愛德士 (IDXX) 2002 Q1 法說會逐字稿

Good day everyone and welcome to the Idexx Laboratories first quarter 2002 earnings revue conference call. Just a reminder today's call is being recorded.

For opening and remarks and introductions we will now turn the conference over to Mr. Jon Ayers, Chairman and Chief Executive Officer of Idexx Laboratories. Please go ahead, sir.

OK. Thank you and good morning. Thank you for joining us today for the Idexx Laboratories first quarter call. And I'd like to first start by asking Conan Deady, the Vice President and General Counsel of Idexx to review the safe harbor communications.

Thanks, Jon. Various remarks that we may make about the company's future expectations, plans and prospects, including statements relating to expectations about our revenues or earnings for future periods, the status of products under development or the timing of new product introductions constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995.

Actual results may differ materially from those indicated by these forward-looking statements. As a result, the various important factors including those that are discussed in the company's most recent annual report on form 10-K, which is on file with the S.E.C.

In addition, any forward-looking statements represent our estimates only as of today and should not be relied upon as representing our estimates as of any subsequent date. While we may elect to update forward-looking statements at some point in the future, we do specifically disclaim any obligation to do so, even if our estimates may change.

Thank you, Conan. Stated with eloquence. Now I would like to introduce the other members of the management team in addition to Conan Deady who are joining me today. 000:00:--00:00:18 We have Dr. Erwin Workman the Chief Science Officer and President of our now newly named Idexx Pharmaceuticals, Inc., which is part of our companion animal group. We have Merilee Raines, the Vice President of Finance. 000:00:--00:00:32 Lou Pollock, Senior Vice President and President of our largest companion animal business, that which sells veterinary and diagnostic products. 000:00:--00:00:40 And Bob Hulsy, President of Idexx Veterinary and Services in the final companion animal business.

I'd like to first turn to our review of the first quarter performance and make a couple of comments about our product lines and businesses, and then I'll ask Merilee Raines to review the Idexx financials and then turn it back to me for some wrap up comments and guidance and then at that point we will open the call for your questions. 000:00:--00:01:15

I think as you have all seen, we started off 2002 with overall very strong quarter. Revenues out the door were $96,600,000 up six percent year over year on significantly higher sales at the clinic level where we the distribution. 000:00:--00:01:34 EPS came in at expectations in the 21 cents, or 26 cents if one excludes the CEO transition charge that we mentioned in the January call. Our earnings now are of course reflect 142, and the elimination of goodwill amortization. 000:00:--00:01:54

Turning to our largest business, the companion animal group, let's turn specifically to the diagnostic kit sales and consumables business, which showed very strong growth at the clinic level, reported worldwide sales here out the door at Idexx Group, four percent. At the clinic level 12 percent. 000:00:--00:02:20 I might note that we had an unusually weak quarter one in 2001 sales at the clinic level, reflecting a second half 2000 clinic level sales promotion. So, if we were to adjust for this abnormally easy comparison to quarter one and try to look at clinic level sales on an - an basis, we estimate that clinic sales grew at about nine percent, which overall we consider a very strong performance. 000:00:--00:02:48 As you know, we sell our diagnostic kits and consumables in the U.S. through third-party distribution. This year we have a strategy to increase the communication and coordination with our distributors with the objective of kind of leaning out the value chain, or the distribution chain and consequently reducing our distributor inventory.

And due to good, strong performance here and our unusually strong sales at the clinic level, we saw a significant drop in distributor inventory from 8.2 weeks at the end of Q4 to 6.0 weeks at the end of Q1. This is the lowest number of weeks since 1998, and we would expect distributor inventories to remain at this level or even a potential slight improvement as the year progresses.

Let me now touch on just a few of the individual product lines within the companion animal group, and in particular, diagnostic kits.

One of our big products is the canine kits - test kit sales, which out-the-door sales were down eight percent year-to-year. Although, if you exclude the distributor inventory, they were up - the distributor inventory adjustments, they were up 14 percent year-over-year, which we consider a very, very strong performance.

This is a great, great product for us. We have now over 10,000 clinics who purchase our Idexx heartworm canine product, and that's up eight percent year-over-year and also a Q1 record for Idexx.

