Forrester Research Inc (FORR) 2007 Q4 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the quarter four and full year 2007 Forrester Research earnings conference call. m I will be your coordinator for today. At this time all participants are in listen-only mode. We will be facilitating a question and answer session towards the end of today's conference. (OPERATOR INSTRUCTIONS) As a reminder this conference is being recorded for replay purposes.

Before we begin, the Company has asked me to read the following statement. Today's presentation by management contains forward-looking statements within the meanings of the Securities and Exchange Act of 1934. These forward-looking statements represent the Company's present expectations or beliefs concerning future events. The Company cautions that such statements are necessarily based on certain assumptions which are subject to risks and uncertainties which could cause actual results to differ materially from those indicated today. These risk factors include changes in general economic conditions, recent geopolitical events, increased competition, work stoppage, slowdowns, exchange rate fluctuations, variations in the mix of products sold, fluctuations in effective tax rates resulting from shifts in sources of income, and the ability to successfully integrate and operate acquired businesses. Further information on these risk factors is included in the Company's filings with the Securities & Exchange Commission.

I would now like to turn the presentation over to your host for today's conference, Mr. Mike Doyle. Please proceed.

Thanks. Good morning, and thank you for joining our fourth quarter 2007 call. With me today are George Colony, Forrester's Chairman of the Board and Chief Executive Officer; and Charles Rutstein, Forrester's Chief Operating Officer. I will open the call and provide detail on our financial results for the quarter. George will follow me and provide a strategic update on the business and our roll-based strategy. After George completes his review, we will open up the call to Q&A. As Michelle mentioned, a replay of this call will be available until February 20, and can be accessed by dialing 888-286-8010. Please reference pass code number 80945093. This call is also available via webcast and will be archived in the investors section at Forrester.com. I will remind you of the cautionary warning in the forward-looking statements that Michelle provided at the beginning of this call.

I will now begin my review of the financial performance for Forrester's fourth quarter and full-year results, the balance sheet at December 31, our fourth quarter and full year metrics, and the outlook for our business in 2008. But before I get started with the details, I would like to comment on a couple of important items I highlighted in our third quarter call regarding Forrester's 2007 objectives. When we started 2007 Forrester established three major objectives. First, complete the option investigation and restate the financial results. Second, move the Company to a roll-based strategy to enhance our client experience. And finally, deliver 2007 revenues in the range of 207 million to 212 million, pro forma operating margin in the range of 16.5 to 17.5%, and pro forma diluted earnings per share of between $1.02 and $1.06.

As I mentioned on the third quarter call we completed the options investigation and filed our restated financials. We're making good progress on role-based strategy which George will talk about in greater detail in a few minutes. With today's release, we are reporting full year 2007 revenue and margin at the upper end of guidance at 212 million in revenue and 17.4% in pro forma operating margin. In our third quarter call we raised our targeted pro forma diluted EPS range from $1.02 to $1.06 up to $1.09 to $1.12. Our actual performance for the year is $1.16, well ahead of both our original examine revised guidance. Overall 2007 was a successful year. We achieved much of what we set out to accomplish, delivering a strong financial performance, and making excellent progress on our role-based strategy. 2007 also highlighted the need for continued focus on growing our syndicated business which, while growing at double-digit rates fell somewhat short of our expectations.

Now let me turn to the fourth quarter results. Please note that the income statement numbers I am reporting are pro forma and exclude the following items. Amortization of intangibles of $254,000, noncash stock-based compensation expense of $2.6 million, costs related to the stock option investigation and restatement of the Company's historical financial statements of $1 million, and net gains from securities and nonmarketable investments of $671,000. Also, we continue to book an effective tax rate at 39% for pro forma purposes. The actual effective tax rate for 2007 is approximately 37%. Forrester's fourth quarter revenue increased 19% to $58.4 million from $48.9 million in the fourth quarter of last year. Net income increased 17% to $8.7 million and earnings per share was up 19% to $0.37 on diluted weighted average shares outstanding of 23.7 million compared with net income of $7.4 million and earnings per share of $0.31 on 23.8 million weighted average shares outstanding in the fourth quarter of last year.

