Louisiana-Pacific Corp (LPX) 2010 Q1 法說會逐字稿

Good day, ladies and gentlemen. And welcome to the Louisiana-Pacific Corporation first quarter 2010 earnings conference call. My name is Ameka, and I will be your operator for today. (Operator Instructions)

At this time, I would now like to turn the call over to Mr. Curt Stevens, Executive Vice President of Administration and Chief Financial Officer. Please proceed.

Thank you very much and thanks all of you for joining us on this conference call to discuss our results for the first quarter of 2010. As the operator said, I'm Curt Stevens, Chief Financial Officer and with me today are Rick Frost, CEO, as well as Mike Kinney and Becky Barckley, our primary Investor Relations contacts.

I'll begin the discussion with a review of the financial results for the first quarter of 2010, then I'll follow this with comments on some of our individual segments and selected balance sheet items. Rick will then take over, give you the weather report for Nashville and then discuss the general market environment in which LP has been operating. His perspective on our most recent operating results and his thoughts on the outlook for the remainder of 2010. As we have done in the past, we've opened up this call to the public and are doing a webcast. This can be accessed at our website, www.lpcorp..com.

Additionally, to help with the discussion we have provided a presentation with supplemental information that should be reviewed in conjunction with the Earnings Release. I'll be referencing these slides in my comments. We did file an 8-K this morning with some supplemental information and we just filed our Form 10-Q for the quarter. First thing on this slide-- I'd like to remind all participants about the forward-looking statements comment that is included on slide two of the presentation. Please also be aware of the discussion of our use of non-GAAP financial information included on slide three of the presentation. The appendix attached has some of the necessary reconciliations and those have been supplemented by the Form 8-K that we filed this morning. I'm not going to reread these statements but I am going to incorporate it with these references.

Slide four of the presentation is a discussion of our Q1 2010 results compared to the same quarter last year, and the prior quarter. We're reporting today a net loss for the fourth quarter of $23 million or $0.18 per diluted share. On net sales from Continuing Operations of nearly $300 million for the quarter. For the same period last year, we reported a net loss of $30 million or $0.29 per diluted share, on sales from Continuing Operations of $206 million. Adjusted EBITDA from Continuing Operations was a positive $3 million in the quarter, compared to a loss of $25 million in the first quarter of 2009. There was some movement in the tax rate on Continuing Operations between the quarters. The effective benefit -- tax benefit rate in Q1 was 31%. Primarily the result of the blended rate between jurisdictions with profits in foreign subsidiaries, tax at lower rates at losses in North American operations. Q1 of 2009 the tax benefit rate was 39%, basically a statutory rate. Had the tax benefit rate in Q1 been the same at last year, net earnings per share would have been improved by about $0.03 per share.

Let me now discuss performance of each of our segments. Slide five of the presentation is a summary of OSB. OSB had an operating loss of $5 million in the quarter compared to a $24 million operating loss in Q1 of 2009.. For the quarter we had a 34% increase in volume, and an average sales price that was 26% higher than the same quarter last year. This resulted in a $24 million improvement in earnings and adjusted EBITDA. The strengthening of the Canadian dollar which increases our costs more than revenue due to sales being in the US hurt our earnings in this segment by about $5 million compared to Q1 of last year. Adjusted EBITDA from Continuing Operations in the OSB segment for the quarter was a positive $4 million, compared to a loss of $17 million in Q1 of last year. Compared to Q4 of 2009, volumes were lower by 14% while pricing increased by 22%.

Volumes in Q1 were constrained by the availability of logs in the US south, due to extremely wet weather conditions that occurred during the quarter. Slide six of the presentation is our siding segment which includes our SmartSide and Canexel siding products and commodity OSB produced at our Heyward Mill. For the first quarters siding had operating income of $9 million, significantly better than the $2 million reported in the same quarter last year. Adjusted EBITDA from Continuing Operations in the siding segment was $14 million, compared to $7 million in Q1 of 2009. For the quarter, sales were up 20%, and unit volumes were better by 29% in SmartSide, and down by about 15% in Canexel compared to the same quarter last year. Reductions in volumes for our Canexel product line was caused by our decision not to run one of the production lines while working on process improvements. This has limited our available product and customers are on allocation in Canexel.

