Solaredge Technologies Inc (SEDG) 2015 Q4 法說會逐字稿

Welcome to the SolarEdge fiscal fourth quarter and year ended June 30, 2015 conference call. This call is being webcast live on the Company's website at www.solaredge.com, in the investor section on the event calendar page. This call is the sole property and copyright of SolarEdge, with all rights reserved and any recording, reproduction, or transmission of this call without the express written content of SolarEdge is prohibited. You may listen to a webcast replay of this call by visiting the events calendar page on the SolarEdge investor website. I would now like to turn the call over to Erica Mannion, at Sapphire Investor Relations, Investor Relations for SolarEdge.

Good afternoon. Thank you for joining us to discuss SolarEdge's operating results for the FY15 fourth quarter, the full fiscal year ended June 30, 2015, as well as the Company's outlook for the FY16 first quarter. With me today are Guy Sella, Founder, Chairman, and CEO; and Ronen Faier, Chief Financial Officer. Guy will begin with a brief review of the fiscal fourth quarter and the year-end results. Ronan will review the financial results for the fourth quarter and the year end and provide the Company's outlook for the first quarter of 2016. Then we will open the call up to questions.

Please note that this call will include forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from management's current expectations. We encourage you to review the Safe Harbor statements contained in our press release and slides provided today for a more complete description. All material contained in the webcast is the sole property and copyright of SolarEdge Technologies, with all rights reserved. Please note this presentation describes certain non-GAAP measures, including non-GAAP net income and non-GAAP -- non-diluted EPS, which are not measures prepared in accordance with US GAAP.

The non-GAAP measures are presented in this presentation, as we believe that they provide investors with a means of evaluating and understanding how the Company's management evaluates the Company's operating performance. These non-GAAP measures should not be considered in isolation from, as substitutes for, or superior to financial measures prepared in accordance with US GAAP. Listeners who do not have a copy of the release sent out today may obtain a copy by visiting the investor section of the Company's website.

Now I will turn the call over to CEO, Guy Sella.

Thank you, Erica. Good afternoon and thank you for joining us on our conference call. I am happy to report that we concluded our fiscal fourth quarter with strong results. We are reporting record revenues for the quarter of $98.4 million, our gross margin was 28.7%, and most important, we show a record net income of $9.3 million and a non-GAAP diluted earnings per share of $0.31. Let's look at what has guided these positive results.

Our revenues hit a record high this quarter. Despite a pressure on pricing, which we reported last quarter, the healthy demand for our products from both new and existing customers assisted us in maintaining a stable ASP. This quarter, we shipped 284 megawatt of AC nameplate inverters, approximately 193 megawatts of which will ship to the North America. Overall, we shipped over 1.1 million power optimizers and 44,000 inverters, a significant increase from last quarter. This increase was enabled by strong market demand and continued expansion of our manufacturing capabilities.

Just to give you small flavor of market growth, our nameplate AC megawatt shipment to Germany increased by 65% when compared to the third fiscal quarter, and by 34% when compared to the same quarter last year. This, despite a decline in the size of the [pb] market in Germany. In addition, our nameplate AC megawatt shipments in the Netherlands increased this quarter by 89% when compared to the third fiscal quarter, and by 290% when compared to the same quarter last year.

During the quarter, we also reached a significant milestone in the automation of our production line. I will further elaborate on that in a few moments. Looking at our year-over-year figures also revealed strong results. We are reporting record annual revenues for FY15 in excess of $325 million compared to $133 million in the FY14, and an annual net income of over $21 million compared to a net loss of $21 million in FY14. In the FY15, we had consecutive positive revenues in growing net income quarter over quarter, and we are very proud of these results.

Over the past four quarters, we continued to grow our market share in both the United States, as well as in most European markets, including Germany, the UK, and the Netherlands. During the year, we added to our strong North American management and experienced management team in Europe that is well-positioned to continue to grow our business there. During FY15, we shipped approximately 3.5 million optimizers and 150,000 inverters, which is more than 2.5 times what we shipped in FY14. And of course, this year we concluded our successful IPO and launched the trade of our stock in the NASDAQ on March 26.

