科磊 (KLAC) 2004 Q1 法說會逐字稿

Good morning ladies and gentlemen and welcome to the ICOS Vision Systems First Quarter Earnings Conference Call. At this time all participants are in a listen-only mode. Following the management's prepared remarks, we will hold a Q&A session. To ask a question at that time, please press star followed by one on your touchtone phone. If anyone has difficulty hearing the conference, please press star zero for operator assistance. As a reminder this conference is being recorded today, Tuesday, April 27, 2004. I would now like to turn the conference over to Miss Jody Burfening. Please go ahead ma'am.

Thank you operator. Good morning everyone and welcome to the ICOS Vision Systems First Quarter 2004 Earnings Conference Call. With me today is Anton DeProft, President and Chief Executive Officer. You should have all received the copy of the press release, which was issued earlier today. If you have not yet received the copy, it's been posted to the investor relation section of the company's website at www.icosv. Before starting the call, I would like to mention that certain statements made by management during the course of this conference call may constitute forward-looking statements within the meaning of the Private Security Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties, and other factors, which may cause the actual results, performance, or achievement of ICOS materially different from any future results, performance or achievements expressed by such forward-looking statements. Such factors include among those detailed in the company's reports filed from time-to-time with the Securities and Exchange Commission. With that I would now like to turn the call over to Antoon. Antoon.

Thank you Jody, and hello everyone, and welcome to our first quarter 2004 conference call. I will start by discussing our performance during the first quarter. Then I will comment on the outlook of our business, and after that I will be glad to take your questions followed by some closing remarks. Revenues for the first three months ending March 31, 2004 were euro 21m, a sequential increase of 40% over the fourth quarter of 2003, revenues of euro 15m, and a more than two fold increase over the prior year first quarter revenues of euro 9.3m. Income from operations for the first quarter of 2004 was euro 6.3m, more than double of the previous quarter, and more than 12 fold the operating income of euro 0.5m for the first quarter of 2003. Net income for the first quarter was euro 4.6m or euro 0.44 per share compared to net income of euro 0.31 per share during the previous quarter, and to euro 0.02 per share for the first quarter of 2003. First quarter of the year marked the second consecutive quarter of 40% sequential growth and the 10th consecutive quarter of sequential revenue increases. What is probably the most remarkable about this performance is that we have now for the second quarter in a row shipped and installed 40% more equipment than the previous three months' period leaving delivery time essentially unchanged. We are therefore very confident about the flexibility of our operation mode. We are also happy with the way that our Chinese operations have seamlessly integrated into our organization, and contributed to the results. In addition, the combination of revenue gain from our low fixed cost operating model caused the operating margin, a key performance measure, to jump from 20.5% to 30% in the first quarter of 2004. New customers, in the strict sense of the metric, first time buyers accounted for 5% of revenues during the quarter.

sales cycles, and especially ramp up cycles with major customers can take considerable amount of time, and our sales growth continues to be driven by some large customers that we have won during the last downturn, and we are still expanding the use of our inspection systems. One of these major customers for the first time represented more than 10% of our sales. The sales of new products accounted for approximately 10% in the first quarter of 2004. Our R&D activities remained intensive across the board in support of the strongly growing customer base and product line up. Actually some of our most advanced customers are driving a considerable amount of R&D as they deploy our systems in their different applications. We also see a more general trend towards more detailed inspection as our industry moves towards various non-PC applications. As an example, ships going into automotive applications require a higher degree of inspection as they will have to operate in more extreme circumstances and need a longer life time. The competitive situation as the market continues to strengthen, a considerable amount of our efforts during the quarter have gone into shipping quality products to our customers on time. We are very happy and proud that now, two consecutive quarters with 40% sequential growth, our operational model has allowed us to continue to deliver equipment when and where our customers need it with constant lead-time. We believe that delivery will remain an important competitive element as we progress through the cycle, and we are convinced that we are equipped to continue to deliver quality products to our customers when they need them. An important element in our flexibility to increase our manufacturing capacity is