For the quarter, SmartSide average sales prices were up slightly due to product mix, with individual product pricings remaining relatively flat. Canexel prices show a pretty significant increase of 24%, but this is largely due to this product being sold in Canada and the strengthening of the Canadian dollar increased the US equivalent sales price. Slide seven of the presentation, our engineered wood which includes I-Joists laminated strand lumber producted at our Holt main facility, laminated veneer lumber plus other related products. Segment also includes the sale of I-Joists and LVL products produced by the Abitibi JV are under a sales arrangement with Murphy Plywood. For Q1, (inaudible) recorded a loss of $7 million compared to a loss of $9 million in Q1 of last year. Adjusted EBITDA from Continuing Operations in the EWP segment was a negative $3 million, about half of what we recorded in Q1 of 2009 and Q4 of 2009.

Volumes of I-Joists were up significantly, 88%, while LV-LSL were up 45% compared to the same quarter last year. Increases were tied to the increase in housing as well as during the quarter we did see significant inventory building in the channel after dramatic reductions in 2009. Pricing was down slightly in I-Joists but up about 4% in LV-LSL Our other building products, this category includes our interior molding business, our South American operations and the US Green Fiber joint venture, and some nonoperating facilities. Overall we were slightly positive in the first quarter of 2010 as compared to income of $1.6 million, first quarter of last year.

For the quarter, sales for these operations were $41 million, up 45% from the $28 million reported in Q1 of last year. Some other items, we did have a small foreign exchange gain in the quarter, compared to $2.6 million gain in the same quarter last year. Investment income in the quarter was about flat between periods, with returns down significantly but cash balances were higher. Interest expense was nearly $17 million in the quarter, compared to $13 million in Q1 of 2009. This is primarily due to the higher cost refinancing that we completed late in Q1 of 2009.

Slide eight of the presentation shows some balance sheet items. Cash, cash equivalents, investments and restricted cash were $414 million into the quarter, working capital about $520 million. We had net cash over debt of $136 million, and capital expenditures were relatively modest, $4 million in the quarter. Book value per ending share was $9.73. I do want to mention as I did in our earnings call at the end of -- in February that we did have a balance sheet gross-up that occurred in Q1 and was reflected retrospectively for prior periods. This was due to a change in accounting standard. We added back our previously qualified special purpose entity, an entity called LP Pinewood that was off-balance sheet and now it's back on the balance sheet. This entity was put in place in 2003 to defer the income taxes paid on the sale of LP Southern Timberland.

By adding this back, we increased our assets by $368 million, increased our liabilities by a like amount and reduced equity by about $1 million. The overall transaction has been disclosed since the inception in our footnotes but is now included in the balance sheet. Just as a note, the associated debt has little or no recourse to LP as it is backed by a letter of credit which is subsequently backed by cash. A few other comments before I give it to Rick. Our federal tax refund as we discussed in the last call, we did do a rapid filing of our 2009 federal income tax return and received an refund of about $47 million during the quarter.

The balance sheet shows the remaining income tax receivable of about $6 million that will come back to LP over the next year or so. On the auction rate securities based on valuations received from third parties, we did increase the value of this portfolio by $10 million in the quarter. And as you know, we are continuing to pursue the litigation filed against the principal issuers of these instruments. With that, let me turn it over to Rick.

Good morning, everyone. It is drizzling here in Nashville but we are drying out after a w of sunshine last week. I'm sure that you did see in the news that we had severe weather and a lot of rain in the middle Tennessee area last weekend and we had flooding of I guess unprecedented nature. It was the worst flooding in history. I am happy to report and relieved to report that we were fortunate that no LP employees suffered significant flood damage but the town will take some time to recover. I want to begin my brief prepared remarks this morning by adding a little bit of color to Q1 but not be redundant to what Curt has already said. On the safety front, we got off to a great start in the year with only two recordable injuries across our system in Q1, and a TIR of 0.23.

Other most significant event was that our Carthage OSB mill became the first OSB mill in history in North America to exceed one million incident free work hours. Overall financially we did eke out our first positive adjusted EBITDA quarter, Q1, since 2006, which felt good. The housing market ended the quarter with seasonally adjusted starts, single family starts of about 530,000. Each of our three core businesses did improve financially, from Q1 of '09, which was granted a pretty low hurdle to jump over, but they also improved over Q4 of 2009 as well. Make a few comments on each of our reporting segments for Q1. OSB did surprise us in Q1. Our customers' needs were more robust that we had anticipated going into the quarter. Random lengths print across the six different sales regions moved upward $60 to $65 on a 7/16th inch basis during the quarter.

