potentially prepaying some of that. Maybe you could review for us where we are in that, how much is refinancing, what the delta is versus current rates.

Yes, I'd be happy to. So in our notes, these are tied up in our insurance notes, we have about $240-ish million in insurance notes that are sitting on the balance sheet right now. About $130 million of that matures in May, and that has over a 7% coupon on it.

And so we're going to off-board that 7% coupon in May, and it'll get replaced by either our revolver, which is in the 2% to 2.5% rate, or it will end up in some other form of refinancing, which is quite possible by the time May comes. The next year after that, we have $28 million due and the rates are somewhere in the 6% to 6.5% range. I don't remember the exact number.

And then the final coupon of $85 million is due in 2020. That one still has a relatively large make whole on it, and so we're just going to let that one probably sit where it is rather than incur the penalty on the make whole. But it's only $85 million out of $600 million.

So we're going to take care of a big chunk of this, I think, in May. And we're in the process of thinking through and looking at the best foot forward on that. We ought to see a little bit of improvement on interest -- our interest rate as a result.

Got it. So final question, I just wanted to ask about essentially the Chinese FICO Score. You guys had made some progress in terms of helping to develop a score in China and then also helping to develop a score for the unbanked population in China, let's see if we could get an update on that.

Yes, so it's moving along actually quite well. It isn't really tipping the needle in terms of the big picture, but it's helping push that B2B growth to the levels that it has been. We're not quite generating 7 figures yet. But next year, we should be well over 7 figures of revenue, at least if the momentum that we see right now continues through the year. So we might have a couple of million dollar product in China under current rate and pace, and we're working hard to see if we can improve on that. But it's moving along actually quite well in a country where things don't move very fast.

And Mr. Weber, there appear to be no further questions on the phone lines. I'll now turn the call back to you. You may continue with your presentation or closing remarks.

Thank you. This concludes today's call. Thank you all for joining.

And ladies and gentlemen, that does conclude the call for today. Thank you all for your participation. You may now disconnect your lines.