Our fourth quarter research services revenue increased 14% to $34.8 million from $30.6 million last year. Research services revenue comprised 60% of total revenue for the quarter. Fourth quarter advisory services and other revenue increased 28% to $23.6 million from $18.4 million in the fourth quarter of 2006 and represented 40% of total revenue for the quarter. The increase in advisory services and other revenue is primarily due to continued demand for our advisory services. For the year ending December 31, 2007, advisory services and other revenue constituted 38% of total revenues, up from 37% of total revenues during 2006. Our research services revenue totaled 62% of total revenue, down from 63% in 2006. This percentage of syndicated business which we call Q is an important driver of our profitability.

We are targeting to accelerate the growth of our syndicated business in 2008 in order to increase that percentage of our total business. We have made the transition to roles, launched FLBs, and changed our sales compensation structure to achieve this and are beginning to see the impact. However, due to our revenue recognition model, we expect full year 2008 research revenues to compromise -- or comprise 61 to 62% of our total revenues, but we should see improvement beginning in the second half of 2008 and into 2009. International revenues were 29% for the fourth quarter compared to 29% in the fourth quarter last year. International revenues represented 29% of the total revenues for 2007 which again is flat to year ago.

I would now like to review progress for each of our products starting with research. In the fourth quarter 533 new research documents were added to RoleView. 55,187 clients have now chosen a role. We hosted 88 teleconferences in the fourth quarter with a total attendance of 4,261 participants. All 17 roles were represented.

Forrester leadership boards, our peer offering for senior executives continues to perform well. The five boards focused on IT roles now have a total of 705 members. Technology industry boards include the analyst relations and technology marketing councils with a total membership of 287. Finally, the marketing and strategy boards which include the CMO group, the database marketing council, and the interactive marketing council now has a total membership of 191. At the end of the fourth quarter, the Forrester leadership boards had 1,183 members. The FLB business achieved revenue growth of 72% in 2007.

In our data business we continued to add an impressive list of clients. The North American Consumer Technographics business added or renewed renewed 91 1B plus companies including Fidelity, Verizon, Blockbuster and Best Buy. European Consumer Technographics added or renewed 18 1B plus companies including Cannon Europe, Deloitte, TSB, and Barclay's Bank. In the Hispanic Consumer Technographics added three new clients for a total of 30 including Freddie Mac and Chrysler Financial.

In our consulting business demand for our consulting services remained robust in the fourth quarter growing 28% year-over-year. Consulting projects for the IT roles in Q4 centered on IT planning, vendor sourcing, and securities strategy. For marketing and strategy roles, primary consulting topics were E-business strategy for E-business professionals, interactive marketing for interactive marketing professionals, and website transformation for customer experience professionals. For technology industry roles projects centered on total economic impact studies, market assessments, and market segmentations. Our events business continues to be strong with substantial growth in both sponsorship and attendee sales. We hosted two IT and three marketing and strategy role-based events in the fourth quarter. The marketing and strategy roles at the consumer forum in North America, the consumer to marketing forum for EMEA, and financial services forum for EMEA. For the IT roles, services and sourcing forum in North America, and services and sourcing forum for EMEA. In the first quarter of 2008 we will be hosting a new IT role-based event, enterprise architecture.

Let me review Q4 expenses and operating income. Operating expenses for the fourth quarter were $46.3 million, up 19% from $38.9 million in the fourth quarter of last year. The operating expense increase was primarily driven by higher net headcount in both sales and research. Operating income was $12.1 million or 21% of revenue compared with $10.1 million or 21% of revenue last year. The flat margin performance year-over-year reflects the slightly lower mix of syndicated revenues which generate higher margins than advisory services, the net addition of sales and research headcount, offset by leverage in our corporate support costs which are growing at a slower rate than revenue.

Turning to Forrester's full-year results, 2007 total revenue increased 17% to $212.1 million from $181.5 million last year. Net income increased 23% to $27.6 million from $22.5 million last year and earnings per share for 2007 increased 18% to $1.16 on diluted weighted average shares outstanding of $23.7 million compared to $0.98 and 23 million weighted average shares outstanding last year. 2007 operating income was $36.8 million or 17.4% of revenue compared with operating income of $30 million or 16.5% of revenue in 2006. This is in line with our goal of targeting operating margin in the range of 16.5 to 17.5% while growing revenues at the rate of 15 to 20% annually.

