Grupo Televisa SAB (TV) 2023 Q1 法說會逐字稿

Good morning, everyone, and welcome to Grupo Televisa's First Quarter 2023 Conference Call. Before we begin, I would like to draw your attention to the press release, which explains the use of forward-looking statements and applies to everything we discuss in today's call and in the earnings release.

I would now turn the call over to Mr. Alfonso de Angoitia, Co-Chief Executive Officer of Grupo Televisa. Please go ahead, sir.

Thank you, Ken. Good morning, everyone, and thank you for joining us. With me today are Pepe Antonio Gonzalez, CEO of Cable; Luis Malvido, CEO of Sky; and Carlos Phillips, CFO of Grupo Televisa.

During the first quarter, Grupo Televisa's consolidated revenue reached MXN 18.5 billion, representing a slight year-on-year decline of 0.5%, while operating segment income reached MXN 7 billion, equivalent to a year-on-year decrease of 3.4%. Revenue growth at our residential operations in cable and our other businesses segment was partially offset by declining revenue at Sky and our enterprise operations in cable.

We ended March with a network of 19 million homes after passing around 290,000 new homes during the quarter. We also delivered more than 290,000 fixed RGU net adds in cable ending the first quarter with 16 million fixed RGUs. We are confident that our wide geographic footprint and solid competitive position will allow us to keep delivering solid RGU net adds and gaining share of RGUs throughout 2023.

Our cable ARPU has been relatively stable over the last few quarters. But we expect it to increase slightly from the second quarter -- in the second quarter due to the price increases we implemented earlier this month. This and our ongoing cable RGU net adds momentum should allow us to accelerate revenue growth at our residential operations. While we continue to face a challenging environment at our enterprise operations in cable, we are determined to stabilize this business throughout this year.

At Sky, we believe the transformational measures implemented during the second half of 2022 will allow us to gradually achieve sequential operating and financial improvement over the coming quarters. Pepe Antonio and Luis will elaborate on the operating and financial performance of each of our core consolidated segments in their remarks.

Now let me walk you through the Televisa-Univision's first quarter results released yesterday morning. The company delivered another solid quarter with revenue of $1.1 billion, growing 6% year-on-year, while EBITDA of $361 million declined by 10% as streaming investments related to the new exclusive content, sporting rights, marketing and technology increased following the launch of its advertising and subscription services during the second and third quarters of last year respectively.

It is important to highlight that Televisa-Univision's EBITDA decline during the first quarter represents a sequential improvement driven by lower streaming losses, excluding the benefit from nonrecurring revenue and EBITDA related to the monetization of the World Cup rights and very strong political advertising due to midterm elections during the fourth quarter of last year. During the quarter, revenue growth at Televisa-Univision was driven by solid increase in consolidated advertising and subscription and licensing revenue of 6% and 7% respectively.

In the U.S., advertising revenue increased by 2% year-on-year or 5% excluding political and advocacy where we benefited last year from COVID advocacy-related spending. We continue to outperform the market, which according to Magna declined 6% during the first quarter, leaving us with 8 percentage points of outperformance. This reflects a revamped approach to advertising sales with a broader portfolio of solutions that includes both linear television and streaming.

In Mexico, advertising revenue growth of 14% year-on-year was driven by the appreciation of the Mexican peso, strength in both linear and streaming and the 2023 calendar year upfront where we secured record advertising commitments. In local currency terms, advertising revenue in Mexico increased by 4% year-on-year.

Consolidated subscription and licensing revenue increased by 7%, driven by growth in both the U.S. and Mexico. This growth was primarily driven by the launch of business premium subscription streaming tier.

In the U.S., growth of 5% also reflected subscriber declines in traditional MVPDs in line with the market. That was partially offset by growth in virtual MVPDs. In Mexico, growth of 13% was driven by the appreciation of the peso, modest growth in linear subscribers and higher pricing. In local currency terms, subscription and licensing revenue in Mexico grew by 4% year-on-year.

Regarding ViX, we're extremely proud of what we have accomplished since fully launching our 2 tier streaming platforms last year. Revenue for the first quarter was very strong, particularly considering how young the platform is. ViX is already the largest Spanish language streaming platform in the world.

Our engagement metrics were equally impressive with 26% growth in total streaming hours per user over the course of the quarter. This is remarkable considering that the comparable period had the World Cup.