In this product line, we also launched the SNAP on February 1, which provides room temperature storage and greater sensitivity for heartworm. And then our product, which, of course, has diagnostic information for three different diseases on it - Lyme, , and heartworm - contributed about 49 percent of our sales level at the - at the clinic level, which continues to grow in its importance in relation to overall heartworm sales.

As we've mentioned in previous calls, the prevalence of Lyme disease is higher in the veterinary community than previously thought. And , now that it's being used and with it's convenience, where discovered Lyme has been detected in all 48 states of the continental U.S. In fact, I was just in California, and the incidence in L.A. was greater than that local community had thought as a result of usage.

Feline test kits, which are the other important product here, out-the-door were down four percent year-over-year. Clinic level sales were up six percent. In - specifically, our , which tests for two diseases - feline leukemia and what we call , these - this is the only in-clinic test available in the market.

These sales were up 10 percent year over year through both increased penetration and utilization or same clinic sales. In addition, in the first quarter we launched and we have now almost 900 clinics who purchased this product.

If we move on now to the instrument of consumables business, consumables revenues were up about 11 percent year over year. And if we kind of normalize, we saw about mid-single digit clinic level sales. I would say that as we look at consumable outlooks and we have a couple of different strategies there for instrument consumables to talk about our outlook is for continued mid-high single digit growth.

One of the strategies that we have launched as a result of really some careful research as part of our overall strategy to focus on education and better medicine at the veterinarian clinic is our program for long-term medication monitoring. This is for monitoring of patients who are on certain medications that have known side effects and are chemistry equipment can monitor kidney or liver function in those cases. And that's really kind of a new concept for the veterinarian community. And we have over 1,700 clinics who've signed up for that program and have had or will have training on that. And it's really received quite a good response.

In addition, on the instrument sales we've placed 775 units this quarter, which was a strong quarter despite the fact that a portion of our efforts was focused on the better medicine and in particular, the long-term medication program. And the 775 included, again, like it did last quarter, close to 150 competitive trade-ups.

Turning now to our most important instrument program the development of laser sight let me give you an update on that. We have made good progress on the development since our last call. We've implemented and verified fixes for two of the technical issues the two technical issues that we mentioned in January. The valuations continued in selected clinics as well as our reference labs under the supervision of our in-house staff clinical pathologist.

Our objective here is to verify the ruggedness and to optimize the algorithms. And as we indicated in January we expect to launch the product - the product in quarter three, and based on the progress over the last couple of months, we are tracking well against that timeline. My objective is to ensure that when we launch, we have a product that will exceed our customer expectations, not only in performance of course, but also in reliability. And we're taking precaution to ensure that - that outcome.

In my first 75 days here at Idexx, I've had a chance to visit over 20 of our customers in the field and there is a lot of excitement. But I must say that the excitement about the is - is very high. This breakthrough technology brings to the reference lab quality team of diagnostic information to the clinic for the first time. And so with it's ability to provide this real time information, generally when the pet visit is taking place, allows the clinic to - to run many more in clinic samples per week, which of course, improves the practice of medicine and consequently also coincidentally increases veterinary and office profitability. Also the will bring not just a new revenue source in - for Idexx in instrumentation, but also in an extremely attractive annuity stream of and both instrumentation and reagents are expected to be profit contributors to us. So when we launch, will be a win-win for - for the patients, the clients, the clinic and Idexx.

Now turning to a couple of other points in our diagnostics business, our products practice developer program which is a loyalty program where clinics earn points based on their combined purchases of Idexx equipment and services, continued to have increased enrollment. We are not at 3100 clinics and this has been a well received program. In addition to the other two product launches that I've mention in the first quarter, we also launched a product called , which is a urine screening test to check for urinary tract infections in cats and dogs and also indicates the best antibiotics to use for treatment. We launched that at the end of the quarter one and it's received a very, very positive reception by our customer community. And finally, we in this business, we find a new distributor at the end of February, and expands our geographic presence in certain states where we were not strong in the distribution point of view.

Now turning to our clinical reference lab segment of companion animal group, labs continued to show good growth in sales and profit abilities. This segment grew seven percent, and part of this segment includes the computed radiography business. There we had - took orders and installed 10 units. And this is a - this, again, I think is being very, very well received in the community, and we expect to sell 40 to 50 units over the course of this year at roughly $32,000 a unit. And we expect to launch a product line extension here in the second quarter - the larger screen for small animal clinics.