Now I would like to review the balance sheet. Our wall sheet remains strong. Our cash and marketable securities at December 31, were $249 million, up $41.2 million from our year end 2006 balances. We generated $37.4 million in cash from operations year-to-date which is down from prior year due primarily to costs related to the stock option investigation and restatement of our historical financial statements, foreign tax payments, as well as an increase in the number of clients receiving payment terms on contracts which is due in part to a higher mix of consulting business. During 2008 Forrester expects to generate 45 million to $50 million in cash from operations.

As mentioned in our third quarter earnings call, our Board of Directors authorized an additional $50 million to repurchase our common stock. During the fourth quarter of 2007 we purchased 172,000 shares at a total cost of $4.6 million and will continue to be active with the buyback at selected price points. Accounts receivable at December 31, was $69.9 million compared to $59.7 million as of December 31, 2006. Our day sales outstanding at December 31, was 66 days, down slightly from 67 days last December. In accounts receivable over 90 days was at 6% at December 31, 2007, consistent with last year end. Net property and equipment increased $6.8 million at December 31, 2007, from $5.6 million at the end of 2006. Our capital spending for 2007 was approximately $5.1 million. Deferred revenue at December 31, was $111.4 million, up 11.6% over last year end. Our future AR balances which are amounts to be invoiced in the future for clients with multi-year deals or scheduled payment terms increased 11% to $46.8 million, at 12/31/07 from $42 million at December 31, '06. We view deferred revenue and future ARs as good leading indicators of expected business performance. If you include future accounts receivable, deferred revenue grew 12% year-over-year.

Now I will review Forrester's fourth quarter metrics providing both fourth quarter and year-to-date performance. Agreement value or AV represents the total value of all contracts for research and advisory services in place without regard to the amount of revenue that has been already recognized or is yet to be recognized and was $197.2 million at December 31, a 14.1% increase from last year. At December 31, Forrester's retention rate for client companies was 75%, and our dollar retention rate during the same time period was 85%. Our enrichment rate was 105% for the twelve-month period ending December 31. This performance, while a slight improvement over the third quarter is not at the levels we expect. The performance was adversely affected by the sales attrition in the first half of 2007 and sales execution issues in Europe and Asia. We have taken steps to improve performance in these areas with additional staffing in the U.S. and organizational changes internationally. At the end of the fourth quarter our total for client companies was 2,468, up 61 from the prior quarter and 156 from the year end 2006. For headcount at the end of the fourth quarter Forrester had a total staff of 903, up 779 from year end, current headcount includes research staff of 336, up 38 from year end and sales staff of 308, up 38 from year end as well. A substantial portion of our headcount increase occurred in the third quarter.

The last topic I would like to cover today is our business outlook for the first quarter of 2008 and full year. In summary 2008 was -- 2007 was a solid year for us. We have completed the restatement of our historical financials and made organizational changes to accelerate the growth of our syndicated business. This coupled with the strength of our balance sheet allows us to pursue strategic alternatives for our cash with the right opportunities.

Our pro forma guidance for the first quarter and full year 2008 excludes the following. Amortization of intangible assets which we expect to be approximately $200,000 for the first quarter and $400,000 for full year 2008. Noncash stock-based compensation expense of between 5 million and $6 million for 2008 and costs associated with the stock option investigation and restatement of the Company's historical financial statements, and also gains and impairments on sales of marketable securities and nonmarketable investments. For the first quarter we're aiming to achieve total revenues of approximately 53.5 million to 56.5 million operating margin of 13 to 15%, interest income of approximately $2.3 million, a pro forma income tax rate of 39%, and pro forma diluted earnings per share of approximately $0.24 to $0.28.

Our pro forma full year guidance is as follows. Total revenues of approximately 240 million to $248 million, a pro forma operating margin of approximately 17 to 18%, interest income of approximately $9.5 million, pro forma income tax rate of 39%, and pro forma diluted earnings per share of between $1.28 to $1.36. We have provided guidance on a GAAP basis for Q1 and full year 2008 in our press release and 8-K filed this morning. Thanks very much, and I'll now turn the floor over to George.

Thanks very much, Mike. I would like to personally welcome investors to our 2007 Q4 call. My remarks are in five parts. Comments on 2007, a review of Forrester's three business imperatives, Forrester's addressable market, tech spending forecast for 2008, and then finally acquisitions.