I want to take this opportunity to address some noteworthy matters. We are seeing significant growth in sales to the commercial market, both in the United States as well as in the rest of the world. In the United States alone, we sold a more than 40% increase in the shipment of commercial three-phase inverters this quarter, compared to third quarter FY15. Another example of this expansion from the past quarter is a 5 megawatt ground mount project installed and successfully commissioned in Turkey.

As part of our growth in the commercial segment, we have further expanded our product offering by the release of our new three-phase 25 to 33 kilowatt inverters. These new inverters continue the evolution of our inverter offering. With this line of inverters, we continue to enlarge the output power capacity of each inverter class by developing a new power topology, which improves efficiency, reduces heat dissipation and allows us to concentrate more power into the same inverter shafting, and by this to improve a step-up function, the cost per kilowatt peak of our new inverter line. The new line of inverters facilitate the natural expansion into even larger commercial projects, and we are already seeing significant demand for these new inverters.

Our research and development team continues to work on new improved products, the largest set of monitoring features, and the cost-reduction technology. One notable development, of course, is our collaboration with Tesla, which is progressing as planned. I am pleased to announce that we expected to have Tesla-ready inverters, both grid tied, known as on-grid inverters in Europe, as well as full backup solution available for sale in the fourth calendar quarter of 2015, for both European and the US market.

During this quarter, we continued to improve our manufacturing capacity, and to that end have made significant progress on two new fronts. We are in the process of building a manufacturing line in Mexico with one of our contract manufacturers. This quarter, we manufactured PCB assembly of our products in the new facility, and we expect that by September, we will reach the final assembly stage of our products at small volumes for testing, performance, and quality verification.

We're happy to update that we completed the development of our first end-to-end automated assembly line for our power optimizer, and the line has been assembled in our contract manufacturing facility in Hungary. We are currently in the initial ramp-up stage of this line, and we hope and expect that by the end of this calendar year, it will reach full manufacturing capacity, yielding over 5,000 optimizers per day. This milestone will significantly increase our manufacturing capabilities and further improve product quality.

Before I conclude, I would like to take a moment to express my appreciation and sincere gratitude to my management team, our leadership in North America and Europe, and to all of our dedicated employees worldwide who have been working far beyond their formal duties in order for us to reach this excellent fiscal year-end results.

And with this, I hand the speaker over to Ronen who will review our financial results.

Thank you, Guy.

I will start with a detailed overview of our fourth fiscal quarter and full year of FY15 performance, and then provide guidance for our first fiscal quarter of 2016. While the overview will be on a GAAP basis, in certain cases, I will be discussing non-GAAP numbers, which excludes the impact of stock-based compensation, as well as other non-GAAP measures, such as non-GAAP earnings per share. Full reconciliation of the pro forma results discussed in this call to GAAP results is currently available on our website and in the press release issued today.

Now let's discuss the results of our fourth fiscal quarter financial performance. Total revenues for the quarter were $98.4 million compared to $86.4 million in the last quarter and $44.6 million in the same period last year, representing an increase of 13.9% compared to the prior quarter and 120.8% for the same period last year. Focusing on some drivers of revenue, we sold, this quarter, to more than 120 direct customers in more than 30 countries. Sales in the US market represented approximately 72% of our revenue.

Gross margins for the fourth fiscal quarter were 28.7% compared to 27.4% for the third fiscal quarter, and 19.6% for the same period last year. These gross margins extension is mainly attributed to cost-reduction measures and economies of scale from increased production volume. In addition, we continue to reduce air shipments compared to ocean freight, and this ratio now is at the natural minimum level where we expect it will remain going forward. Improved exchange rate between the dollar and the euro compared to the last quarter also positively impacted our margins compared to the last quarter, and we're continuing our efforts to naturally hedge our manufacturing costs of product for European sales with local sourcing denominated in euros.

Moving to operating expenses, research and development expenses were $6.7 million, an increase of 22.1% compared to the third fiscal quarter, and 46.6% year over year. Sales and marketing expenses for the quarter were $7.4 million, a 15.7% increase compared to the previous quarter, and a 37.1% increase on a year-over-year basis. G&A expenses increased to $2.3 million this quarter, a 13.8% increase compared to the third fiscal quarter and 92.9% on a year-over-year basis. This G&A increasing expenses was mostly related to public Company expenses and one-time expenses related to the move to our new headquarters. In total, operating expenses for the fourth quarter FY15 were $16.4 million, an 18% increase compared to $13.9 million in the previous quarter.