To sum up, we are optimistic with the start of 2023 from both an operating and financial perspective at Televisa-Univision. We grew revenue across all business lines and geographies.

In the U.S., advertising revenue continues to outpace the market, reflecting growing advertising recognition of the power and value of our audiences as we shift share away from an overspent general market.

In Mexico, the reach of our linear and streaming platforms is second to none, making them the best choice for advertisers. This was evident in our record setting up front. In addition, ViX's first full year line represents a very powerful growth engine for our company with very encouraging increases in engagement and consumption, great momentum with advertisers and continued narrowing of losses as we progress towards profitability.

Now let me turn the call over to Pepe Antonio, CEO of Cable.

Thank you very much, Alfonso. We are very happy with the continued momentum in operating metrics and quality of service at our residential operations in cable during the first quarter of 2023.

Let me provide some highlights. Net adds grew by 290,000 fixed RGUs, the fifth consecutive quarter with close to 300,000 RGU net adds. Gross adds totaled 1.3 million fixed RGUs, the highest quarterly figure in the history of the company, even exceeding the COVID lockdown months, while our churn remains stable.

The positive trend in broadband RGU net adds continued with 85,000, an uptick over the previous quarter. Although slowing, video continues to be a success story. We added 31,000 video RGUs. A distribution agreement with ViX continues to gain traction.

Our product mix remains stable. Triple-play packages account for close to 2/3 of our sales. Double-play adoption continues to grow, underpinning our broadband net adds. This is our highest margin service, so we keep enhancing its product offering.

We expect to pass 900,000 new homes this year, slightly surpassing last year's marks while keeping our CapEx at similar levels to last year. In short, the realignment and simplification of our product plan, the improvement in quality of service and customer experience and our home staff expansion plan continued to translate into record levels in almost all of our operating and quality of service metrics.

The goal we set a year ago in our residential operation was to regain RGUs and subscriber growth to solidify our market share while keeping ARPU stable. We continue to achieve that. These strong operating metrics in the residential segment have begun to translate into revenue growth acceleration.

Moreover, on April 1, we implemented a price increase, which should contribute to improve our financial indicators. Now our focus will be on containing churn while maintaining the level of gross adds.

Our residential operations revenue growth accelerated to 4% in the first quarter of '23 from 0.9% in the fourth quarter of '22. EBITDA increased by 1.4% in the first quarter of '23 compared to 1% in the fourth quarter of '22.

Enterprise operations, which account for roughly 12% of our cable segment continued to face headwinds in revenue and profitability. Revenue fell by 4% in the first quarter. EBITDA figures were also affected.

To contain costs, we embarked on a company-wide structural cost-cutting program along the following 3 pillars. The restructuring of our enterprise operation includes taking advantage of technical synergies between the residential and the enterprise operations, which are quite important and include mobile MVNO solutions, revamping the product lines for middle enterprises that have been historically underserved and offer huge potential.

The commercial restructure includes compacting regions and middle management, rationalizing stores on a nationwide basis, optimizing our sales force between in-house sales personnel and outside distributors and the back office and internal organization pillar includes optimizing office real estate, fleet management, software licensing and optimizing technical installation materials.

We are also going through a bottom-up revision of all of our CapEx investments and processes. These efforts should contribute to improve our free cash flow generation in the short and medium term.

Over the coming quarters, we expect residential RGU net adds to remain at similar levels to those of the last few quarters, while residential operations revenue growth should accelerate due to the price increase. And 2, there are still challenges in the enterprise segment, which require structural changes that are in the process of implementation.

Before turning the call back to Alfonso, let me say that we are confident that the expansion to selected locations over the last couple of years, the price increase in our residential operations and our solid product and quality of service should allow us to keep growing during 2023.

Thank you, Pepe Antonio. Now let me turn the call over to Luis Malvido, CEO of Sky.

Thank you, Alfonso. Let me share with you an update on Sky's first quarter operation and financial performance. Starting with our DTH business, the new commission scheme for our sales force we introduced last September, intentionally reduced gross adds to improve sales quality.

In this regard, we are already seeing an increase in customers' payment rate, which will bring better revenues with less acquisition cost. Altogether, this new scheme is leading to lower CapEx and so higher return on investment.