Because of the lag effect which is the time between order and delivery, we weren't able to capture all of that move but what we did capture helped us considerably. Our [Insville] OSB Alabama mill was down 42 days in Q1 for log outages resulting from weather that was adverse to logging. Our TechShield radiant barrier OSB roof sheeting was up 50% over Q1 '09 and our top-not subflooring was up 24% from the same quarter last year. We did have two mills that were indefinitely shut down during the quarter, [Chambord and Clarke County], and the rest of our mills ran on various shifting schedules. In siding, our SmartSide volume was up about 20% over Q1 2009, with slightly stronger sales price due to mix, and we think that bodes well for us for the rest of the year. As Curt mentioned, our Canexel fine fiber product remains on allocation, as we work to get our production scheduling back in balance. In engineered wood products, the segment which is most heavily tied to new residential construction, we improved which means we lost less money. At these volume levels, this is still a distressed business segment.

Plaguing this business at the present are the lack of starts and component raw material prices which are out-stripping finished product pricing. As you know, I-Joist is made from OSB web stock and flange lumber and LVL is made from peeled veneer. All three of these core components have increased substantially in price, more so than finished product pricing. In Chile, which I had an opportunity to visit in the first quarter, the earthquake affected our Lataro Mill adversely with about a 17 day outage, but at present both of our Chilean mills are running full to feed the reconstruction effort that is needed there.

Spend a few moments looking forward in terms of what we see coming at us and then we'll open it up to questions. Obviously, the recent run-up in OSB pricing is going to positively affect the financial performance of our OSB business and LP overall in Q2. It has certainly been unexpected but even at these demand and take-away levels, it is very significant to us. The housing market has experienced a welcome bump if you will. However, from what I read, it is unlikely that substantial recovery towards the base underlying housing demand will be significant in 2010. I just reviewed a recent composite of the 2010 start forecast put together by APA, and that still does not break the 700,000 start level for 2010. Although [Reesie] is still the outlier on this, having end of the year start level at about 850,000.

A couple of questions for us are yet unanswered. First is how much of the current housing activity is a pull-forward caused by tax incentives. And the second is the channel building a little bit more of a position for the summer. Meanwhile, we are still looking at four large problems in the eye, the four that we have been looking at for a year now. The first is high unemployment which last week came in at 9.9%. Continued foreclosures in excess for sale inventory of existing homes and in general slower household formation. And because of these elements, we are still being quite cautious with our optimism around this recovery. That said, I'll turn it back over to Curt for the question period. Thank you, Rick. Ameka if you could poll for questions.

Thank you. (Operator Instructions) Your first question comes from the line of Gail Glazerman with UBS. Please proceed.

Hi. Good morning.

Good morning.

Rick, can you just maybe a little bit more thought on exactly what drove the surprising price performance in the first quarter and how you see that playing out?

Well, we had anticipated as we put our production scheduling together a pretty lackluster first quarter and demand came at us a little bit heavier than what we thought. We were only able to meet that demand as we had put production on and when demand's a little bit higher than the ability to supply it on a traded commodity, it moves it forward.

And so it -- I think one of the analysts wrote about a demandless recovery. It wasn't huge. It wasn't demand that we felt back several years ago. But it was a little bit more than we could supply. That allowed our traders the opportunity to ask more for the product out in future weeks.

Okay. And I guess there was a specific comment about I-Joist inventories being built up. Is that something that happened in any of your other product areas?

We built a little bit of inventory in Q1 in OSB, not particularly significant, because we don't have the capability to build a lot but I think we built about 20, 25 million feet of inventory in OSB. I think Curt's reference to I-Joist was the channel seemed to be replenishing their inventories after dragging them down so severely at the end of Q1 -- the end of the fourth quarter.

Yes I'm sorry. That's what I was asking. Do you have a sense of I guess where inventory channels are for OSB and siding?

My sense right now, and we don't -- we're kind of in the middle of trying to guess at this, but we are wondering whether the channel is taking a little bit more of a position right now than what they were able to do earlier. But I can't tell you that emphatically. It's certainly something that I'm watching.

Okay. And what was your operating rate in the quarter in OSB?

