Mettler-Toledo International Inc (MTD) 2006 Q1 法說會逐字稿

Good day ladies and gentlemen and welcome to the first quarter 2006 Mettler-Toledo International earnings conference call. My name is Fab and I will be your coordinator for today. At this time, all participants are in listen-only mode. We will conduct a question-and-answer session towards the end of this conference. (OPERATOR INSTRUCTIONS). I would now like to turn the call over to Mary Finnegan. You may proceed.

Thank you. Good evening. I'm Mary Finnegan, Treasurer and responsible for investor relations for Mettler-Toledo and I want to welcome you to the call tonight. I am joined by Robert Spoerry, our Chairman and CEO and Bill Donnelly, our Chief Financial Officer. I will start by covering some administrative matters. I will then turn the call Robert, who will provide you highlights of the quarter. Bill will then cover the financials in detail and then Robert will provide commentary on our outlook and business. Of course, we will have time for Q&A at the end.

Now, for the administrative matters, first, this call is being webcast and is available for replay on our website at www.MT.com. A copy of the press release we issued today is also available on our website. You should be aware that statements on this call which are not historical facts may be considered forward-looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties that could cause actual events or results to differ materially from those expressed or implied.

For further information concerning issues that could materially affect performance related to forward-looking statements, please refer to our filings with the SEC. We undertake no responsibility to release any revisions to forward-looking statements as a result of subsequent events or developments.

One other item, on today's call, we may use non-GAAP financial measures. More detailed information with respect to use of and the differences between the non-GAAP financial measures and the most directly comparable GAAP measures is provided in the press release. I will now turn the call over to Robert.

Thank you for joining us this evening. We are pleased to announce another strong quarter. We had a [maximum start] in this year with all key assets of our financial performance well ahead of last year. Sales growth in local currency was 7% and was driven by strong performance in our laboratory products, while food retailing had a good growth as well. Growth in the industrial business was solid and on target with our expectations.

We are very pleased with another quarter of cross margin expansion and 13% increase in our operating profit. Our EPS growth on a comparable basis of 28% was excellent and cash flow generation was also very strong. Based on the strong start to the year, and the assuming market and economic conditions remaining as they are today, we have increased our full-year EPS target.

Let me now turn it over to Bill, who will take you through the details of our financial results.

Thanks Robert and hello everybody. As Robert mentioned, we had another great quarter of operating performance and are very pleased with our financial results. In fact, it is the best first quarter we've ever had.

EPS excluding equity based compensation was $0.60 per share versus $0.47 per share one year ago, and that is a 28% increase. Our reported EPS was $0.57 per share and that included $0.3 per share of Share-based compensation. In the first quarter of 2005, we did not have any Share-based compensation expense in our P&L.

Now let me go into some additional detail, starting with sales. Sales in the quarter were $346.2 million, an increase of 7% in local currency. As expected, currency had a negative impact of 4% which resulted in sales growth in reported dollars up 3%. As a reminder, currency impacts us on the sales line but we're relatively naturally hedged, and therefore do not typically see much impact on operating profit or earnings per share.

Now, let me give you more details on sales by geography and by business area. All comparisons are versus the first quarter of 2005 and all growth is in local currency. I will start with sales by geographic destination. Sales growth in Europe was 10%, one of the strongest quarters we've ever had in Europe, certainly in the last several years.

Our laboratory and food retailing business were the principal drivers of this strong growth. Growth in laboratory products was double-digit and was broad-based with most product lines showing healthy increases. While Q1 last year was somewhat weak for lab in Europe, this quarter's performance was excellent.

Retail was also up strong double-digits, as we are in the midst of some large food retailing projects. Sales growth in the Americas was up 1%. This was pretty much what we expected as we had strong sales in the first quarter of 2005 with a 7% growth. Laboratory and industrial (technical difficulty) low single digits against strong quarter -- or strong growth in the previous year. Food retailing was down in the quarter.

We remain comfortable with our full-year guidance for the Americas of 3 to 5% sales growth. I'd also highlight the order growth in the Americas was much better than sales growth. We actually had a 9% increase in order growth in the Americas this quarter. Sales growth in Asia and rest of world was up 11% in local currency. China was up 10%. Both laboratory and industrial products grew well in the area.