Operating income for the fourth fiscal quarter was $11.9 million compared to an operating income of $9.8 million in the previous quarter and a loss of $2.4 million for the same period last year. Financial expenses for this quarter were at $1.7 million compared to $3.4 million in the second fiscal quarter and $0.5 million for the same period last year. Of this amount, $3.3 million are related to a mark-to-market adjustment of certain warrants granted to a lender in relation to a long-term debt taken in 2012.

These warrants were exercised during the fourth quarter, and we, therefore, do not expect any such financing expenses in the future. This amount was offset by an income from hedging position against the Israeli shekel and euro-denominated balances. This quarter we also incurred other expenses of $100,000 related to a write-off of fixed assets associated with the move to our new offices.

Our GAAP net income for the fourth fiscal quarter was $9.3 million, compared to a net income of $6 million for the second fiscal quarter this year and a net loss of $3 million for the fourth fiscal quarter of last year. Our non-GAAP net income was $13.8 million compared to a non-GAAP net income of $8.7 million in the previous quarter and a non-GAAP net loss of $2.8 million for the same quarter last year.

Net diluted GAAP EPS was $0.21 per share for the fourth fiscal quarter, compared with net diluted GAAP EPS in the previous quarter of $0.01, and $1.08 net diluted GAAP loss per share for the fourth fiscal quarter last year. Non-GAAP net diluted EPS was $0.31, compared to a non-GAAP net diluted EPS of $0.20 in the previous quarter and a non-GAAP net diluted loss per share of their $0.10 in the fourth fiscal quarter of 2014.

Turning now to the balance sheet. As of June 30, 2015, cash and cash equivalents were $144.8 million compared to $135.2 million at March 31, 2015. As of June 30, 2015, SolarEdge had no outstanding debt. During the fourth fiscal quarter, we generated $15.7 million cash from operations. The majority of this cash generation was related to reduced DSO of our accounts receivable balances, offset by an increase in inventory and a moderate increase in accounts payable. As of June 30, our inventory level was at $74 million, a level that is sufficient to keep air shipments at a minimum.

And now, let's turn to summarize of FY15. Revenues for FY15 were $321.1 million -- $325.1 million, 144% increase compared to revenues of $133.2 million in FY14. Revenue from the sale of power optimizers represented 48.8% of our total revenues, while inverter sales contributed another 48.3%. The remaining amounts is related to the sales of other products and recognition of revenues from our cloud-based monitoring portal services. On an annual basis, in FY15 revenues from the US market consisted of 73% of total revenues compared to 48% in 2014. Sales in Europe represented 20% in FY15 compared to 40% in 2014. Our gross margins for 2015 were 25.2% compared to 16.5% in FY14. This increase was mainly attributed to cost reduction, a reduction in the ratio of air shipments to ocean freight, and a better economies of scale related to our increased production volume.

With regards to operating expenses, our expenses related to research and development grew by 20.6% compared to the previous fiscal year to $22 million. Sales and marketing expenses for the year were $25 million, a 40.4% increase compared to the previous fiscal year. G&A expenses increased by 52.2% compared to the previous year. Total operating expenses for FY15 were $53.5 million, a 32.7% increase compared to $40.3 million in 2014. Operating income for FY15 was $28.3 million, compared to an operating loss of $18.4 million in the previous year.

Our GAAP net income for the fiscal year was $21.1 million, compared to a net loss of $21.4 million in the previous year. Our non-GAAP net income was $29.4 million compared to a non-GAAP net loss of $20.4 million in FY14. Net diluted GAAP EPS was $0.27 for the fiscal year compared with net diluted GAAP loss per share in the previous year of $7.64. Non-GAAP net diluted EPS for FY15 was $0.77, compared to a non-GAAP net diluted loss per share of $0.70 (sic -- see press release "$0.76" in FY14). During FY15, we generated [$12.1] million from operations, despite the strong growth in AR and inventory levels in the various regions. Our guidance for the first fiscal quarter of 2016 is as follows. We expect revenues to be within the range of $108 million to $112 million and gross margins to be within the range of 27% to 29%.

I will now turn the call to the operator to open it up for questions. Operator?

Thank you.

(Operator Instructions)

Brian Lee, Goldman Sachs.

Hey guys. Thank you for taking the questions, and congratulations on the good quarter.

