Metro AG (MTTWF) Q3 2023 Earnings Call Transcript

Metro AG (OTC:MTTWF) Q3 2023 Earnings Conference Call August 11, 2023 2:45 AM ET

Company Participants

Steffen Greubel - CEO

Christian Baier - CFO

Michael Bouscheljo - SVP, Finance

Conference Call Participants

Andrew Gwynn - BNP Paribas Exane

Operator

Ladies and gentlemen, thank you for standing by. Welcome and thank you for joining the analyst and press call Q3 2022/2023 Results Presentation. Throughout today's recorded conference, all participants will be in a listen-only mode. The presentation will be followed by a question-and-answer session. [Operator Instructions]

I would now like to turn the conference over to Dr. Steffen Greubel, CEO, METRO AG. Please go ahead, sir.

Steffen Greubel

Yeah. Thank you very much, and good morning to everyone. Welcome to our METRO's Q3 '22-'23 results call. I am happy to present you our most recent business developments today. Before we start, a couple of announcements. As you know, and following currently the recent announcement, Christian Baier will leave the company by the end of the fiscal year. In order to manage a proper hand over in the meantime, he resigned from his position as a Management Board member as of 1st of August, '23. We have transferred his responsibilities to other members of the Management Board, and I'm taking care of the financial topics until a new CFO is in charge.

Accordingly, I will guide you through the developments in Q3 today. Michael Bouscheljong, Senior Vice President - Finance will be with me in this call today, and will also assist during the Q&A part later on. As also in the previous calls, we will again provide a written and verbal Q&A option. Feel free to post your questions either in the chat during the presentation or asking verbally afterwards. Moreover, as already announced, we will again provide an opportunity for journalists to ask questions in Deutsche, for quotation purposes at the end of this call.

So, let's jump into the content. Today's call will focus on five topics overall. We will start with a look into the market and macroeconomic environment, and in this context also on our country portfolio. We will continue with an update on our performance, which is in line with the provided guidance and we further defended gained market shares. We will then do a quick recap on our sCore strategy and explain how we would enable significant competitive advantages for METRO. And following this, we'll again share some insight into the progress of selected sCore initiatives and our related sCcore KPI. We will then finish this call with the confirmation of our strategy and ambitions. So let's start and let's have a look into our market and macro-economic environment first.

So let's highlight three topics with relevance for our Q3 results. First, we do see a continuous food inflation in the market. While we see a slight decrease against Q2, food inflation is still significantly above the overall consumer price index and significantly above previous year, which has a strong impact on both our sales and also cost components. Second, we also see further rising interest rates in the market while we as METRO are profiting from the fact that the major part of our net debt is comprised of leases. This makes us more resilient and our balance sheet stronger in the current market environment.

Third, with the sale of METRO India, we have completed our portfolio review for now. We have no further exits planned in the current situation and therefore, are fully focused on the execution of our sCore strategy. However, sales and adjusted EBITDA of METRO India are still included in the segment East until April '23. Thus, it is worth to mention that due to portfolio adjustment effects, previous quarters appear to be stronger compared to current figures.

But now let me move on to our quarterly and last nine-month results in a portfolio-adjusted view, and how it is positioned in the guidance. Generally, Q3 was a challenging quarter but overall still in line with our expectations. The portfolio adjusted at constant currency, we achieved a sales growth of 6% versus a very strong quarter in the previous year. Our sCore execution in line with the given outlook and also in Q3, unfavorable weather conditions directly affected the out-of-home consumption, especially in Germany and in the segment West.

The portfolio-adjusted sales growth for the nine months was around 9%, we hereby can confirm our expectations to reach the provided sales guidance for the fiscal year. Against a strong previous year, Q3 adjusted EBITDA declined by EUR85 million. This is mainly driven by the expiration of post-transactional effects from the sale of Real and the discontinuation of license income related to Wumei as of May '23. As expected, effects from cost inflation are noticeable and continue to look at challenging business conditions in Russia.

On top, our new management team in Germany has put in place new plans to improve our operating performance and capabilities. I will talk about this more in detail shortly. Nine months adjusted EBITDA decreased by EUR206 million versus previous year. This includes expenses from the cyber-attack in Q1, as well as an increase in IT costs, Following these attacks and subsequent investments into our IT security system. Next financial year, we expect to have additional costs for IT security of up to EUR50 million. We expect this amount to decrease in the subsequent years after implementation gradually. We expect a slightly increase of adjusted EBITDA in Q4 and to be fully in line with our full-year guidance.