In our product line - our practice information management system, this is a - this is a good business. Revenues were up four percent. And we're seeing this business turn profitable during last year, and we're seeing continued improvement in profits there and pleased with the results of this very strategic business for us.

And then finally, in the last piece, but certainly while maybe the smallest, one of the most exciting is our Idexx . And as I said, it's really not a major revenue contributor right now, but I'm excited by the pipeline and the progress this quarter.

We have on the product, we have now submitted our new animal drug application to the FDA which includes the results of our latest safety study that was conducted in accordance with the FDA request. And I think you all know that is a proposed treatment for equine , a potentially devastating neurological disease common to horses in the U.S.

We're also on track in our development schedule and regulatory process with , which is a very promising topical treatment for lameness in horses, and for , which is a long-acting antibiotic that is injectable for cats. So, we're pretty - we're very, very excited about the pharmaceutical pipeline.

Turning, finally, now to our , we have very strong performance. Overall, this business had - this segment had revenue growth of 12 percent year-over-year. Our business grew three percent and was aided by the introduction of the new product - the - launched in the U.S.

Our water-testing business had year-over-year growth of 11 percent, another continued strong quarter for that business with really revenue growth in all geographies. Noted - in that business, we got the first approval in the E.U. for our product in Norway. And while that's not a big deal, we expect that to be the beginning of an overall approval process across continental Europe that will take place over the next couple of years.

Our production animals services business had an extraordinary first quarter and was up 20 percent year over year. And this was primarily, but not exclusively, as a result of Europe which had a 42 percent growth due to a variety of outbreaks of diseases in Germany and hog cholera in Spain. So that business is really on a great start for the year.

Now I'd like to turn it over to our Vice President of Finance, Merilee Raines, to take you all through the financials before we rap it up.

Thanks, Jon. As Jon's mentioned, total revenues were $96.6 million or six percent growth year to year. In our national revenues in the quarter we're up seven percent to $26.3 million or 27 percent of total revenues. The negative impact of exchange on revenues in the quarter was about a million dollars or one percent.

Moving to gross margins. First quarter gross margin was 45 percent of revenues, which is down about a point-and-a-half to two points from expectations. This reduction is attributable to the mix in our veterinary office diagnostic business away from high margin kits and consumables which related to higher than anticipated reductions in our distributor inventories and higher than expected participation in our heart worm marketing programs early in the season.

Additionally, there were some variances in our instrument service and other production areas which we do not expect to recur to the same degree in the second quarter and beyond. Therefore, we anticipate margins should rebound two to two-and-a-half points to around 47 percent on a go forward basis.

Turning to operating expenses. R&D was $7.2 million in the quarter or seven percent of revenue. In discussing SG&A and the remainder of the income statement I'll give you our recorded numbers, then what I would say is a normalized year over year comparison which adjusts for the CEO transition charge of approximately $2.9 million in the current quarter and the elimination of good will amortization of approximately $1.6 million, which is in the 2001 numbers.

Reported SG&A at 25.6 million or 26 percent of revenues was virtually flat year to year. Normalized SG&A was down year to year by a million dollars and down as a percentage of revenues by almost two-and-a-half percent.

As the first quarter last year had higher expenses in our pharmaceutical area associated with the launch of and other expenses. Operating profit was $10,300,000 or 11 percent of revenue. 000:00:--00:00:15 Normalizing, as before the margin becomes $15,200,000 or 14 percent of revenues, which is flat as a percent of revenue with the first quarter of last year, and in line with expectations. Net income of $7,200,000 or seven point four percent of revenue compares to $7,600,000 or eight point three percent of revenue for quarter one last year. 000:00:--00:00:39 Again, normalized net income was $9,100,000 or nine point four percent of revenue, compared to $8,900,000 or nine point seven percent of revenue last year. EPS of 21 cents for the quarter compares to 22 cents for the first quarter last year, and 28 cents for the fourth quarter of 2001. 000:00:--00:01:04 EPS adjusted for the charge and for goodwill would have been flat year to year at 26 cents.

Moving to the balance sheet, cash increased by $22,000,000 in the quarter to $123,000,000. 000:00:--00:01:19 This was driven primarily by cash from operating activities, up $24,500,000, less purchases of fixed assets of $4,500,000. Receivables increased by approximately $1,000,000 to $51,700,000, while at the same time DSO decreased by two days from year-end to 48 days. 000:00:--00:01:41 Inventory at the end of the quarter was $85,000,000, which was down $1,000,000 from the end of the year. An increase of approximately $2,500,000 in our inventory of clinical chemistry consumables and approximately $900,000 in our components was more than offset by decreases in other areas. 000:00:--00:02:03 Jon, I'll turn it back to you now.