I had a few, a couple on the gross margins to begin with. Ronen, this is the second straight quarter where you beat the high end of the gross margin guidance. How should I be thinking about what's baked into your guide for the Q1 quarter, in terms of mix and pricing assumptions? And are you adding any additional conservatism than what you've included in the past couple of quarters?

Actually, first of all, Brian, thank you very much for the question. Actually, when we look at the gross margins, we usually look at the plan that we have for the next quarter, which is based on the current prices as we see them in the market right now. Because, as we know them already, given the fact that we have the inventory levels and we know the pricing for the next quarter and the other expenses, which we pretty much know.

The only unknown effects usually that we have are mostly related to fluctuation in exchange rates between the various regions, and sometimes the composition of the mix of what will be exactly recognized a little later. Therefore, we do not actually bake a conservatism, rather than being responsible guiding at what are the gross margins that we feel comfortable as of our plan, with taking into assumption what could reflect -- what could be reflected later on in our gross margins because of currency transaction.

Okay. That's helpful. So if I hear you correctly, maybe the past two quarters has it been a better pricing environment or has it been accelerated cost reductions, or maybe a combination of both that have been the drivers of the beats on the gross margin?

Yes. I agree, plus one fact. And the fact is that as we mentioned along the way, this was the quarter in which we managed to bring our air shipments to the minimum level that we expect to continue moving forward. Because they are always some components that we fly, such as a semiconductor ASICS, which does not make any sense to ship.

When we look at the gross margin planning, we basically know what are the prices. In the last two quarters, we have managed to reduce the cost of our products, as we planned, exactly according to the plan. The ASP remained probably where we were planned it to be and according to what we thought at the beginning of the year. And we managed to execute well on the reduction of the other costs that are not related to the product itself. The small variances between where we thought that we are and where we are actually came, as mentioned before, from the fact that we did see some favorable changes in the euro/dollar rates this quarter, which helped a little bit the gross margin.

Okay. That's helpful.

Last question for me, and I will jump back in the queue. And again, sorry for all the gross margin questions. But if I think about the gross margin outlook for FY16, given the sharper-than-expected acceleration you've seen through the first couple quarters post IPO, and also the fact that you are now running at what you would say is the optimal run rate for air freight shipments, how should we be thinking about the trend line on gross margins as we move through FY16? Is this high 20s level? The normal run rate over the next year or any thoughts you could share there would be helpful.

Thank you.

So actually, unfortunately, we do not give guidance for the full 2016. The only two things I can say is that as we said along the way, we have ASP erosion estimations of 7.5% to 10%. ASP erosion on a year-over-year basis in both 2015 and 2016, and we pretty much know how to match the cost reduction of our products to the ASP erosion based on the pace that we see those erosions coming into play.

So right now, what we see is that we see the gross margins as where we planned them to be. We see the ASP erosion in places where a little bit better than we planned, but basically not within something that will change dramatically as we see it right now. And in essence, at any given point of time we make sure that we reduce the cost of our product at a quicker rate than the ASP erosion that we actually see in the market.

Okay. Thank you.

Vishal Shah, Deutsche Bank.

Hello. Thank you for taking my question. I'm sorry, I joined the call late.

But Guy and Ronen, can you maybe talk a little bit about your next-generation product road map, in terms of what kind of margin impact that product would have versus your current margins?

And I have a follow-up. Thank you.

We are on schedule in developing our third-generation inverter. As mentioned a few times, it will be ready in late Q4 this year at very small volumes. As planned, it will allow us, once we fully ramped up this product, to reduce the price of the inverter part of the DC optimized package in a good percentage. We are not yet giving prices for this product; it is expected in few -- a couple months from now. Therefore, I won't be able to give you the proportion of improvement in gross margin related to this product.

That's helpful. And it may be a little too early, but can you talk a little bit about how you see the US market developing in 2016? What visibility you have from your customers, and whether you are in a position to comment about the leasing companies getting market share versus some of the other third-party suppliers? Thank you.

Thank you for the question.

I think that it is pretty natural that the market in the US in 2016 will grow very nicely. We see plans and signs for a very good demand from our existing customers. We don't yet, of course, see orders in for most customers for 2016, despite the fact that we have already some orders that will be covered through 2016. But this is the rare case of the bookings that we already have in. I think that 2016 will be a great year from us both in the residential sector, as well as in the commercial sector, where we are seeing a very high demand and very fast growth, especially now with the new available 33 kilowatt inverter. I am very optimistic on the market in the coming five, six quarters.