Turning from geography to products, let me start with laboratory products, which had another strong quarter with local currency sales growth of 8%. Balances had strong growth while analytical instruments again had double-digit sales growth. Pipettes and automated chemistry products had moderate growth. Process analytic instruments had a great quarter with double-digit sales growth. Robert is going to talk a little bit more about that later on in the call.

Sales in our industrial business were up 4% in the quarter with similar growth in both standard industrial and product inspection. Standard industrial continues to be driven by growth in China. As expected, we saw an improvement in our product inspection business as compared to the fourth quarter.

Finally, food retailing was up 12% in the quarter with strong double-digit growth in Europe and a slight decline in the U.S. We expect food retailing to be very strong in the first half of this year, but will face more challenging comparisons in the second half due to some sizable projects that we had during the second half of last year. Overall, we continue to feel this 4 to 8% growth rate we gave you at the beginning of the year is a realistic target.

Now, let me move down to the rest of the P&L. We are pleased with the 90 basis point expansion in our gross profit margin which reached 49.2%, which is a great level for the first quarter as we typically have our lowest gross margins in this quarter. Seasonally, Q1 is our lowest volume quarter, which is why gross margins are typically lowest in this quarter. The principal contributors to the Q1 expansion were volume, pricing, and disciplined cost management.

Mix-wise we had pluses and minuses. We would expect to see further year-over-year increases in gross margin throughout the year, but probably not at the high-level we had this quarter. R&D amounted to 19.9 million or 5.7% of sales. This represents a 1% local currency increase. We will probably see additional local currency growth in R&D as the year progresses as we have new R&D projects planned.

SG&A excluding Share-based compensation was 110 million, an increase of 8% in local currency. The growth was principally due to increases in variable compensation as well as continued investments and sales and marketing initiatives, especially in China. The net sum of these items resulted in adjusted operating income of $40.4 million, which is a 13% increase and 110 basis point margin improvement over the prior year.

Continuing down the P&L, Share-based comp amounted to $2.2 million. Amortization was $2.9 million, while interest expense was 4.1 million. Other income was a positive $2.5 million which principally reflects interest income on our cash balances. Just a reminder, due to the American Jobs Creation Act last year, we have cash balances in the United States and debt in Europe as we repatriated approximately $400 million in 2005 to take advantage of the onetime tax reduction on foreign dividends.

As we explained on previous calls, our balance sheet is grossed up; that is we have cash in the U.S. and debt in Europe. We will use our cash balances for share repurchases while our foreign cash flow will be used to reduce the European debt. We expect this gross up to be eliminated by the end of next year.

Let me now cover our share repurchase program in a little more detail. During the quarter, we purchased 1.2 million shares for a total of about $68 million. This represents 3% of our outstanding shares as of the beginning the year. At this time, we estimate that we will spend approximately $160 to $170 million on the program this year. We intend to continue to use our free cash flow for share repurchases, as we believe it's an excellent way to return value to our shareholders. Our capital structure remains strong and provides additional flexibility if needed.

Turning back to the P&L, our net income was $23.7 million, which resulted in an earnings per share of $0.57 which includes $0.03 of Share-based compensation. Excluding Share-based compensation, our earnings per share on a comparable basis was -- grew by 28%, a level we're very pleased with.

Now, turning to cash flow, cash flow from operations amounted to $19.1 million versus 6.7 million last year. Free cash flow, which is after CapEx and adjusted for the impact of Share-based comp, was $20.3 million versus $2.2 million last year. We had a nice improvement in working capital in the quarter which drove a significant increase in cash flows. DSOs were four days better than a year ago, while our ITO has improved to 4.9 from 4.6 last year. We are pleased with the strong start to the year in cash flow.

Now, let me update you with our guidance for the remainder of 2006. Assuming that market conditions and the economic environment remain similar to today, we expect local currency sales growth in the 4 to 6% range. As I mentioned on the last call, sales growth in the first half of the year will be stronger than in the second half principally due to tougher comparisons in the back half.

Based on the strong start to the year, we are revising upwards our full-year earnings per share target, which we now expect to be in the 3.22 to 3.27 range, and that is including Share-based compensation. We had previously communicated that Share-based compensation would be approximately $0.13 per share this year. With the improvement our stock price and the level of share repurchases weighted earlier in the year, it is likely Share-based compensation will actually be more in the $0.14 range, a small change.