Unfortunately, during the rollout of the process of this new scheme, we experienced some implementation struggles, which led to 7,000 postpaid cancellations this quarter. Nevertheless, this is a one-off effect.

Furthermore, this quarter, our sales were impacted by the migration of the provisioning platform. This upgrade very close to end of life was required to update our technology and also as a preparation for transition to cloud. This project is nearly completion. And we expect to see significant improvements in our ability to serve our customers more effectively and efficiently.

In addition, one of the positive outcomes of the work and promotions was the substantial growth in Blue to Go, our OTT business during the quarter. A number of customers that use that OTT for free during the event are now paying a monthly subscription fee that represents a net gain of 75,000 new customers.

Moving to new business opportunities. This month, we have re-launched the mobile offer with a more competitive value proposition and a new marketing campaign. Besides, later this quarter, we will launch the already announced new fixed broadband service in partnership with EC, both under a single family brand, Sky. Even a small stake of these 2 massive markets will have tremendous impact on Sky's financial.

Now let me walk you through our financial results for the quarter. First is worth highlighting that when excluding the effects of the workup and Q1 seasonality, revenues remained stable on a sequential basis for 8 consecutive months. Having said this, on a year-on-year comparison, revenues declined 11.7%, reaching MXN 4.7 billion, driven by the subscriber base drop, partially offset by March '22 price increase to prepaid video customers.

Operating segment income decreased by 13.6%, reflecting the before-mentioned lower revenues, partially offset by a decline in the cost of goods sold. Operating segment income margin for the quarter was 34.5%.

Last year, we developed an ambitious simplification program, aimed at improving efficiency and streamlining operations throughout the entire organization. This program has a projected full year impact of over MXN 600 million. And as of March, 47% of the identified savings were implemented are now in a delivery process.

On the CapEx front, we invested $42 million during the quarter, which represents an outstanding 23% decrease year-on-year. As I mentioned in our previous call, in 2023, we are targeting a material decline in CapEx compared to '22. The lower capital intensity is mainly a result of those measures we have taken to improve return on investment. As a result, EBITDA minus CapEx grew 12% year-on-year from MXN 739 million to MXN 832 million this quarter.

Before turning back to Alfonso, I'd like to emphasize that we remain confident in our ability to reverse the top line downward trend and achieve year-on-year growth by Q4 this year. Our confidence is grounded in the comprehensive transformational measures we are implemented, which includes together with -- sorry, stronger product portfolio, now adding mobile and fixed broadband service, customer lifetime value management, field service and customer care transformation, change management initiatives and a robust efficiency program.

Thank you, Luis. To wrap up, Bernardo and I are optimistic about our operating and financial growth prospects for 2023. At Televisa-Univision, the very strong upfront already announced, both in the U.S. and Mexico and the first full year live of our global streaming platform should allow us to deliver solid revenue growth for the third consecutive year, particularly excluding the nonrecurring benefits related to the monetization of the World Cup rights in Mexico and Latin America and very strong political advertising due to midterm elections in the U.S. in 2022.

And at Grupo Televisa, the strong cable RGU net adds momentum over the last several quarters and price increases implemented earlier this month should contribute to accelerate residential revenue growth of over the coming quarters, partially offsetting inflationary pressures in our cost structure. In addition, we are implementing a cost-cutting program at our cable operations.

Finally, at Sky, we are targeting to reach a sequential inflection point in revenue over the coming quarters, while improving free cash flow generation.

Now we are ready to take your questions. Ken, could you please provide us with instructions for the Q&A?

(Operator Instructions) Our first question will come from Lucas Chaves with UBS.

So my first question is, in the last call, you told that you closed the year in a proportion of 17% of active DTH versus the total cable. And how are you seeing fiber now in the first quarter? And how do you think you'll land in 2023?

And my second question is regarding the progression and competition in certain regions. So how do you see home extension feature placed? And where do you see the highest competition?

Lucas, as to our network, I'll leave it to Pepe Antonio to expand on this. But what's very important to focus on is that we have a very competitive network of over 19 million homes passed. We currently have those 19 million out of which 2/3 is either fiber dip or fiber-to-the-home. And we are already upgrading to that's 3.1. So this allows us to provide high-speed internet of up to 1 gig.