our newly acquired Chinese plant for final assembly and quality control. The organization has total number of employees to the 244 full-time equivalent at the end of the first quarter up from the level of 173 at the end of the year 2003. The bulk from this increase comes from our new plant for final assembling and quality control in China, which employed 55 people at the end of the quarter. We are happy with the way that this plant has integrated into the rest of the organization and has contributed for flexibility and to our results. We believe that our manufacturing model excels in terms of quality and flexibility and our Chinese operations are already an intricate part of this. During the quarter we have also opened an ICOS office in Korea. This office will be responsible for sales and support to our customers in South Korea. Finally, we have added some staff to strengthen our organization mainly in customer support and in various development functions. The revenue breakdown for product lines, for the first quarter, revenue breakdown was 12% board-level, 6% system-level, and 82% in inspection machines just compares to 13%, 10% and 77% in the fourth quarter of 2003. Our growth was particularly strong in the inspection machines, which grew 50% quarter-over-quarter. Revenue breakdown per geographic area during the first quarter of this year, the major sales volume was again realized in Asia where we did 75% of our turnover of which 17% in Japan. Further, 19% of our turnover was realized in Europe and 6% in US. As anticipated in the previous conference call, Japan came in strong with several tangible orders and deliveries during the quarters. We also see a trend of orders and deliveries away from Europe and the US and into Asia.

Then financial information, on revenues of 21m we achieved gross margin of 59% in the first quarter of 2003 compared to a gross margin of 57.4 in the previous quarter. This gross margin increase is at the high-end of the guidance that we gave during our last call and is mainly due to the effect of increases in production efficiencies. For the running quarter we expect our gross margin between 69% and 61% driven by further increased production efficiencies. R&D expenses increased to 1.83m compared to 1.79m in the previous quarter mainly due to new hiring. The R&D expenses for the quarter were positively affected as we received grants to the amount of 285,000 in this first quarter. For the next quarter, we believe that the R&D expenses will be in the range of 2.1m to 2.3m. SG&A expenses increased to 4.28m compared to 3.76m in the previous quarter mainly as a consequence of the higher level of the commissions, which is related directly to the increased sales levels. The balance of the increase came from some limited hiring. We believe that our SG&A costs will continue to increase during the current quarter mainly because of the increase in sales commissions and to a much lesser degree by some additions to our organization to support and further expected market expansion. The income from operations for the first quarter was 6.3m more than double of the 3.1m reported in the previous quarter. Operating margin further jumped from 20.5% in the fourth quarter of last year to 30% in the first quarter of this year. We believe that we will continue to see a strong leverage on our operational profit when our topline revenues increase further. During the first quarter we incurred a foreign currency exchange loss of 23,000. We expect currency exchange effect to remain not material in the near future. We incurred a tax of 1.8m or approximately 27.8% of income before. The sharp increase in taxes is the consequence of the elimination of the tax allowance in Japan during the previous quarter and due to the geographic tax mix. We expect our tax rate to remain in the 25% to 30% range during the second quarter. Consequently, we realized the net gain for the first quarter of 2004 of $4.6m or basic earnings per share of 0.44 euro. Cash flow from operations in the quarter was positive at $5.8m, the net cash flow from operations including changes in working capital amounted to $1m flat. During the first quarter of 2004 we used 87,000 in investing activities and we spend net $167,000 for financing activities. We now turn to the balance sheet. We continued to have a very strong balance sheet as our operations generated extra cash and we kept managing our working capital carefully. Cash balances stood at $30.4m at the end of the first quarter of 2004, up from $29.5m one quarter earlier. We believe that our current cash level is more than adequate for future operation. Accounts receivable increased to $19.7m from $13.1m at the end of the previous quarter. Days outstanding were at 84 days in the first quarter or at the end of first quarter up from 78 days at the end of the fourth quarter of 2004. Inventories increased to $14.4m at the end of the first quarter of 2004, compared to an inventory level of $10.7m at the end of the previous quarter. The inventory split was $4.7m raw material, $6.1m working progress, and $3.6m finished goods. The increased inventory level is in line with our anticipated increased sales level for the next quarter. In the business outlook, we expect to continue our steep runs during the second quarter of this year with sales increasing further sequentially with 25% to 30%. In fact, this means that expressed in both terms, we expect the second quarter to become our best ever, breaking through the $30m revenue barrier for the first time. Based on the gross margin and cost evaluations that we discussed before, we expect our operating margin to continue to expand in the 30% to 35% range with the higher end of the spectrum being more likely. As we're moving to the second half of the year, we first of all have to say that visibility remains low as the delivery times of our equipment is typically only a few weeks. Nevertheless, after three quarters of very strong sequential growth, we currently expect to see a more sideways market evolution during the second half of this year. This is based on some customer input and on market forecast just like Gartner who predicts somewhat a pause in the growth during the second half of the year with the growth picking up again in 2005. Putting things in perspective, it's clear that even with further

in the second half of the year, 2004 will be a better year for us. Even assuming a flat revenue during the second half of the year, we would still more than double our sales revenues versus 2003 and expressed in dollar terms again at current exchange rates, we would swiftly break our sales and earning records set in the year 2000. That concludes my comments. I would now like to open the call to questions. Operator?