Well, I'll answer that with a caveat of I've come up with a new term that I call effective capacity, which basically means taking the mills that are currently running and coming up with an operating rate of that, rather than of all the capacity that could be running. And our effective operating rate last quarter was around 60%.

Okay. And it's the two lines that are down.

This leaves the mills that have been indefinitely curtailed --

I know, I know. It's the two -- it's just Chambord and Clark County that are down, right, at this point that aren't included in that base.

(inaudible)

Okay. And just I mean what sense would that -- the weather generally drying out, maybe not so much by Nashville that you would be able to ramp that up a little bit in the second quarter?

Well, we'll have to see whether we get the orders for that. At this point in time I just don't know. Right now, we seem to be relatively stable.

Okay. And just last question. Curt, can you give any sort of update on asset sales. I know there was something small in the quarter but is there anything else pending that we should be looking at. You're still holding a decent amount for sale.

Right. I continue to look at that as well, Gail. Financing continues to get in our way. We haven't had any of the buyers, the potential buyers of the two biggest assets fall out but it's been slow in gathering the cash. The asset sale we sold was a relatively small one. So we're still anticipating it's going to come in in the next quarter, but I said that last quarter too. So you need to take that with a grain of salt.

Okay. Thank you.

Your next question comes from the line of Mark Weintraub with Buckingham Research. Please proceed.

Thank you. I was hoping you could just walk through in a little bit more detail how your prices lag what we see in random lengths and how that could play out at least through the first part of the second quarter, that part which is already visible?

Yes, Mark, I'll take a shot at that and then if I miss something, Curt can fill in the holes. If you look at Q1, you guys get various amounts of information but I'll refer to random lengths print. The year north central began on a 7/16 ths basis at 182 and I think the quarter ended north central 7/16 ths at 248. There are six different sales regions and prices during the quarter varied between $10 and $15, up or down from each other in those sales regions. In the first quarter, the north central was higher than all the other regions, except for Western Canada.

So a weighted average of sales may not equal the north central pricing that some people seem to pick and look at excessively. There's also a lag on pricing for open market wood. The way this works is as order files extend, an order taken in one week may not actually be delivered for four weeks. So in a climbing pricing environment, this creates a lag in terms of getting what may print on a Friday, it may take you however long your order file is out to capture that particular price. So if the market moves very, very quickly, you stay behind it.

There's another influence that we had in terms of looking at that and that is that our value added products tend to lag the market as well because the price in these products changes less rapidly. We did have a high component of value added in Q1 with TechShield and Top Notch. And then finally, I think the other thing that influences price, particularly as price becomes higher, is that there are discounts on contracted wood on a percentage basis, so at a higher number those percentages are higher dollars. So that's what happens when the market moves very, very rapidly in the up direction.

Great. A couple follow-ups on that. So can you give us a sense as to what as to what percent of your wood is open market versus contracted.

That's not a number that we have put out. I don't think I would want to let that go, competitively.

Okay, have you put out what percentage would be value added?

Yes, in our first quarter I think we had about 30% of our mix was value added.

Okay. And then can you give us a sense as to how your order files progressed during the quarter and where they are now?

I haven't given that number out competitively either. I apologize for that, but it's just not within our best interest to do that.

Understood. And then lastly, I don't know if there's any help you can provide in terms of given -- perhaps if you could tell us where your average pricing in April was, relative to your first quarter, to try to give us a sense as to what the impact of the lag in the second quarter that's already visible might be?

I think I'm going to be general there as well, but obviously you saw the rapid escalation in April and as time gets farther from that, the more of that we would capture.

Okay. Thank you.

I'm sorry to be so vague.

I understand.

I'm sure you understand.

Your next question comes from the line of Peter Ruschmeier with Barclays Capital. Please proceed.

Thank you and good morning.

Good morning, Pete.

I had a question similar to the question on the order backlogs and how it affects the OSB price. Can you help us understand your raw material pulpwood costs and whether we've seen the full effect of the higher pulpwood cost or whether there's more of that in front of us.

Actually in Q1, if we take the volumes that we purchased in Q1 of 2010 and applied pricing from last year to that, we actually were slightly positive in wood cost. The problem we had in Q1 was getting the wood. There wasn't any wood available and that's why we had the down time in the Southern mills. But in general, because we operate both in -- as you know, in Canada and the US, in lake states we do a lot of logging during the winter in the north and that wasn't affected by the weather at all. Our costs actually were down a little bit and as I look forward, I think they're going to be relatively flat, maybe up a little bit in Q2, but not a lot.