By now, looking at the Q3 performance more in detail, we can see that especially the segment West and East contributed to the growth of the Group in the quarter. Q3 was impacted by A negative portfolio effect of around 3 points -- 3 percentage points. This is mainly related to the sale of METRO India in segment East in the current year, and the sale of METRO and MAKRO Belgium in the last year. The decrease in adjusted EBITDA is mainly driven by the segment Others from the mentioned post-transaction effects and high-cost inflation in personnel expenses and energy costs. It also includes investments in our wholesale transformation through previously announced price investments. Additionally, effects from assortment and stock rationalization, especially in Germany.

To be more specific on the development. In Germany, reported sales increased by 2% versus previous year, reaching EUR1.3 billion. Adjusted EBITDA decreased by EUR30 million driven by continuous and also expected cost inflation and unfavorable weather conditions impacting gastronomy sentiment, mainly in April and partially also in May.

Sales performance improved in the second half of May and June. We are happy to have put in place a new management team in Germany to focus even more on the wholesale transformation in one of our key markets. The current focus on assortment and stock rationalization will then, over the long term, improve the quality of our overall performance in Germany. We will update you on the progress over time.

Let's talk about the West. In the segment West, reported sales increased by 2% versus previous year and reached EUR3.4 billion. Especially France, Spain, and Portugal contributed to the sales growth. Also in the segment West, HoReCa sales were impacted by the weather conditions quite heavily, especially in Italy, where floods and bad weather delayed the start of the summer season.

But I'm also excited to report that the performance of our FSD companies such as Pro a Pro France, Pro a Pro Spain, and Aviludo in Portugal achieved a two-digit sales growth. Since May '23, the reason we acquired Swedish delivery specialist JHB, Johan i Hallen & Bergfalk, also contributed to the overall sales growth in our FSD business. The adjusted EBITDA for the segment West slightly decreased to EUR195 million, mostly due effects of cost inflation.

In Russia, sales in local currency decreased by minus 3% due to a reduced customer spending. Reported sales reached EUR600 million, also impacted by a negative currency development. Adjusted EBITDA at constant currency decreased by EUR8 million against previous year. The decline was mainly due to the difficult macroeconomic environment and associate margin decrease.

In the segment East, sales in local currency increased by 4%. Adjusted for METRO India, sales even increased by 11%. Almost all countries in the segment contributed to the sales growth. The Ukrainian business performed positively with 64% growth versus previous year at constant currency. Negative currency effects related to our Turkish operations significantly impacted the reported yield.

Adjusted EBITDA reached EUR89 million and slightly decreased by EUR8 million at constant currency following expected cost inflation. In the segment Others, reported sales grew by EUR29 million to EUR60 million and included METRO markets sales of EUR36 million. The sales growth is mainly a result of the encouraging growth in our digital business. Two-thirds are attributable to the growth of our existing METRO markets business in Germany, Spain, so countries that we were also live in previous year. One-third of the growth resulted from the rollout of METRO markets to Italy, Portugal, and the Netherlands.

Also, the POS rollout in France and Germany as well at Gunther Group contributed to the sales growth in this segment. Adjusted EBITDA decreased to minus EUR23 million due to the expiry of post-transaction effects from Real -- mainly from Real and previous year --- of previous year and further investments into digitalization. So how does this performance translate into our market share development? In Q3, we again outperformed the market and were even able to increase the gap versus the market in France. This trend further confirms the effectiveness of our sCore strategy, and I would like to remind you how exactly it works.

Let me pick the how again and explain you indeed more specifically how we are able to drive growth and still outperform the market. The answer is because with sCore, we have a strong strategy in place, which has a huge potential and significant competitive advantages. The sCore is greater simplicity and efficiency for our customers. This is because our sCore strategy connects our three different channels, stores, delivery, and digital, in one multichannel business model. It also drives efficient purchasing opportunities in each individual channel.

Second, sCore means making most of our existing infrastructure. We achieved this by actively connecting our store base and our growing delivery business by pushing out-of-store delivery. At the same time, we are continuously optimizing our stores with regard to an efficient wholesale setup. And through our online marketplace, we further extend our assortment virtually in addition to that.

Finally, our multichannel business strategy differs us from competition. It marks a clear competitive advantage as the combination of all of our sales channels has significantly more potential than the sum of its parts. That is because experience shows, with the use of multiple channels through our customers, the overall sales grow over proportionately for us. Following the multichannel customers are important drivers for our sales, and our ambition is to constantly increase the share of those multichannel customers.