Ladies and gentlemen, if you wish to register for a question for today's Q&A session, you will need to press star then the number one on your telephone. You will hear a prompt to acknowledge your request. If your question has been answered and you wish to withdraw your current request, you may do so by pressing star then the number two. While using a speakerphone, please pickup your handset before entering your request. One moment please for the first question. Our first question comes from Michael Cafflemen with Petercam.

Hi, Antoon, congratulations with a fantastic quarter. I think the margins you are making could make some software companies jealous. I still have a couple of questions here. One is, you are now saying that in Q2, you think you will break the $30m revenue milestone.

That is -when you express them in dollar, they are not to be misunderstood.

Okay, very good. Can you -- you said that 10% of sales in Q1 came from new products, that's essentially the Flex tape.

As the matter of fact not, the way we have that metric setup - technically what we consider a new product is a product that is introduced during the last 12 months. And technically speaking, FTI is not a new product anymore. So, none of these 10% in fact is from that product.

Okay, and can you more or less give the range in how much percent of sales the FTI was?

Well, unfortunately we do not provide information for competitive reasons. We don't break down per specific product type.

Okay.

Sorry for that.

If we're looking to the gross margin, you said the improvement from the 57.4% to 59% was mainly coming from more efficient production efficiency. To what extent is that including, let's say, lower labor rates in China?

Well, that is an element - the increased production levels in China is definitely an important element of that.

Okay. In more general terms, I mean Q2 will be a very strong quarter than your guidance for flat in the same H2, would you consider this rather as your peak quarter?

Well, I think normally we only give guidance for one quarter, which now would be the second quarter, and so anything beyond that, the most important thing I should stress as always is that the visibility is low. So, we have to look at very general trends and very general

, and so on and so on. So, being specific about that at this point is very difficult - that's the first thing. Nevertheless, contrary to what we normally do, I did want to give a little bit of guidance for the second year half (Audio Gap) for a very specific reason because after three quarters of growth which is well in the very high sequential range - the twice 40% or more and then again 25% or 30%, and I just wanted to avoid the peak would simply extrapolate from there, because that would not be correct. But being more specific as to what's going to happen in the second year half, that's why we're calling it side ways. We realize it's vague, but again the low visibility is a most important part of that comment.

Okay, thank you.

Welcome.

Our next question comes from James Ricchiuti with Needham & Company.

Yes, you mentioned that you had 10% of your revenues from one customer for the first time. Can you talk it all without disclosing the identity of the customer? Can you tell us a little bit about the type of applications, and perhaps the type of products?

Yes, certainly. The type of products is -- well the more trade based classical product types; in the applications, it is all kinds of or various kinds of applications typically in the computer arena.

Okay, Anto can you talk about any other customers that represented, as significant part of revenues; is 5% of customers - trying to get an idea of customer concentration in the quarter?

So, well we mentioned it was one above 10%, there are a few other important ones. But these are some of the names that you could expect - some of the larger subcontractors, some of the larger names in the industry. Of course, some of them also on the FTI side, but if we look at customers for instance above 5% to give you an idea, it's less then half a dozen.

Okay, and it sounds like you'll be seeing those customers continue to deploy new equipment in the June quarter, and then you see that kind of leveling off as I guess. Is that your sense or what do you see the customers that you saw very strong demand from this quarter leveling off currently and your seeing some of the newer customers begin to deploy?

So, it's not so -- I mean these are new customers, and it's not so that this transition period in which they would buy more and install more, I mean these customers are buying equipment as their capacity increases. So, it is definitely another transitional phase that we are talking about here. So, it is more a general trend that we see as I described,

Gartner said that, if capacity increases in the growth at which the capacity increases, industry-wise it is going to be leveling off a bit and then taking a little breather in the second half of the year to again continue to increase then in 2005. It is just general occurrence, that is the best expectation, but again I should stress that even more important than all these comments is the lack of the ability. Yes, we know what kind of industry we are in, but that is the best estimate that we have today at this, I would even say at this hour.