Therefore, earnings per share without Share-based comp should be in the 3.36 to 3.41 range. This represents approximately 15% growth over the prior year and compares to our previous guidance of 3.30 to 3.35. For the second quarter, we would expect local currency sales growth to be at the high-end of our full-year range of 4 to 6% and earnings per share to be in the $0.79 to $0.81 per share range including equity comp. Without equity comp, earnings per share would be $0.82 to $0.84 per share. That's it from my side and now I'd like to good turn it back to Robert.

Thank you, Bill. I will start by providing commentary on the first quarter and then provided update on our marketing innovation and related initiatives. First, some comments on our laboratories business, which has a strong growth in the quarter. The growth was pretty broad-based with most product lines showing increases. Balances had (indiscernible) growth driven by full rate of new product introduction and they also benefited from an easier comparison with the prior year.

Analytical instruments had nice growth with particularly strong performance in titration and pH meters. Growth in pipettes was in line with the expectations and we continue to see very good growth internationally. In fact, we just received our largest European private order from a European pharmaceutical company.

We have recently resolved all matters related to the outstanding pipette litigation. That's also good news. Sales growth in the [autocam] business was positive while order entry was very strong. Finally, process analytics had another strong quarter of sales growth and I will speak about some of their marketing initiatives shortly.

Our industrial business came in pretty much as expected, given the strong sales growth in that business in the previous year. We have just launched a new series of industrial indicators or terminals and this will also increase the value proposition of our offering in the future. This instrument which can insure the most (indiscernible) weighing even in demanding environments feature and enhanced spam machine interface with easy to use graphics and the bright display.

The design allows for the highest [ratability] even in poorly lit environments. The instruments have flexible platforms that can connect to various systems and can be easily customized for specific needs of the user. Enhanced remote service capabilities have also been incorporated as well as (indiscernible) prompts for calibration to ensure [weighting] accuracy at all times. The value of this terminal [provided] to customer is reduced training requirements, better applications, improved productivity, and maximized serviceability.

They are partly or completely sourced in China, which allows also low manufacturing cost.

In property inspection, as expected, we did see an improvement from the level we experienced in the fourth quarter of last year and we would expect to see continued growth in the [complete] business year.

You heard from Bill that retail had a strong quarter driven by our European food retailing business. As most of you know, this business on a quarterly basis tends to be a little more up-and-down than the other businesses. We had some nice project activity in the quarter from a couple of large European retailers which drove the sales increase. Based on order entry, we expect a solid Q2 as well and also are hopeful for a solid Q3.

Our strong performance in the first quarter reflects the continued diligent focus on execution of our strategic initiatives. Let me update on some of -- further initiatives we have within Project Spinnaker. Spinnaker is a project we launched, became excellent in sales, service, and marketing. Several of you have asked at what stage we are in the implementation of this project. Spinnaker is a [long-terming] where we -- even in those business areas where we started first and where we are most advanced, we see a lot of continued opportunities to enhance our marketing innovation.

At the heart of project Spinnaker is segment marketing in which we identify and prioritize customer segments, gain segment expertise, develop tailored marketing messages and then target these customer groups. The first [piloted] segment marketing in our Process Analytics group approximately four years ago. Although first thing [to mend], Process Analytics continued to refine the marketing communications technique and we see the benefit from those enhancements.

For example, if I look at Process Analytics marketing material today, it is all very segment-specific and does an excellent job of explaining to the customer the tangible benefit of using our product in their specific application. These benefits can be in terms of cost savings, productivity improvement, improving the quality of the products they manufacture, increased safety or compliance. The marketing material shows our product in use in the customer's application, so it is very clear to the customer what we are referring to.

It also describes what our products do in these processes.

To [opening the pad] it relies on customers to determine the benefit of our product and the value they produce.

Now, we make this readily apparent by linking our products to the customer processes, specific applications and the benefits they render to the customer. I think Process Analytics' continued success is marketing, segment marketing helps explain their ability to achieve above market double-digit sales growth in the last five years. We continue to make progress in our other business units and incorporate these enhanced techniques into their marketing program.

We are completing our [tale] of marketing messages with more effective methods of regeneration. In addition to increased investment in search engine marketing and other e-marketing techniques, we recently invested in a Mettler-Toledo truck to reach our largest customers and potential new customers in Europe. We are taking marketing dollars that we previously had spent on advertising or tradeshows such as (indiscernible). And we have redirected them to visiting customers rather than having customers visiting us on those shows.