So we've got a very competitive network. We have been investing on it for a long time. And that's the result of being able to deliver those speeds. So we feel very confident about our network. I'll leave Pepe Antonio to talk about the network in general in further detail and also about the regions and where we are competing.

Thank you, Alfonso. Well, just to provide further color on what Alfonso has already said, we are very confident on our network. Besides the speeds, let me also say that the quality of our service has increased quite importantly in the last year.

Just to put some numbers further in, we expect to close by the end of 2023 with 20% of our network being FTTH, fiber-to-the-home. And we expect to have fully deployed 31% of the network -- with approximately 3.1, which allows us to provide 1 gig immediately.

But as Alfonso said, overall, our network is either 2/3 of our network is either fiber-to-the-home or fiber-to-the-curve, which allows us to quickly upgrade it to 1 giga quite readily. So we're very happy with the way our network is functioning both in terms of the mix between FTTH and high-speed HFC and the quality of our service.

Regarding your second question, let me just remind you that in 2021, we had a very large home pass expansion of 2 million homes. But in 2020, we also had 870,000, almost 900,000. And we plan to expand in 2023 another 900,000. So this is quite a substantial expansion plan during this -- in the last 3 years or for the last 3 years.

And what we're seeing is penetration in cities between -- after about 12 to 18 months penetration in cities oscillating between 12% and 20%. The highest competition is, of course, where all of the players are. But there are some cities where we are expanding, where not all of the players are in the same city and we are expanding faster. I hope that was clear in your answer.

Our next question will come from [Till Moles] with Schroders.

It's on broadband pricing, you mentioned price increases there. Can you elaborate a little bit, please, kind of what magnitude if it only applies to new subscribers also to the base and what percentage of the base, if you see more price increases going forward as well?

And then, related to that, you mentioned that revenue growth in cable is to partially offset inflation pressure. So that's only partially used that. That means that overall inflation is going to be having the upper hand? Or how should we interpret that?

Thank you, Till for your question. I'll ask Pepe Antonio to answer it. It has to do with our price increases that took effect in April and also inflationary pressures.

Thank you very much, Alfonso. I should start by saying that we were very cautious with the price increases that we implemented in April 1st. We did not apply the same price increases to all of our plants. The price increase is dependent on the package and the region to keep us competitive, vis-a-vis in our competitors.

The price increases were oscillated between MXN 30 and MXN 40 equivalent to an increase in ARPU in the low to mid-single-digit range. Since we implemented the price increase 3 weeks ago, as expected, we have seen a slight increase in churn related to the increase.

However, as this past increases, we expect it to be temporary. And we have in place a very aggressive retention program. Our sales have remained at the same level because our -- we increased our prices to the base, but not our introductory prices because our introduction prices for new customers has proven very competitive and we want to keep it that way.

And the environment is all of the players are very vigilant on prices. So we're remaining competitive by region and by package. And I think we're being successful, as I said at the beginning. Our gross adds for the quarter were the highest in the history of the company. So we hope that we can continue on down this path moving forward.

Just staying on that, do you think that the growth has mainly came from market share gains or from generally new connections?

I'm sorry. Could you repeat your question? I could not understand it.

Do you believe that your gross adds were mainly from market share gains, in other words, from competitors? Or do you think those were generally new connections first-time subscribers?

It's a mixture of both. It's a mixture of both. It depends on the market. It depends on the package. As I mentioned at the beginning of the answer, we have an aggressive expansion plan, but we also have 19 million home staff. So it's a mixture of both.

And the other question was on inflation. Should repeat that?

I mean we are -- I mean the whole world is under inflationary pressure, but inflation is not across the board. So as I said, we -- the increase that we have is in the low to mid-single-digits. But at the same time, we are in order to keep our margins and to maintain our profitability. We're in the middle of a structural cost-cutting program to keep the margins and the profitability going. And so we're balancing up the inflation vis-a-vis the competition that we face on the ground.

Our next question will come from Carlos de Legarreta with Itau.

This is Carlos Legarreta from Itau. Just 2 quick questions. First, if you could provide an update of the mobile active users' base for ViX. And secondly, for Sky, after the cleanup and the subscriber base, if you can provide a sense of what is the current mix between prepaid and postpaid users, that will be useful.