Thank you.

Edwin Mok, Needham & Co.

Hi. Thank you for taking my question.

First question on the pricing trend, I think Rolen and Guy, you talked about pricing a little better this quarter. Can you -- is there a way you can talk about that? Is that in terms of resi versus commercial? Is it -- are you seeing a high mix of smaller customers, that's why you get better pricing? Or is it a regional phenomenon you're seeing for a couple years, US stronger or any color you can provide on that?

I think it's -- we don't -- we cannot analyze any specific phenomenon. We kept the price a little bit above what was expected. If you look at the prices, it is a combination of a currency mix between different inverters and mix between different geographies. In our case, we -- in our business model plan for 7.5% to 10% overall ASP erosion during 2015 and 2016. In the first quarter, indeed, we saw 1.6% ASP erosion. This quarter, it's much flatter than that. But it was very hard for us to identify if it is coming from different plans or for a different proportion between different segments. I think it's overall what we see is the demand is strong and healthy; therefore, the price pressure we can keep it at the right proportion.

So for the third quarter and I guess for the back half of the year, are you planning for a little sharper ASP, that it will catch up to that 7.5% to 10% decline?

At this point, it's hard to estimate. I would be very surprised if for the full year we'll have an ASP erosion of more than 7.5%. I will be also very surprised if we will not have at least 5%. I would expect that we will have something in the range of 3% to 5% ASP erosion in the coming couple quarters.

Great. Very helpful color. Guy, you mentioned that a strong demand out of Germany and also the Netherlands, some of your key markets. I think historically, you have a good position there. Are you seeing just multiples in the commercial side or some new penetration on the residential side? Can you give us some color on that?

We have very, very strong market for residential in the Netherlands and the UK. We are not as strong in residential in Germany since SMAs, the land of SMA, and we still are laggering compared to them, having an advantage of 28 years in front of us. But we are gaining lots of customers. And different from other companies in Germany, despite the fact the market is decreasing, we are growing our market share, both in the residential and the commercial segments.

So I am expecting that we will keep this transition in the coming few years. In the Holland and the UK, the market started were already around. We have inherently stronger position, and very nice market share in both markets in residential. In the last few years, we're building our commercial offerings there and we see a great demand as well, so we expect to grow in both segments and all of these three major European markets.

Great. That's very helpful.

Last question and I will let the other ask. The new automated line you mentioned, I think that will fully ramp up by the calendar fourth quarter, Can you maybe highlight what should we expect to see in terms of benefit? Obviously I understand reliability is a benefit, but should we expect to see some step-down function in cost as that is ramped up? And if I take the 5,000 optimizer per day number that you highlight, it seems like you have more capacity to actually have a second or a third line. Any plans for that?

Thank you for the question.

We expect that the potential of the automation line is to reduce up to 10% of the cost of the optimizer. Once we will fully migrate all optimizers to be produced on automatic lines. Today, as you probably remember, we have something in the range of 3.5 factory units, and only in 1 of them we installed the automatic line. We order already two additional lines, which I hope will be finished building stage late this year and will be installed during first quarter of next year.

Assuming the supplier will finish everything on time, we should expect to have the majority of our optimizers coming from automatic assembly lines by the end of Q2 2016. That will be the time that we will be able to enjoy the majority of the decrease in production costs. In addition to that, I think that this is the automatic assembly line resemble transformation that I believe not only important for the cost, but also for the quality of the product and for our ability to build lines in every country where the demand will grow and will be sufficient for such investment. This with very little -- relatively very little CapEx investment since every automatic line costs something in the range of EUR1.5 million.

Great. Very good color. Thank you.

Philip Shen, ROTH Capital Partners.

Hey Guy, Ronan, congratulations on your strong results.

Thank you.

I had a follow up on the earlier question about 2016. You are growing well faster than the rest of the market, at 50%, you are running at more than twice the rate. What is your thought on your piece of growth in calendar 2016 versus the market? Can you stay at that growth rate, or given the tough comps, is 50% faster than the market, or perhaps more reasonable?