The bus has a (indiscernible) of our products, including balances, analytical instruments, the autocam product, Process Analytics solutions, and also our industrial products as well as the product inspection business. By visiting customers on the [side], we have a captive audience as compared to a trade show we are competing for these customers' attention with hundreds of other companies. We can showcase our wide range of products and also we have a tremendous chance to do the cross selling and provide hands-on demonstrations and training seminars to the many people attending.

We also have a chance to interact with a great number of our customer employees. We recently visited a large European chemical customer and had more than 120 visitors to that bus that day. And that's typically what we see every day.

It is too early to determine the payback on this marketing technique but we are convinced that it will be proving a good return. So while Mettler-Toledo does not have a Company plane, we are happy to report to you, to our shareholders that we now at least have a company truck.

Our other initiatives beyond Project Spinnaker remain also well on track. This includes new product introductions, continued growth in China. In fact we broke ground for our new facility which we will open in a little more than a year from now. Our supply chain initiative and focused inventory turnover initiative remains on track as well.

In summary, we are very pleased with our strong financial performance in the first quarter. And we remain confident that we stay on track with the focused execution of our strategic initiatives. With the strong start we had in the year and with the market conditions similar to today, we felt confident also with the revised full-year target. That's all from our side and now I would like to ask the operator to open the line for questions.

Operator?

(OPERATOR INSTRUCTIONS). Peter Lawson, Thomas Weisel.

This is Peter Lawson in for Paul Knight. Just like to get some breakout of the revenues between the lab industry and food businesses?

In terms of the percentage of those, lab is about 45%, industrial 42 and retail 13.

Okay. Do you have the actual revenue numbers?

Yes, I'd have to go multiply the numbers out. We could call you back.

I can do that. And then, what was spending like from pharma during the quarter?

That depends very much by company. I think if you look at earning announcements from pharma companies, you have seen that many -- and particular European-based pharma companies have actually very good performance. You also could see there that many of them had increased R&D spending significantly. Frankly, that's where we have seen that spending patterns. So it's not one answer for everybody, but internally we felt pharma certainly [adds] an improving environment.

And the lab business, was that predominantly -- the strength -- was that coming from large pharma or Biotech or CROs?

No, no, mainly from large pharma.

Okay thank you. I will pop back into the queue.

Derik De Bruin, UBS.

Good afternoon. Congratulations on yet another spectacular quarter. Could you just give us some idea on your interest expense projections for the year, since rate has ticked up a bit, just -- and as you are paying down debt, just what you're seeing?

Sure. We would expect that interest expense for the full-year to be and that $17 to $18 million kind of range. We're -- I know they ticked up a little bit and we built some of that in, but not anything dramatic in that number either.

Great. And do you -- what was the sequential growth in the inspection product line?

We had -- it was a little bit better than the industrial piece and industrial was 4, so product inspection grew a little faster.

Okay. And I guess, could you talk about -- I guess what type of market share gains you have been seeing as a result of some of your targeted marketing initiatives?

That probably depends a little bit by segment, but I think with the type of growth we have -- growing internal, I know at least 1.5 times the market.

I'm sorry; what was that, Robert?

1.5 times.

1.5 times the market. Okay.

And the marketing (indiscernible) is a function really of two things. Number one, of course, what we just discussed is excellent marketing programs, but the other one is really product innovation. And I guess that was what I have been saying all the time, get many product lines which are in relatively mature markets and the name of the game is to constantly innovate those products. So the trick is the replacements and the other avenue to pursue is really excellence in marketing, and if you combine those two things, you can have a very steady growth rate.

Great. I will get back in the queue. Thank you.

Richard Eastman, Robert W. Baird.

Robert, I wanted to ask you, in calendar '06 here, as the rest of the year's planned out, are -- is there a weighted number of new products towards any given quarter in terms of introductions this year? Is there any particular quarter -- is it going to be larger in terms of new product introductions?

This year it's probably a little bit more towards the middle of the year. We have some major product launches coming on the lab side. In industrial, these new terminals which I just [referred] in course of the conference call, some were launched -- the low end product were launched in course of Q4 last year. Then the others had -- one line had just been launched and the other two products, the high-end products are to come towards the second half of the year.