Yes. Thank you, Carlos, for your question. I guess as to ViX, I would like to say that on the AVOD side, it has been in the market for 3 quarters. And we're very encouraged that user and engagement metrics have been exceeding our initial expectations.

Of course, the Qatar World Cup was a major contributor to the success of ViX in Mexico and Spanish-speaking Latin America. As you know, we had the rights for some exclusive games and other programs. And so this event, the World Cup was a key event to attract millions of monthly active users to the platform.

During the World Cup, the service saw peak streaming activity with more than 5 million devices for a single game with 0 technical issues, which was a huge accomplishment for us because it's a new platform. And being such a young service, of course, not experiencing any technical difficulties with 5 million devices being activated for a single game was great.

We're very happy to confirm, as I mentioned before, that ViX is now the largest Spanish language streaming app in the world in such a short period of time. Now as to your question regarding KPIs for AVOD and Axtel services and in general for ViX, we believe it's too early to share more details as the service has been live only for -- I mean, for less than a year. And we would like to have more time in the market to have more evidence regarding potential trends.

So we want to be really serious about the information that we provide in respect to the service. It's a very important platform for us and a very important business. We are very encouraged about what we're seeing. As I mentioned, I guess, twice now, ViX is now the largest Spanish language streaming app in the world. But it's too young to be predicting or to be sharing information which could be misleading.

As to your second question, it has to do with Sky. I'll ask Luis to answer it.

Yes. Thank you, Alfonso. Currently, at the end of March, the mix of prepaid-postpaid DTH is 70:30, 70 is prepaid. The postpaid represents around 40% of DTH revenues. And this is by the end of the quarter, as I said. But as also as easy did, we implemented a price increase. We announced it already. It will be effective 1st of May. And this price increase goes from MXN 20 to MXN 50, making an average of 5.5% onwards. So this composition will change in the future.

Our next question will come from Phani Kanumuri with HSBC.

My first question is on the possibility of increasing your buybacks. Considering the share price at MXN 17 and your high cash balance, do you see -- are you discussing anything on increasing your buyback fund or any capital allocation that you're discussing on, that would be helpful? I'll ask the second question later.

Phani, thank you for your question. As to buybacks, we have been buying back stock. We have been subject to blackout especially last -- and towards the end of last year because of all of the (inaudible) situation. But Carlos can share with us the details of what we have been doing last year and this year.

Yes, Phani. I'd just like to mention that in terms of our capital allocation, as you know our priority for now is to reduce leverage. But as Alfonso mentioned, we have been doing share buybacks to take advantage of the undervalued price of our stock.

Since last year, we spent around $75 million in buyback. This is approximately a little bit more than 70 million CPOs since August, which is approximately 2.3% of our shares outstanding. Going forward, we're likely to keep repurchasing shares to take advantage of the share price, but we'll keep doing it opportunistically.

Sure. The second question is pertaining to the profitability target at [TVUnion] that at Televisa-Univision has stated that they're delaying the streaming profit. They expect the streaming profitability to be delayed by a couple of quarters. How does it impact Televisa in terms of the leverage targets or the expectation of dividends from at Televisa-Univision going forward?

Yes, Phani. I guess you're referring to what was announced yesterday in respect to profitability at ViX. And I would say that basically, our thesis regarding the 2-tier streaming ecosystem is providing to be -- is proving to be correct.

As you might remember, we launched a 2-tier streaming ecosystem. First, the free-tier has been the main source of net subscribers for the premium tier. And this quarter, it delivered about 60% of those subscribers, up from 50% over the last 2 quarters. And we finally had enough time in the market to evidence some churn data and still early. But about 20% of our gross subscribers were reactivations from users who turned into the free tier, which we reacquired while monetizing them from advertising.

So while our thesis around the product design has been validated and we're happy about that, we have modified how we market that product to consumers. I would say that from the start, we marketed the 2 tiers as separate brands, ViX and ViX Plus.

And given that the product design of ViX is unlike anything else that we have seen in the market, consumers didn't understand that we had 2 tiers in the same app and have the impression that there were 2 separate products, so discounted our efforts to realize the benefits of a 2-tier ecosystem within one app.

And what we have done then is we have transitioned to one brand in March in which we materially reduced marketing for ViX Plus to simplify ViX. So we are now ramping up a new campaign for the single ViX brand, 1 brand 2 tiers. Therefore, I would say that the performance of the market will take time to optimize.