Okay. And how are you doing in terms of fiber, are we close to getting that fiber back up?

It's still wet down there. We would expect to run a lot more than we did in Q1.

Okay. Rick, I don't know if you care to comment on Chile and Brazil. Maybe you can touch on the earthquakes and what that's done, if anything, to the supply chain, what you're seeing in the marketplace and just your progress on your Chile, Brazilian strategy.

Yes, I'd be happy to. I think in terms of Chile, from what we can tell, it looks like about 300 residents -- 300,000 residences were destroyed in that earthquake, which is somewhere in the neighborhood of 10 years' worth of building. So in terms of what that's done for us, if you remember on the last call, I said we had just started Lataro which is our second mill up, in hopes of running it for the rest of the year. We now feel quite confident that we will run both mills full-out for a considerable period of time to help in that reconstruction.

So we did start Lataro up between Christmas and New Year's. Right after the earthquake, we added the fourth shift there as quickly as possible. So both (inaudible) and Lataro are running full. The other positive thing out of this catastrophe was that wood construction held up quite well. So we think that it will continue to help us in our effort to convert building practices in Chile. We did send about four million feet down from Canada to Chile in the immediate relief effort and with some help to our Brazilian operation, we're moving a couple thousand cubic meters a month over from Brazil.

So Chile looks to be full speed ahead with both mills for the foreseeable future, meaning I would think at least a couple of years. In Brazil, we are running our [Potogrossa] Mill at about 50% of capacity. When we bought that mill, it was in need of some improvement. We do have one drier and one thermal oil system which is down and we are looking to perhaps start that drier and that thermal oil system up somewhere in the fourth quarter to continue to fill in the success that we're having in selling OSB for nonconstruction purposes in Brazil. And a concurrent effort, we are working through the bureaucratic red tape to qualify a building system in Brazil, what we're calling an OSB building system, which is if we're successful there would allow us to then put LP OSB into that building system.

There's huge pent-up demand in Brazil as I talked about last year and why we went there, currently of about seven million homes, and the need is projected for about 18 million homes over the next decade. So we think that that's going to continue to get more attractive for us, but right now we're caught in this bureaucratic red tape. In Brazil they don't approve single products in their regulatory environment. They approve building systems, so we've been working on that now for about five or six months and hopefully we'll break through sometime this year.

That's very helpful. Maybe just lastly, I'll turn it over, I think some of the capacity that you've had feeding the Chilean market was really seeded from North America and I guess related to that, I'm curious on your strategy for Chambord. It seems like you have many lower cost mills in your system that would likely come on before Chambord would. Given your somewhat cautious statements about buying into the recovery or strong recovery in housing starts, how do you think about the future of that mill?

Well, to your first point, we only moved about four million feet from North America down to Chile, which was to help until we could get [Peggy] up. To your second question, I think first on our radar which would be obvious is that we did spend a couple hundred million dollars on building Clarke County, and that will be our most important issue to try to get utilized as the market comes back to us.

Thanks very much.

Did I answer your question?

That's helpful. Thanks.

Your next question comes from the line of Paul Quinn with RBC Capital Markets. Please proceed.

Yes, thanks very much and just a couple questions. One on value added, you said 30% in Q1. Can you give us some comparisons, Q4 and Q1 last year?

Q4 was about 24%, so we were up a bit in Q1. That could be seasonality, Paul, as much as anything else.

But in terms of Q1 '09, our TechShield was up 50%, and our Top Notch subflooring was up 24%, quarter to quarter. That's Q1 to Q1.

Great. And in terms of -- (inaudible) talked about this supply related price increases in OSB. What have you guys seen on the demand side, especially from your customers? Is it higher pull-throughs? Are you seeing things recover slightly faster than the current numbers indicate?

I'm not seeing that. What we have felt so far is just a slight imbalance between what we thought we could produce and what was being asked of us. But in terms of any great underlying pull, I mean, I think the numbers speak for themselves.