And in retail, we're going to have a major launch middle of the year of a midrange, high performance retail product which hopefully makes us very price competitive in kind of the middle segment, in the [center] segments, manufactured in China with much lower cost, so we'll be very competitive there. And then, in PI, we have a lot of new product in the field of x-ray products. They're coming in the course of the year.

And maybe one thing, too, Rick, to add to that is typically we roll it out not in all geographies at once. We would kind of gradually let it roll out.

And then Rick, maybe what I want to add in many of our end markets, even if you launch new products, it's not a steep ramp up. It takes a little while until the customers have accepted it. You have seen, for example, that we're reporting very solid growth numbers on balances. And that's the benefit in terms of some of the product we launched last year, where we just now start to see the full-year impact.

Okay. And how did service do in the quarter? What percentage of sales is service now?

Service did well, first of all. We had solid growth in service. We're doing a lot to focus on operational excellence and make units really productive. And that is really working [off]. Bill is just doing the math in terms of the percentage. And what did you get Bill?

28% in the quarter.

And just -- that would not be a full-year run rate. We have a higher service percentage in the first quarter because there is less product sales. You can imagine in the fourth quarter it's less because there is all the capital budget stuff in the fourth.

I understand. And the last thing I wanted to ask, just doing some quick math, if FX is neutral at the EBIT line, it looks like the conversion margin on sales to the EBIT line is about 11%. Is that number that's -- I guess it's probably seasonally influenced, but also are there any new product support costs in there? Or is there anything that's pulling that a little bit lower than it might otherwise be?

Just to make sure I understand how you did it, you compared it to Q1 of last year?

Yes, year-over-year, numerator's just the EBIT difference here and the denominator is local currency sales minus last year's sales.

Yes, I guess there's some things on the expense line that maybe make for a more difficult compare -- or this year we, for example, had a higher assumption in terms of variable comp programs. There's some small restructuring charges for example that we didn't have in the prior year, but you kind of start at the things up in the margin and they make a bit of a difference.

Okay. So it should improve as the year unfolds with better volumes I guess?

Yes, I think that to look -- I think the statistic you're looking at is a good statistic. I think you have to be careful sometimes maybe in just looking at within an individual quarter. But we actually look at similar kind of numbers on LTM bases and things, and understand kind of what you're doing and would expect it to improve, yes.

Very good, thank you. Nice quarter.

Darryl Pardi, Merrill Lynch.

Good evening. What was the contribution from pricing in the quarter on revenue growth?

Just pure pricing, we think we were in the 100 basis points range. And mix, I think I mentioned was a little bit of a plus and minus. We had probably some favorable mix on the retail side and then within the lab portfolio, maybe a little bit of a negative mix there was some of the lower end lab -- or the high -- or less margin lab products selling a little faster. Yes. But about 100 basis points.

Okay. And do you think that for the full-year that you would be able to raise prices and that about 100 basis points?

That's about the target. I think what could influence that, Darryl, if we look out over the course of a full-year, is to the extent we might have more or less large retail or T&L projects. Those, in many ways, sometimes are the -- one, it would be difficult to measure a price increase and sometimes pricing is more aggressive on those.

Yes. In that vein, the margin expansion that you generated the past three quarters is impressive in light of this growth you had in food retailing, which carries margins that are below the corporate average. I am just trying to reconcile that with your comments about -- your expectations for food retailing growth this low over the course of the year, but your comment about gross margin expansion not likely to be sustainable at Q1 levels.

Yes.

Do you understand that?

Yes, I understand the point you make. If I look for example of how our material cost indexes did in the quarter, they probably did -- I think year-on-year we're at about -- okay, material cost is not (indiscernible) (technical difficulty) cost of sales. But we're at an index of 98.4% and that's more than in the first quarter than we've built in for the full-year. Let's see how that comes out. Some of that has to do with assumptions about electrical component pricing. That would maybe be one thing for example.

And then, of course, you have -- on the pricing side, in addition to the mix away from retail, you can have some mix changes in terms of within the divisions as well, and maybe we're a little bit conservative there. Some of the new product introductions, for example, have been focused on some of the lower end segments within our product portfolio.

Okay. And what's the mix of sales in China between lab and industrial? Just (multiple speakers)

Must be at --

Much more industrial.

70% I would guess.

Yes, probably something like that.

Okay, and how do you think that's going to evolve over the next three to five years?