If you look at the level of capacity utilization that these customers are at, at the point that they start making multiple -- placing multiple set of orders, how does that differ, say from maybe the previous cycle. Are they waiting until they are at a much higher capacity utilization rate before they put the multiple orders in

or versus where they really were in the last cycle. Trying to get a sense -- I am trying to get a sense is that, perhaps how their visibility is with their customers?

Yes, I think it is a very good question, and well it is difficult to really make firm comments for how our customers think, but I have been questioned that our customers definitely not forgotten the last downturn and how severe it was, and in general you see it is still a very cautious buying pattern, which translate into people really wait for their machines to be absolutely overloaded before they make further commitment. It is not that people are in the mode of adding fantasy and anticipation of what is going to come. So, it is still a very cautious buying pattern, which we consider is good because it means that the people are buying according to real needs.

Does that also contribute to your - in improving the sale margins because it sounds like customers come in, they probably look for equipment fairly soon. They don't give you a whole lot of leads in terms of orders. Do you then have to turn things around faster are you able to -- are you seeing any higher margin from that potentially customer having a premium for the past

?

Not really. I would say that is not how our industry in general works. The improving margins literally come from the cost sides where we, well, further improve our processes and our cost structure.

And then your pricing is fairly stable right now?

That is correct.

Okay, thank you.

Our next question comes from Mike

with Neary Asset

.

Hi, Antoon, great quarter again. When you talk about this quarter's revenues and next quarters relative to the cycle. You know, next quarter you are looking at roughly 25m Euros. How much of that is business from new market that you weren't even in, last that cycle?

Well, that is a very good question. I will answer -- I mean, I cannot give you an immediate percentage or anything like that, but it is definitely true that the world is different now than it was last cycle, and when I say that expressed in broad terms, this will already be our best quarter ever. It is clear that this is definitely true for the industry, and there are two major elements to that, that's first of all, our major product line which till today is the trade base inspection system. The market share has, well doubled or more than doubled since the last cycle and then there is the additional products. So, I am trying to express it somewhat in a percentage -- I would say, maybe 15% to

roughly would come from new products, about 20% probably. And then the rest would come from growth including this increased market share.

Okay. Well, maybe you would rather talk about it in terms of the overall industry? I was so much struck in your annual report, how low relative to last sub cycle the bookings for the back-end still were at least as of the end of last year. I know that it's increased significantly since then, but you know, overall in terms of the cycle where do you think we are? Last quarter it was early, are you still early, are we in the middle of that now or what do you think?

I think that no two cycles look like. So, it is difficult to compare where are we in the cycle. I would still think that we are quite early in this cycle if you compare also this information with our -- that you just talked about in bookings. I don't have the figure in front of me but I am sure that it is still -- well, it is first of all in our C plan and it's -- it would still be in the first half of the cycle I would assume, but I have to admit, I don't have the figure in front of me here.

Okay. And in terms of cash, I know you had tried to buyback stock earlier at the bottom of the cycle because you had a good balance sheet, very few other people did. At this point, what do you do with cash? Do you let it build then for the next down cycle to protect yourselves, what's your outlook in terms with the cash position?

That is definitely one -- contemplation, one thought, but again the most important elements of that cash is the fact that it is a war chest for whatever opportunity that may arise, whenever it arises. Having this amount of cash allows us to implement our mission and our strategy despite the cycle and often good opportunities come at not only the best part in the cycle. So, having that cash is important to have that freedom for execution, I would say.

Okay. Great, you guys are doing a great job. Thank you very much.

Thank you.

Our next question comes from Peter

with One

Hi, it is Peter Telston. I have a couple of questions please. Firstly, just on FTI, I understood you won't give the percentage of sales, but can you give some idea to the extent of which the percentage of your sales in this product area is still building out, say as a percentage -- how did you go into Q2 and later on?

We will be coming at a fairy high base in Q1 as a proportion of sales.

It already came at a fairly high basis here.

Okay. You would expect us to track the other sales development of the total going forward. So, is that okay. And then is it possible to get some idea of what sort of visibility you are having out there, since it is a relatively young product area and the penetration right is a low, extent to which you may have, better to view of sequential development of this product area through into the second half?