We accomplished a lot in 2007. We were able to navigate our restatement without disrupting our business. We made big progress on the transition to becoming a role-based Company. We landed a great CFO in Mike Doyle. And finally and perhaps most importantly Charles Rutstein our COO, and our three managing directors, Julie Meringer, Dennis van Lingen, and Mark Nemec, made great strides as a management team. Forrester's operations are in the hands of an innovative and maturing group of leaders, and that bodes very well for the future of the Company. Overall we're pleased with our 2007 performance. As I talked about on the Q3 call, Forrester has three business imperatives, number one, completing the buildout of role-based, two, growing our sales platform, and, three, increasing the quotient of syndicated business what, we call Q.

Turning first to role based, since the beginning of 2007, Forrester has been going to market by the 17 roles of our clients, eight IT roles, five marketing and strategy roles, and four roles in the technology industry. All that we do including research, boards, events, consulting, and data is directed towards making our clients in these 17 roles successful. We are role-based because it enables Forrester to have high relevancy with our clients, enhanced differentiation from our competitors and deeper client relationships. We believe that these advantages will result in higher renewal rates and increased new business win rates.

Now, how has our progress been in roles? As Mike has noted beginning in 2008 we will measure our success in roles through a simple metric, average roles per account. This is essentially a measurement of client penetration. Mike will report this metric to investors beginning on the Q1 call. In 2007 research reorganized into discreet teams, each focused on a specific role. Beginning in 2008 these teams are goaled on the profitability and client satisfaction of their respective roles. Sales is now organized into three groups, each focused on a set of roles, this has increased the knowledge, specialization, and efficiency of the salesforce. In February of 2007 a year ago we launched 17 websites, one for each role. In January of 2008, last month the Company upgraded the sites, organizing content around the success imperatives, essentially the business goals of each of the roles. Feedback has been very positive.

Our second business imperative is to expand our sales platform and to this end we grew our salesforce by 14% in 2007. We expect to increase the size of the salesforce by between 15 to 20% yearly over the next three years while simultaneously increasing sales productivity. A major change for 2008 is the placement of multiple sales teams in single accounts. We will approach IT and marketing and strategy roles in large companies with distinct, specialized sales groups. This move effectively doubles our sales territory. Our final business imperative is to increase our quotient of syndicated business, again what we call Q. Our Q products are RoleView, Boards, and Data. Non-Q products are Events and Consulting. Q products are the most profitable and renewable in our product portfolio.

Although we are pleased with the performance of some of our syndicated products, notably Forrester leadership boards, our overall Q revenue did not meet our plan for 2007. In 2008 we are making a concerted effort to move Q sales higher as a percentage of our total business, and our goal is to increase Q every year for the next three years. We have several efforts to drive Q. The first is to make our research more role based and therefore more relevant, increasing its value for clients. The second is a sales compensation change for 2008 that will appreciably increase incentives for selling syndicated services. Finally, we are continually working to enhance the web experience for Q clients. In future calls we will continue to update you on our progress in the three business imperatives.

How large is our potential market as we become role-based? We believe that there are approximately 25,000 organizations worldwide in our target market. Within those entities, we estimate our addressable market at 4 million executives and $9 billion. Our penetration to date within this target market is less than 5%. Clearly we have excellent future growth potential.

I know that many investors are tracking technology spending, and I would like to give Forrester's latest estimates. On December 27, Forrester published its U.S. IT market outlook in summary. The report projects that U.S. IT spending will grow at 5.2% in 2008, and by the way that's on par with the growth we saw in spending in 2007. If there is a slowdown in recession in 2008, we believe that Forrester's role-based approach should continue to have value with clients. We recently held a well-attended conference call for CIOs, advising them on tactics they can use in the event of a recession. A new report outlines advertising strategies for interactive marketers if they face budget cuts in the coming months.

Before I conclude, I would like to say a few words about acquisitions, a primary use of the Company's cash reserves. We're looking for acquisitions that meet six criteria. One, they bring more roles to our portfolio; two, they bring more content to existing roles; three, good people; four, a cultural fit; five, a habit of profit; and then finally, six, attractive financial terms. With our restatement complete our development group is now actively reviewing and analyzing acquisition candidates. So to conclude, we made great progress in 2007 and expect that our transition to being fully role-based will be completed in 2008.

We are laser focused in 2008 on three operational imperatives. One, roles, two, growing the sales platform, and, three, increasing our quotient of syndicated business. We hope to see many of you as we visit with investors in February and March. We're traveling in Kansas City, Minneapolis, Cleveland, Dallas, Houston, San Francisco, Los Angeles, New York, and Boston. Please let us know if you would like to get together. Thank you for listening to the call. I would now like to welcome Charles Rutstein, Forrester's CEO to join Mike and me for questions. We will now take questions.