We finished the first quarter at 500 -- at annualized rate of 530,000 single starts so that's not terribly robust. What we're trying to figure out is was any of that pull-forward from these tax incentives and then what's going to happen in historically Q3, which is prime building time but we've seen permits go up just a little bit but nothing that would knock your socks off. So as I said in my prepared remarks, I don't have a consensus forecast that says single family starts or all-in that we're even going to crack 700,000 this year. With Reesie being the outlier and they're saying we'll end the year at 870. So right now, we're in a wait and see mode and we're being quite careful.

The only thing I would say to that is we did see both January and February starts get adjusted upwards in later months and I wouldn't be surprised if March gets adjusted upward.

Okay. That's all I had. Looks like you're having fun in Q2. Thanks.

More fun in Q2 than Q1.

Your next question comes from the line of Chip Dillon with Credit Suisse. Please proceed.

Hi, good morning.

Good morning, Chip.

First question is as you think about your capital spending, you might have mentioned this earlier and I missed it but what does it look like not only for this year but as you think about 2011, I know it's early days but you're probably starting to think about it. Sort of what kind of range do you think we could see next year? Do you think the market's so good that you might pick it up substantially or are you going to be more cautious?

Well, what we said for 2010 is we would be in the 20 to $25 million I have no expectation it's going to be any different than that. Next year, probably the biggest piece is the completion of the Brazilian acquisition. We have 75% of that mill and there is a simultaneous put in call in November of next year so I anticipate we would pick up the other 25% of that mill and that's in the neighborhood of probably 18 to 25, somewhere in there.

So that will certainly be in the plan. And then I think we've talked about some of the maintenance we need to do on the presses, which are -- that's probably the biggest maintenance expense you have in an OSB mill. And we do have a press or two that we're going to have to look at at over the next two years. I don't know if that would be a 2011 or 2012 and those are generally right around $15 million to redo all that.

Okay. And --

I don't have anything of great significance because we have existing capacity in front of each one of our businesses.

Right. Now, as you think about your -- obviously, as you said, next on your plate in terms of ramping up if the demand's there, if we see housing starts recover nicely would be Clarke County. What would sort of be behind that? Would there be other plants that you've had down for a period of tame that you would put sort of next in line?

Well, the two that are in line are Clarke County and Chambord. And I think what Rick said is we would certainly like to get a return on our investment in Clarke County and if you -- I mean, you don't have to be a genius to figure out why we made t Athens and Silsby, Texas permanently curtailed because the Clarke County mill can satisfy those two market areas.

Got you. And then when you look at the -- I know you talk about receivable you put back, like $400 some million on your balance sheet.

Right.

A, was that tied to timber sales in the past?

Yes.

And when does that become cash?

Yes, it was a 2003 timber sale that we did so there's a note receivable and the note payable with an investment by LP of about $45 million. So the receivable is greater than the payable. When we did that in 2003, the rules required us to make that an off-balance sheet transaction and a qualified special purpose entity. They changed the rules effective January 1st, which changed the rules back to where it used to be, and so we had to add those back on to the balance sheet.

And when do they turn to cash?

It was a bullet 15 year, so in 2018, what will turn into cash for us is the $44 million investment. The rest will self-liquidate.

Got you. That's in like you said 2018.

2018, right. And then as you know, we'll owe the deferred tax then too.

Got you.

We'll get the cash in but we'll have the deferred tax on the gain.

That's roughly how much?

It's in the 10-K. I don't have it right in front of me. Remember, there's three different transactions. There's the California, -- the two California sales and this one that are all in the deferred tax. I don't have the schedule right in front of me. If you give Mike a call, I think it's in the K.

The last question on this is when this downturn, was there anything you could do to accelerate sort of the termination of some of these installment sales so that they, if you will, closed during a period where you didn't have much of a tax liability, if any?

We looked at that but given with our expectation of profits in the future, we're actually in pretty good shape. We have a bullet payment that comes due this June of about $115,000 -- $115 million, rather. So that's coming at a good time for us.

Got you. Thank you very much.

At this time, there are no further questions in queue. I would now like to turn the call back over to Mr. Curt Stevens for closing remarks.

All right. Well, thank you very much for participating. I hope that the improvement in Q1 is a look at better times ahead, given pricing in Q2. Certainly looks that way to me. So thank you again and if you have follow-up questions, Mike and Becky are available. Thank you.

Ladies and gentlemen, this concludes the presentation. And you may now disconnect. Thank you and have a good day.