I would say the visibility there is, it is typically a little bit deferred, but that has to do with the fact that it is also a matter of classic timing. But also there if you literally go into the second half of the year and especially towards the end of the year, visibility really becomes smaller because there you would have to look at how quickly will different -- will various customers will adapt or adopt this technology. So, it is a little bit longer in other words than with a regular product that we will turn around in a few weeks. But it also doesn't extend really until the end of the year.

Can you say what the customer experience has been like in terms of other pay backs or efficiency gains with expectations when they decided to order the product?

Well, I think, it's very positive, the customers' feedback - well first of all, all the installations so far went very well, and the system is working very well. Secondly, it increases the quality of the product -- what becomes more of a quality and therefore also a commercial element in their relation with their customers. So, that is the effect that we see and we also believe that, that will extend the market for this product and the application further.

Can you guys have a feel for what sort of penetration you think you have with the -- I think there are two particularly large customers, the potential customers there, I think what sort of penetration you have into their

at this point?

That's really something we will not have to disclose.

Okay. And then just a quick question on the gross margin, to what extent is the changing product mix of those impacting gross margin?

That's a minor element.

Okay. And then you made a comment on sales and marketing cost which I couldn't hear, would you mind repeating what you said on your projections for sales and marketing cost?

is asking for the market when I lost to comment.

Best thing in the market -- yes, I made that comment, I believe as part of the SG&A comment. Now, I didn't comment very specifically on it, what I said is that we expect SG&A costs in general to continue to increase, mainly because of the increase in sales commissions and to a much lesser degree by some additional sales or staff to our organization to support the further expected market expansion. That's probably the

that you are referring to.

Yes, that's the part, okay. And then can you give a view on what you are experiencing in terms of supplier lead times, the expense to which there are any bottlenecks developing at this stage in your production structure?

There I would say, so far so good, even though we have had very, very strong ramps, we have managed to really work -- we haven't really seen any serious bottlenecks, and we don't see any serious bottlenecks developing. Of course, as we progress through this cycle and as things heat up, this is of course a major element of our attention at this point, but like I said, the best summary at this point is, so far so good.

Okay. And then just on your guidance for the second half, that comment you -- just to make sure, understand a couple of things, firstly you are talking about sequential development, and I presume --

That's correct, yes of course, yes.

And then you were talking about the market overall, not particularly yourself is that correct?

Well, I think both yes.

Okay. So, even if that goes back to the FTI as a percentage of sales, you wouldn't expect to increase much so that would hence -- why it was a younger products

?

Yes, we would -- but again I have to -- going back to my earlier comments that the visibility remains the most important element of that comment, but yes in general the comments would apply to both the market as a whole and

.

Okay. And that's despite having taken on quite a large customer in Q4 last year in which I think your are greater than 10% customers, also new customers.

Yes, but I'm not sure I understand your comment correctly.

Well, if you to have a customer who has had more than 10% of sales, he only came in Q4 last year, and is now ramping up as a customer, I don't know whether he immediately started ordering at full rate, but I would assume there will be some -- they would offer half of that customer towards this, it's their natural level which would carry on through this year?

But any effect that built-up has started earlier than you suggested in the fourth quarter that is going on longer. But at this moment, I think also during this quarter and during the next quarter, that build-up is really happening, and so also that base would -- I mean we cannot -- if I look for instance at the Gartner numbers quarter-over-quarter, for this quarter, I see a sequential growth of 9.5, for the fourth quarter I see 6.4. We had 42, and we had 40. I think the message here is this huge difference will not continue because you have at a certain point in time, some of these major ramp-ups are completed, and you kind of come at this, or you will then grow at a more normal growth rate. I guess the comments -- it's really a precautionary comment saying that don't expect this 30%, 40% growth rates to continue forever.

Now, at this moment you are coming all the way down to flat seems a bit extreme as well, which is right?

Maybe, let's hope so. But, well I can only repeat that lack of visibility is probably the more in quote. Normally we wouldn't even make a comment beyond one quarter, but because of this, we do see it as a little bit of a changing trend. We did want to make a very general comment, and that's about it, we cannot be too specific because we just don't know.

Okay. And then a last question, just on gross margins, the extent to which, if you have offered 59, saying if you are 59 to 61,how far is it reasonable that gross margins control?

Well, here I think it's realistic to expect they won't increase much from there. I think, well the first caller, initial customer, said that this kind of margins could even make some software companies envious. I think it's not realistic to expect that it would continue to grow. So, I think this is a higher margin, and we will do everything to keep it there, and we believe we can do so. But guiding up from here is not really what we believe is realistic.