(OPERATOR INSTRUCTIONS) Your first question is from the line of Laura Lederman of William Blair.

Thanks for taking my call. Good quarter, guys.

Hello.

A few questions obviously with the stock market and fears of the economy, wanted to talk a little bit about what the CIOs are saying? Do they expect to get budget cuts and so that's part A of the question. Part B is when and if they're talking about budget cuts, what do they say about which pieces of your business would remain the strongest? Thank you.

I will go first here Laura, and what I'll tell you is I have been with a number of CIOs over the last month-and-a-half and they're all worried but none of them ceded their businesses. In fact, none of them have had communications from the CFO saying get ready. We don't see it in the actual business of our clients. That all being said, if you watched the recession five, six years ago, what happened is typically the budgets would be cut in May, June, that typically happened after Q1 and sometime in Q2. Like I said, we don't see it at this point.

Following along with the second part of that, when they talk to you about your business, what do they view as the most critical and what would they view as maybe a little less critical or more discretionary in terms of the business that you provide them?

Laura, it is Charles. The pattern that we saw in the last economic slowdown was that they elected to do a little bit more consulting with us perhaps and a little bit less of the syndicated work. That being said, we made a material change in our product portfolio since that time, most notably the introduction of the leadership boards. A lot of the discussion that the leadership boards members are having now of course is about how they're dealing together with the challenges that they're seeing, so it is our belief that we may see a slightly different pattern this time around.

Also one final question for me and then I will pass it on. Can you talk a little bit about what core research grew, in other words if you take up boards and you take out data, you mentioned that syndicated in total was a little weaker. Can you talk a little about syndicated just core research and how that did and what your expectations are for '08?

Laura, it is Mike Doyle. We don't break out the detail around that, so we typically just give the broader research numbers, so from our perspective obviously we said research grew at about 14%, and we're anticipating as we try and shift that mix just because of the way deferred -- our -- basically our accounting for bookings syndicated deals occurs, then what's going to happen is as we build our business next year we'll get the benefit both in the second half and then roll into 2009 when we anticipate our mix of research business to grow considerably, but we don't anticipate that the mix is going to change year-over-year for 2008.

And Laura, if I can just speak in generalities, we talked about Q was not meeting our plans for revenue in 2007. One of the reasons was we had a little bit weaker performance in research than we were looking for.

Thanks so much. I will circle back after everyone else gets a chance.

Thanks, Laura.

Your next question comes from the line of Andrew Thut, BlackRock. Please proceed.

Hey, guys, nice job.

Thanks.

Good to see contract value reaccelerate there. Where is salesforce turnover right now in the quarter and how has that been trending year-to-date?

Andrew, it is Charles. We saw a sequential drop in Q3 and a sequential pop back up in Q4, so we saw a pattern through the year that was a little bit volatile. The overall turnover rate I guess I would say is not where we want it to be. It is one of our focuses here for 2008.

So when you pop back up in Q4 what was that on an annualized rate?

I don't actually have that number in front of me, Andrew. I don't know if we have it. I think we have to get back to him off line.

We have just an aggregate, but we'll get back to you in total.

What do you think is causing that?

Well, I mean, I did do a little bit of a dive, Andrew, and we're still assessing here, but the quick dive that I did on that suggested that a little bit over half of that was involuntary attrition which means that we're still continuing to be aggressive about pushing low performers out of the organization, the balance of course would be voluntary, so I can actually feel pretty good about the involuntary. We're keeping the standards high. It is the involuntary piece that we need to continue to focus on, rather the other way around, the voluntary piece we need to continue to focus on.

Let it be said, Andrew, this is an area we'll work on a lot in the first half of the year.

Is there a bonus payment that happens early this year that people are waiting for or no?

No. There is no annual component to the plan at this point.

Okay. It is also nice to see client adds. I know from talking to Mike it is sort of a metric that we're focused on that you guys aren't particularly focused on, but the client adds that dipped in Q2 of this year and have started to pick back up meaningfully. Any color you can give there?