OK, thanks Merilee. 000:00:--00:02:06 Let me turn to guidance for the remainder of the year, consistent with the safe harbor language of Conan. We remain comfortable with the street estimates of Idexx's top line growth of the neighborhood of seven percent. 000:00:--00:02:21 And with consequent EPS of in the neighborhood of $1.25. And in this we are assuming a quarter three launch of , and a ramp up in volume of quarter four and this, I believe this earnings forecast would be consistent with the current street expectations. 000:00:--00:02:43 As I looked at 2003, I'd like to see top line growth break out into double digits, with EPS growth in the mid - mid teens, say 15 percent. Our 2003 should see the benefits of - of full year, and our line coming to fruition and then continued penetration of the under served markets that our existing product lines and services through great sales and marketing.

So let me just conclude. Been here about 75 days, and I've been very pleased by the - and impressed by the strength of our business generally and, of course, our first quarter performance. We have an incredibly strong customer franchise in our core businesses as is demonstrated by our customer preference for our products and services and, consequently, our clear leadership in share of market. Usually our share of market is - in our business is more than - well more than twice the size of the next largest player, and in a number of major markets, it's greater than 50 percent overall.

The first quarter demonstrated Idexx's ability to generate consistent and predictable operating performance. That would be sales growth, earnings, and cash flow, which underlies the strength of not just our strategic position, but our systems and our execution.

And the pipeline of the new product opportunities I think is very, very exciting whether they be in veterinary and diagnostics, therapeutics and pharmaceuticals, or other opportunities, such as in our research in the - in a diagnostic for BSE, or mad cow disease, in live animals, which could be a very, very significant revenue opportunity for us.

We continue also to have an extremely strong liquidity position and balance sheet with cash net of about $8 million of debt of 114 million at the end of - at the end of the first quarter.

My priorities going forward are going to be sharpening our new product development execution that comes from our great technology portfolio and capability, while also continuing to improve our success in penetrating our unserved or underserved markets through great marketing and sales, and finally continuous improvement and operational excellence through cost control as we've been able to achieve in the first quarter and working capital performance - in particular, inventory.

We've made progress on all three this quarter, and as you can see I think with several new product introductions, a strong clinic-level sales, and consistent earnings and cash flow performance.

So that's our - that's our introduction, and we'd like to open it up now for Q&A.

Thank you.

At this time, if you would like to ask a question, please press the star key, followed by the digit one on your telephone.

We'll take our first question from with Bear Stearns.

Good morning.

First, a clarification, Jon, if I could on your EPS guidance - you were indicating that current consensus is $1.25. I think it's - just looking at First Call as I see it right in front of me right now. It's $1.28, but I think that the dollar-and-a-quarter includes the five cent first quarter charge. Is that correct?

That's exactly right.

OK, so really in terms of looking at it it's $1.30, you know, on sort of a normalized basis, and which leads me to the second question. When you're thinking about the '03 numbers, are you doing it on the operating number of what I would call a $1.30 or on the post charge or including charge number a dollar-and-a-quarter?

I'd say our outlook at this point, , is based on our recorded number.

OK, so the dollar-and-a-quarter is the base we're talking about. Second, can you talk a little more specifically about your plans to the cash, I mean, obviously you continue to build up cash or continue to generate cash. Historically, Idexx has bought back stock. Just , your thoughts on that.

Well the, you know, possible uses of cash could include, of course, stock buyback or acquisition. And we're, obviously, thinking through and considering all of these alternatives. Really, our main focus near term is cash flow performance and performance of the existing business portfolio, because we actually have , a variety of very, very exciting opportunities that are organic in nature.

OK. So just update us on where the share we purchase kind of stands at this point.

Yes, , it's Merilee. We did not repurchase any shares in the quarter. So, program to date we purchased 7.6 million shares.

Out of 10?

That's correct.