Okay. Good, thank you very much for the time.

Thank you.

Our next question comes from -- Barbe

with

.

Yes, good afternoon, first of all also from me congratulations on an excellent set of results. Most of my questions have already been answered, in the meanwhile I have one question left. Could you give us any idea of your tax rate over the whole year?

I think this is at 25% to 30% range, it is realistic for the rest of the year.

Okay, thank you very much.

You are welcome.

Our next question comes from Jerome Ramel with RBC.

Hi, I am from KBC. Hi Antoon, I have got one more question. During your presentation you mentioned that your clients are asking for more detailed inspection tools and you mentioned the automotive market. Should I assume that your gravity product is picking up?

That is a very good analysis, indeed -- not specifically, but it is indeed true that the gravity system is typically geared towards more simple components with just like eight leads or 16 leads or something like that, and indeed there was a trend, when I gave automotive as an example, but in general chips that used to be used in PCs that are a very nice environment, with fan and everything. If the same chips are now applied in much more well stringent or even hostile environments like cars or phones or what ever, the amount of inspection and especially the kind of detailed inspection that people want to do is increasing. And so in general, indeed a product like G10 is benefiting from that trend, from for instances all kind of automotive applications. But of course that being said, it's also true for larger components as that go into cars. So, it is a general statement, but indeed also on the lower end, some components that before people did not really care for too much as far as an inspection is concerned are now becoming also more important. So, the G10 is definitely one of the products benefiting from that.

Okay, thank you very much.

You're welcome.

We have a follow-up response from James Ricchiuti with Needham & Company.

Yes, another just follow-up question. You spent a lot of time talking about some of your newer customers. I wonder if you take a step back and you look at your existing customer base, to what extent is your revenue growth benefiting or your revenue benefiting from just a normal replacement cycle that you are seeing from some of your longer-term customers and to what extent do you see that benefiting your revenues potentially in 2005?

Well, what we see now is really a -- well an engine running in all cylinders I would say. So, everything is contributing. It is new product, it's new customers, but it's also existing customers expanding capacity on existing lines with existing products. So, it's really very strong. Otherwise, of course we would not have 40% or more sequential growth twice in a row. So, that means that what will the effect be on 2005. I think there, I have to really rely more on what general market forecasters say about the general cycle and the general trends in the industry.

Are you getting any indications at all from your customers as to how they think about 2005?

Very little. We guess some. Of course in general, everybody knows that making very bold and firm statements about what the Euro weigh is very difficult to do in our industry. But in general, the few comments that we see are for a continuation of the cycle into 2005. But I guess really then I have to and then probably most of the comments that our customers make are also based on more general market forecasters, and based on things like replacement cycle for PCs, for televisions, and so on.

Okay. Do you look into -- looking out with respect to your geographic breakdown of revenues? How do you view China in 2005? All things being equal just in terms of the business potential there?

China is becoming more and more important as we speak from both a manufacturing and a sales perspective and that trend will continue in 2005. Making that quantitative is a little bit difficult but that general trend of China becoming more important is definitely there. If you look at some of the large customers that have plans for building completely new plants that have to be well installed with equipment, China will become more important in 2005, there is no just doubt.

Okay. Would be willing to say what you might be - what percent of your revenues you might be manufacturing in China over the 2005 period?

That is really difficult to do, that depends on - we have a very complex supply chain network. In fact, we have four at this point four major clusters, China is one of them, but we also have Belgium, Germany, and Singapore, some of which may accept parts for other clusters and so on. So, that's a quite complex question with a quite complex answer. But in general - and then of course, it depends on things like total volumes on product mix because we don't make everything everywhere. So, it is very difficult to make comments on that but it is sizeable, it is not that this is 10% or 20%, this is sizeable.

Okay, great. Thank you.

Welcome.

Again, ladies and gentlemen, press star then the number one for any question. Our next response comes from Peter Telston with One Investment. That question has been withdrawn. There are no further questions this time.

Okay. Then, well I would like to just conclude and say that we are of course very happy with the performance in our first quarter and we are very confident about the future. So, I would like to thank everyone for joining us today and we look forward to speaking with you again next quarter. Thank you.

Ladies and gentlemen, this concludes today's conference. You may now disconnect.