I think that as we get into the Q1 call, Andrew, we're going to have two metrics for you on this one. One is clients and the other is the roles per client. What we're seeing as we become a more role based Company, we're tending to get deeper relationships in the existing clients. That means probably not going to see client count move as fast as it did as an example in '06, but more depth in the clients. You have to look at the depth and the width of the client base. We are certainly doing that.

Okay. Okay. Thanks.

Hope that helps.

(OPERATOR INSTRUCTIONS) Your next question comes from the line of Bill Sutherland. Please proceed.

Thanks. Good morning, everybody. George, I was curious as you look at the expansion potentially of roles perhaps through acquisition, what are some of the, just broadly speaking kind of categories to think about that we should think about?

They're -- by the way, we don't need more roles to grow this Company fast, just to be very clear about that. As I said, we have 4 million executives and $9 billion in the current 17 roles. In the acquisition side what we would be looking for is potentially supply chain and manufacturing, potentially in the finance areas of roles and also in the HR spaces. Those are the ones that come quickly to me and other ideas, Charles?

Sure. I think George's point is well taken. Those acquisitions that we're looking at are not all about expanding the footprint of roles. Many of them are about expanding our depth within the roles that we already serve.

Any characterization you can put on the size of the -- some of the candidates in the pipeline?

Size of companies?

Yes.

Anywhere from 1 million to 100 million.

Okay. I figured it was wide.

Pretty wide range. Yes.

And then last, as you push up the research quotient, I guess this is a little vague, but looking out a few years, do you have a sense where the operating margin can go? Either GAAP or pro forma?

I think what we've said, Bill, is that we -- in the near term we were going to stay in the range of 16.5 to 17.5 but when we look at the model we believe that long-term we can be 17 to 19% and still be growing the top line at double-digits. I think George on the last call mentioned we could push the margin well above 20% if we chose to and not grow the business as fast, but we feel that in the near term it is a good balance to target the 16.5 to 17.5 with double-digit revenue growth and we think in a few years out as we leverage the model more, 17 to 19 is certainly doable with still double-digit revenue growth, and our recent experience suggests that that's absolutely the case.

So, Mike, that would be a combination of scale and the increase in Q?

That's correct.

Okay.

I think if you move too high, as high as 70% which that's a possible target for us, you might in fact see margins grow even higher than 17 to 19 and growth go even higher as well. That's a long-term stretch goal.

Yes, right. Okay. Thanks, guys.

Hope that helps. Yes.

Your next question is a follow-up from the line of Laura Lederman. Please proceed.

Hi, guys, just two quick follow-up questions. One is you worked to accelerate the syndicated research by increasing the payout on that. What is the risk that the other business doesn't grow as much and that they lose a little of focus on that?

Yes. I mean, at some level, Laura, it is Charles, it is a zero sum game. If they're going to hit their number, at some level of performance they're going to sell one or the other, so you're trading off one against the other. I think what we've really done is we have aligned the rewards that we give salespeople in term of the commission rates with the benefit to Forrester, so the syndicated business pays out at a much higher rate, and that's because it, as you know, is much more profitable for us. I think it is inevitable there is probably some trade off between the two, if somebody is busy pursuing a syndicated deal at that time is not available for to them to pursue a consulting deal. That being said, let me be clear about one point which is that we still intend to grow in the consulting business at material double-digit rates here in 2008 and beyond. All we're looking to do is shift a few percentage points of the mix at the margin.

What we found over time, Laura, is clients who consult with us tend to renew the Q products at much higher rates. There is various synergy between the two sets.

Final question which is in the past you've talked about price increases. Is that something you would not do this year based on economic concerns or just kind of thoughts on price increases?

As we've talked about in the past, Laura, we look at kind of three things there. We look at product demand, we look at the value that we're delivering, and we look at the competitive landscape. We'll typically institute a price increase in mid-year for most of our products which is what we did last year in July. We did a very modest price increase here in January which is sort of an off cycle one for us, not for any of the core products, but we did increase prices slightly for consumer data, for business data and for some of the larger user group packages. I think as we get into 2008 here, we will follow the same pattern. We will look at the competitive landscape, the demand, and the value delivered, and as you know, the economics circumstances, so I would say we're not ruling out any changes at this point.

Thank you so much.

Thanks, Laura.

Ladies and gentlemen, that does conclude the question and answer session. I will now turn it back to management for closing remarks.

Thanks very much for being on the call, and please give us a call if you want to see us while we're on the road. Thank you very much.

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