It is hard to predict, especially the future, so I'm not sure that we can predict how fast we will grow in compared to the market in 2016. But I feel that we have a great opportunity to grow both in the residential market, especially with the independent installers, as well as with all the big fleet installers. Where with all of them, we can still enlarge our market share, I believe in great percentage. Specifically, we can even grow faster in the commercial market, where with the products we have today, we have huge potential in front of us. I think that I would expect we can overcome the growth of the market in 2016, as we did during the last few quarters.

Great. Thank you, Guy.

You've done a great job winning new business in the US. There are, however, a few top US residential players with limited SolarEdge penetration. What do you think are the barriers to adoption for them, and when do you think you could start winning some of their business as well?

I think that all the big installers that are not using us today that I am aware of are in the process. We are putting resources and we're in the testing phase with some of them. And I would expect that with the new products we are bringing and with the success that we already have and with the customer satisfaction that you are getting all around, it will take a bit more time. But we will be able to get our share of all of these big installers that are not yet using us.

Great. Thank you, Guy.

Thank you very much.

Jed Dorsheimer, Canaccord.

Hi. Thank you for taking my question and congratulations on a solid quarter. First, with respect to your three-phase inverter, could you maybe provide, I may have missed this, but could you provide an update on where you are with that product? And the reason that I am asking is with the acquisition of Vivint Solar by SunEdison, do you see that is, to my knowledge, SunEdison was not a major customer for you, given the utility scale. I'm wondering if this acquisition provides an opportunity to really get the commercial product line off the ground with Sun Edison through the Vivint relationship.

Thank you very much for the question, Jed. The inverter, until now, we had the three-phase inverter in the US for commercial application, which reached 20 kilowatts. If you are doing 100 kilowatt installation, you will need to use 5 of these. We just introduced and we started to ship 33 kilowatt inverters, so in the same shafting, we increased the power by almost 50% -- by about 50%.

And now for 100 kilowatts, you need to use only three inverters, so that is a reduction in work and of course it's more economic for us to produce, and therefore, we can be more aggressive on prices. This will allow us to grow our market share, I'm sure,. And I shared the same view with you that acquisition of Vivint by SunEdison will assist us in our process to become a supplier to SunEdison, and I hope that it won't take too long.

Great. Could you just provide an update on the -- we actually had SolarCity, our conference today. Maybe just an update on the back-up storage efforts. I didn't hear that part either. That would be useful.

So, I just updated in the call that we are in the process to launch the product in Q4. We will launch Tesla-ready inverters for both grid tied as well as backup application during Q4. They will be available both for the European and American market.

Great. Thank you very much.

Thank you, Jed.

(Operator instructions)

Michael Morosi, Avondale Partners.

Hello. Thank you for taking my question.

Your primary competitor in the MLPE space released some pretty aggressive longer-term cost targets that would put their product at or below traditional string inverter technology. If we follow through your guidance of ASP or cost per watt declines in line with ASP declines, that would suggest that eventually their cost could be at or below SolarEdge, if you take that out into the out years. Is there anything in your product pipeline that could lead to, say, a step function or an acceleration in the cost per watt declines in the out years?

Of course. First of all, we of course, cannot analyze the future plans of our competitors, and I really appreciate their ability to be able to so precisely understand our costs for the future. But being a little bit less cynical, l I think that we have a very proven, efficient cost-reduction process where with every generation, we embed more functionality into the AC. Therefore, we reduce the size of the electronics, improve the efficiency, and being able to therefore produce it for a lower cost per watt.

The next big step is the third-generation inverters that are coming and will be introduced during later this year and will allow us a real step function in the cost and performance of inverters. We already finished the development of our fourth-generation ASIC and the related optimizer, and this probably will come to the market sometime early next year.

I think that as we proved from the beginning of our business that inherent advantage of the optimizer technology will always be cheaper in combination with a six string voltage inverter and compared to any micro-inverters. And therefore, I would believe that since it never happened on the opposite way, it won't change in the future.

Thank you.

That concludes today's question-and-answer session. Mr. Guy Sella, at this time, I will turn the conference back to you for any additional or closing remarks.

Thank you.

In summary, our fourth-quarter and fiscal-year results showed successful execution of our business strategy with record revenues and consistent growth in profitability. We look forward to continuing this momentum. Thank you very much for joining us on today's call.

That concludes today's presentation. Thank you for your participation.