OK. And last question for the moment. Can you help us understand a little more in a little more detail you know, what's driving your confidence down on interest. The timing of laser sight. You mentioned you fixed the two technical fixes. What specifically needs to be done and is there any possibility that based on what you see now that the product might be launched sooner? Or is there a specific reason, like a trade show or something, that it's very likely that you'd prefer to launch it in the third quarter?

I'd like to turn that question over to our Chief Science Officer, Dr. Erwin Workman.

Hey, , how are you?

Hey, Erwin.

As Jon mentioned, we did fix the laser optic alignment issue and the issue. Just to give you a flavor for next step going forward. We need to complete our ruggedness testing and that will - will occur some time in the, this month, maybe a little bit into May. You know, we are looking at performance of the test at sort of the upper end of the temperature range at the clinic, things like that. 000:00:--00:00:18 Remember we still need to execute the third pilot run, remember we said some time ago we had to run three. We've done two. 000:00:--00:00:28 We would expect that third pilot run this time of 50, to be sometime in the May time frame. And - and finally, we would like to go back out for a final round of clinic level testing, and of course in parallel will continue with the - the running of the instruments in the reference laboratories. 000:00:--00:00:50 So this final round of in-clinic testing would occur in the June - July time frame. So at that point you know, we should be assuming everything is - is going along OK and be in a position to - to launch. 000:00:--00:01:08 I - I doubt very seriously if - if we can launch earlier than that.

OK. 000:00:--00:01:14 OK thank you very much.

Thank you, .

Again as a reminder, if you do have a question please press star one now. 000:00:--00:01:21 We'll here next from with Merrill Lynch.

Yeah, good morning guys. 000:00:--00:01:24

Good morning, Tim. How are you? 000:00:--00:01:25

Good. A couple of questions. 000:00:--00:01:28 First, on the inventory side of the equation, as you lower or put kind of the burden of inventory upon yourself by reducing your distributor inventories, is there a change in the economics of the, your dealings with the distributor to get a higher price by sharing some of that burden?

Well, Tim we are objective in leaning our the channel is of course to lower the costs of the channel. 000:00:--00:01:57 And if we lower the costs of the channel we would expect to enjoy in some of the benefits.

OK, that's fair. 000:00:--00:02:06 And then in terms of the actual inventories that you have on hand, I know in your - your 10K you had about, oh, about eight months or so worth of inventory on hand. Is that the kind of level that you expect to maintain, or do you expect that number to come down as your demand goes up? 000:00:--00:02:24 Kind of walk us through where you hope for that number to go.

Tim, what we'd like to do is what we can give you an update on our - our estimates for - for inventory for the balance of the year, I'm going to turn that to Merilee. 000:00:--00:02:36

OK. I would say overall, for the balance of the year we would expect our inventory levels now are about $85,000,000, that they could go to $90,000,000 or $95,000,000. 000:00:--00:02:51

And in - in slides - in particular, care to comment on that?

Well you know, Tim, there are a number of goes-ins and with that inventory, and it's a - a really the overall number that we want to manage. 000:00:--00:03:05

OK. That's fair. 000:00:--00:03:06 And then just one last question - also in the , you'd reported operating profitability by segment in terms of the and the . Could you kind of give us the gross margins - how they were in the quarter on those segments?

We typically don't break that out, Tim.

thought I'd give it a shot.

Nice try.

OK, thanks. Let me just jump back in the queue.

OK, thanks, Tim.

And next, we'll go to with .

Chris, how are you?

I'm good. How are you?

OK.

I just wanted to follow up making sure - make sure I understood your comment on guidance which was on a normalized basis that is without the charge for the CEO departure, you all would be expecting somewhere around $1.29 - $1.30 for this coming year.

$1.30, yes, because that's the five cents charge.

OK. And then why the guidance - when you say sales growth in 2003, you know, breaking into double digits with mid-teens EPS growth, why wouldn't that mid-teens EPS growth be off the $1.30 number since, clearly, this is a one-time charge or in the first quarter?

Well, you know, Chris, the challenge that we have is 2003 is way out there. And I think that as - my purpose there was just to give some kind of general direction. And I think that as we complete our planning and budgeting process over the course of this year for 2003, we'll be able to give you more specific fine tuning on that.

OK. I mean if I go from the $1.30 to the 15 percent growth off $1.25 basis is about 44, which is 11 percent EPS growth. But is it safe to assume that if you grow your top line in the double digits that there's the opportunity to grow the EPS line at a faster rate?