I would -- I think both are going to grow fast, but we probably feel like we have more market share that we could gain on the latter side.

Okay. And sorry, just last question, Bill, you mentioned orders in North America grew 9% local currency versus revenue growth of 1%. What was the mix of that order, those orders? What was driving the order growth?

We had good growth in both industrial and in retail, but I also think I -- I think actually all three divisions had better order entry growth than they did sales growth.

Michael Hamilton, RBC Dain.

Good afternoon. A few detailed ones first. Any changes in thinking on CapEx for the year?

No. No.

Share-based comp was pretty well equally loaded over the year, or do we see some skewing into first quarter?

It's kind of a rounding thing that we're getting to 14, so it a little bit depends on how the rounding -- as you know, sometimes when you do these calculations with how many shares are outstanding and where we fall. So every quarter will be 3-point-something cents per share, and one of them has to round up I guess to 4. Within a penny.

So nominally the number we're looking at in the quarter is pretty reasonable guidance for the year?

Yes. Yes.

In the past, your outlook has included your thoughts on share repurchase. Is that still true?

Correct. I mean I think just as you probably saw little bit this quarter, we did buy more aggressively in the first quarter than we -- disproportionately probably is the way to say it, somewhat reflecting that the price targets we had set in our repurchase plan fell in a way that we purchased more.

Fair enough. And then maybe if you could on the China sales, what kind of percent of the total are we seeing in terms of revenue generated out of the PRC?

Excluding Hong Kong, it's 8% of the total last year.

Okay.

A little bit less than the first quarter, just because of seasonality.

Thanks very much. Nice showing.

(OPERATOR INSTRUCTIONS). Tycho Peterson, J.P. Morgan.

Question on the retail, it sounds like there are [a few] large contracts that helped this quarter. And I guess to interpret your comments, it sounds like that was carryover into the second quarter. What's your -- what are your kind of thoughts on the U.S. side and I guess the Europe market beyond the second quarter? Can you give us some additional color on what's driving the growth there?

In Europe, we had a very strong start due to some of the bigger rollouts. We are also optimistic in Europe for Q2. And we had very good order intake in the U.S. for projects which we expect to roll out in Q3, and that's kind of the base of the guidance for the full-year for retail.

Okay. Would you be able to comment broadly speaking on M&A? You know it hasn't really been a driver for you guys, but just wondering if you have any change in thoughts on M&A for use of cash.

No, not really. You know from our past acquisitions are very much part of what we're doing. But I think as I said many times, acquisitions are not the cornerstone of our growth strategy. The cornerstone of our growth strategy is the organic growth. And we feel very confident that we live in organic growth of 5, 6, 7%, and the operating leverage we have, we can achieve very strong bottom-line growth.

In that sense, acquisitions for us are not a must but something which we pursue in a very careful way. And a careful way as I always say means looking at the strategic fit of an acquisition, looking at the financial returns of an acquisition, and then also of whether we really are operationally ready with it. And operationally ready means also that we know a way to create more value for what we just bought.

And I guess the best example to say this in a practical ways example of Rainin. Rainin we knew had a fantastic market share and an excellent technology, all U.S.-based. And we knew that they are ignoring the growth and we said we knew we can add value by taking them internationally, and I said many times Rainin did do very well in growing that business internationally. It's now close to 15, 20% of their business while at the time of the acquisition it was below 5%.

Aside from that, we have now joint R&D projects between our [balance] team and the Rainin team, the pipetting team. And we are bringing out new products which somehow integrate those technologies. One of them is this multi-channel pipette calibration system which I referred to at the previous occasion. That's how we have made it really big success for customers, for the Company, but in particular also for shareholders in generating great returns.

So current activity, of course we commence when something is ready for it. We are constantly looking at certain matters, but I also want to make it very clear to you we will deliver very solid earning growth numbers absent acquisitions.

Okay. Thank you.

There are no further questions at this time. I would now like to turn the call back over to Robert Spoerry for closing statements.

Well then let me close the call here. Thank you very, very much for attending this call. I hope you are equally happy with those numbers we're reporting today as we are. We feel we had a very strong start into the year and we feel quite confident for the rest of the year and of course, we will stay very focused on execution. And through that, make sure that we can deliver along the revised guidance we have given to you today. I wish you a very nice evening and thank you again.

Thank you.

Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Good day.