So this very important change has effectively evolved the time line on our subscriber growth path. And to answer your question, this change, combined with, of course, a macro-driven softness in the ad market will likely push the breakeven of our overall streaming business back a couple of quarters, which would be remarkable in any event.

We are continuing to see the quarter-over-quarter sequential improvement in streaming losses that we projected, including in this quarter where we are following a blockbuster World Cup and absorbing seasonally soft first quarter ad market. So as a result of the change we made in the marketing strategy and the product itself, we will see a small delay. But we're seeing quarter-over-quarter sequential improvement. So we're very happy about that, even though profitability will happen a little later than we originally predicted.

And how does this impact your plans, so let's say, in terms of leverage or in terms of dividend that you expect from Televisa-Univision going forward?

Yes. Of course, we're planning on deleveraging Televisa-Univision and that's part of the plan. And of course, as to the dividend question you asked, we're now focused on investing in our platform, investing in the growth of ViX that is a huge bet for us.

We believe that because of all the assets that we have, including the library, the IP, including the factory of content in Mexico, which is the most prolific and efficient factory of content in Spanish in the world and all the assets that we have, including our advertising and marketing capacity in both Mexico, the United States and Latin America, we believe that this is a pretty sure bet and we're very confident about its success. So what I would say is that we're not focused on paying dividends. Rather we're focused on investing in this platform and making this a real success for us.

Our last question will come from Lucca Brendim with Bank of America.

So I have 2 questions here. The first of them is related to Sky. With all the new programs and manuals that you have been announcing for the division, what can we expect in terms of time line for us to see some sort of user base stabilization? Or how can we think about net adds going forward? And then the second question, if you could give us an update or any changes in time line for the potential spinoff of the other businesses?

Thank you, Luca, for your question. I'll ask Luis to go into further details. But what I can tell you is that we are seeing already a stabilization in the subscriber and user base at Sky. And so I'll ask Luis to give you the details and as to your second question, I'll ask Carlos Phillips to answer it. Luis?

Yes. Thank you for the question. These are 2 different situations. First is what we see on DTH and second is what we see on new products. So on DTH, after the cleanup of the days and after improving quality of sales, we're starting to see a fast decline in a quarter-to-quarter churn in prepaid in particular. From this quarter to next quarter, churn will produce a minimum of 15%. So this is very good news and it could imply a trend going forward.

This is still far from our gross adds. So it will take us some time to stabilize prepaid. But at least the loss of base will be gradually reduced. On the postpaid side, again, this quarter, we had a one-off effect that I just explained.

And we are going back to previous levels of the World Cup. So that means 60,000 to 65,000 churn customers or block customers in the quarter, which is going back to a flat customer base in postpaid, flat customer base with reducing churn, will imply not only base stabilization, but also revenues.

The second part of the answer is the newer businesses. On one hand, cellular phone, cellular services are offered only to postpaid customers. And you know that the service is not only adding stickiness to the product, but also adding revenues.

So this will also help our customer base to be more loyal and to reduce churn. So it's another tool to reduce churn. And finally, launching broadband, we have around 30% to 40% of our postpaid base, where we are able to offer a fixed broadband solution.

That means you know that most of the churn we are having these days is because these customers are addressed by our competition with cable. And those customers prefer to have a broadband. Now we are in a condition from a few weeks from now, we will be in conditions to offer to our own customers this solution.

So this will be another tool of protecting customer base and reducing churn. So altogether, will not only help us to stabilize base, particularly postpaid base looking forward, but also growing postpaid and stabilizing in prepaid. We will see this in postpaid this year and stabilizing probably next year in prepaid.

And Carlos, can you answer second question, please?

Yes. Luca, in terms of your question about the spinoff. As you know, we announced the spinoff late last year. Since that time, we've been working on our internal reorganization and procedures to execute the spinoff.

But the timing is really more subject to regulatory approvals. We've been working on filing the appropriate documentation. We expect to have approval from the regulators in the coming months, but we don't have an exact date yet.

As soon as we have it, we'll inform the market, but we're not to the point at which we are today. We're still expecting it obviously in the coming months.

This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Alfonso Angoitia for any closing remarks.

Yes. I'd like to thank everyone for joining us today. As always, feel free to contact us with any additional questions you may have. Thank you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.