There is depending on the - a variety of factors including, of course, mix, and also the level of strategic investment we make in platforms and products for sustained growth into the future.

OK. And all these estimates are excluding contributions from any new products introduced in the pharma area?

No, these are - these are - 2002 I think has a, I would say, immaterial contribution. 2003 - part of our growth would be supported by pharma.

OK, by which - by the existing products or by new products that you expect to be approved?

By the new products. And I'd turn that question over to Erwin here.

Of course it would be existing products, but also we would expect to be seeing sales of and .

OK. All right. Great. Thanks a lot.

Thanks, .

We'll go next to Brady Enright with Capital Research.

Brady, how are you?

Good. How are you?

Fine.

Great. A quick question and specifically regarding prices on consumable items. Canine and feline products in particular. You know, given what we saw on the gross margin line I'm trying to understand how much of that might be attributable to any changes in pricing, what you've seen in pricing. And, you know, just generally if you could comment on where there has been higher levels of price competition.

I'd say in general, Brady, that we have a pretty stable price environment in the first quarter. I think I'd turn to Merilee to comment a little bit about, I think your implicit question with regard to gross margin.

Yeah, Brady, it really is a function more of product mix than of price. And so as we look at, you know, how distributor inventories came down versus the same period last year we did see a significant part of inventory reduction coming out of higher margin kits test kits and instrument consumables. But the pricing on those, again, we're not seeing any real significant change.

So if we were to compare year over year pricing it would be flat on those products?

On a constant mixed basis, yeah. In the market, you know, of course what there is a number of factors going on here. There's mix in the market, which has been positive because of the very good success we've had in the combination products where we have a unique franchise.

Both the three combinations in canine and the two combination products in feline. And so we're seeing people move away from, you know, like a single heartworm test to a 3Dx and that's helpful to a mix. But the reason why our mix is different than that is because of what we call the distributors and we had a very significant improvement in the distributor inventory.

Would you actually say the pricing has improved then? Because my sense was that historically it has been some, you know, price degregation has occurred from one year to the next. 000:00:--00:00:15

Yeah, I don't have the history of that, but Lou do you have a ...

That's already been said, the prices were constant over same period last year. 000:00:--00:00:26

On a product by product basis, yeah.

I guess it's just my recollection is just historically that prices, that there has been some pricing pressure, so... 000:00:--00:00:35 All right. Thanks. 000:00:--00:00:37

Thank you. Pardon me. 000:00:--00:00:41 I have a follow up question from Tim Lee with Merrill Lynch.

Great, Thanks. 000:00:--00:00:44 Kind of a follow up on the safety data that you had submitted on . Can you just walk us through the data that was submitted, because I had heard that there were some diarrhea issues with the horses, and dehydration and the like. What - what was the actual data that was submitted? 000:00:--00:00:59

Tim, I would love to be able to talk to you about the data, but-but I'm not. We've submitted what we thought was a - a really high quality package to FDA. We feel confident that - the product is approvable. 000:00:--00:01:17 And that's really all I'm going to say.

And can you just, can you share with us when your last communication with the FDA was on this front? 000:00:--00:01:25

Well we shipped them over 200 pounds of materials a couple of days ago.

OK. All right, thanks a lot. 000:00:--00:01:36

Thanks, Tim.

And we have no further time for questions. 000:00:--00:01:40 At this time Mr. I will turn the call back over to you for any closing comments.

All right, well thank you very much. 000:00:--00:01:46 Again, I would like to really congratulate the Idexx team here for - for what was a - a strong quarter, and particularly at - at clinic level, and I don't want to, you know, under emphasize the impact that we were able to achieve in the reduction and - and - and distributor level inventories, and really just a good overall performance.

We have our opportunities to focus and I've indicated what those are in the area development and continued sales growth and operational excellence and I think we saw some good cost control in parts of our P&L and - and - and some opportunities in other parts of our P&L and we will - we'll continue to do this. 000:00:--00:02:32 But I - I think what's impressive is that this company has not just only good momentum, but is able to take advantage of our very, very strong market leadership position in not only companion animal group, but - but the pharma - the food and environmental division. So with that, we - we thank you all and - and if there are individual questions, we will later on be happy to hand them to our investor relations. 000:00:--00:03:02

Thank you. And that does conclude today's conference. Thank you, everyone, for joining.

Thanks.