So let me now look a little bit closer in the progress of our sCore execution. I will start again with our pricing initiative by more pillars before then moving to the overall store transformation and sales force growth. As already explained in the Q2 call, buy more pay less, or BNPL is our volume-driven pricing model and a key initiative of the wholesale transformation of our stores.

It is not only a price investment initiative but a measure to significantly enhance our productivity. That's because BNPL starts with reducing the assortment and thus complexity while, in parallel, increasing the massification of product presentation. Combined with the price optimization of those products, BNPL drives both sales as well as productivity gains. And this is mainly the result of an easier and faster purchasing environment for our customers as well as more efficient replenishment opportunities for our staff.

Having shown the encouraging results of the BNPL pilot country METRO Romania as well as METRO Italy in the last call, I'd like to show you today the progress of further country examples in different rollout stages, in this case, Serbia, Bulgaria, Spain, and Croatia. Serbia and Croatia worked on the BNPL implementation already since more than one year, both showing strong BNPL sales shares with 47% and 39%, respectively. As BNPL and assortment optimization are closely linked, Serbia has also reduced its assortment by impressive 12,000 SKUs, while Bulgaria also already removed 7,000 SKUs. As a result, we see a sustainable and continued sales uplift in both countries.

Looking at the newly onboarded BNPL country, Spain and Croatia, we see strong and constantly rising numbers given their short implementation periods so far. Moreover, we can see that implementation in both countries goes faster and more efficient as they incorporate learnings from other countries.

So let's now move from assortment and pricing to the store infrastructure transformation, resulting in the so-called multichannel fulfillment center, MFC in abbreviation. As already mentioned, to achieve our ambitious FSD targets, tripling delivery sales by 2030, we need to leverage our existing infrastructure. We do this by actively connecting our stores with the FSD business and further developing our stores into efficient warehouses and logistic platforms.

The transformation of a store to a multichannel fulfillment center includes three fundamental areas. Number one, space management, which encompasses all key elements of wholesale optimization. This includes reducing the assortment, introducing volume-based pricing as well as massification of product presentation.

Number two, stock management, which includes the full digitalization of the stock management systems. This is to ensure real-time stock control and transparency, both in-store as well as for the out-of-store delivery. And then number three, in-store logistics, which means the implementation of an integrated supply chain planning as well as the optimization of the picking and replenishment processes. This results in more efficient in and outbound logistics flows, and a smoother interaction between store-based and delivery business.

Looking on the implementation progress, the transformation of our stores into MFCs has already started in 14 METRO countries and will be gradually rolled out to the other countries in the upcoming months. Zooming into MAKRO Poland as an early adopter and MFC pilot country. Already, all local stores have been transformed into MFCs, and we see encouraging results based on the data for 10 pilot stores before and after MFC implementation.

So stockability increased by nearly 4% through real-time transparency of inventories. The FSD service level increased by 2% through a stronger connection of instant FSD business, and the picking productivity raised by almost 16% through digitalization and process optimization. A further key initiative of the sCore strategy execution is the expansion of our sales force because the sales force also plays an instrumental role in achieving our 2030 ambition. And that's because with a constantly increasing FSD sales share, we're also moving more and more into an active selling business. Potential FSD customers do not necessarily look for purchasing at METRO, but must be convinced from our service and want us on an ongoing basis.

And this also includes pushing our multichannel business by pitching the advantages of our marketplace, of DISH products or specific store-based offers, and this increase of multichannel customers. Finally, the sales force ensures a smooth customer delivery. By this, we mean supporting our customers personally with the first order but also being available for them for all questions and issues going forward. To make this happen and have enough resources in place, we have defined the goal to double our sales force by adding an additional 6,500 sales reps until 2030. And we are seeing good progress as we have already increased our sales force by 1,500 new colleagues, over -- 20% of the overall ambition within the last 21 months.

Also, we are actively driving professionalization by currently looking -- rolling out a sales coaching certification program for all team leaders. The resulting METRO master sales coach certification is also officially recognized by the International Coaching Federation. Here we see a great momentum with all METRO, MAKRO, and FSD companies being part of this program and the ambition to have 100% of our sales team leaders certified by the end of this calendar year.

Now switching from sCore execution to the overall sCore progress. We see again good results in almost all KPIs in the last quarter. On the input side, we grew our sales force by 175 new FTE in Q3 and are sitting at 650 FTE over the last nine months, being good on track to double our sales force until 2030. Moreover, our delivery infrastructure was expanded by 8 new depots, 5 depots from the acquisition of JHB, two depots at Classic Fine Foods, and another depot in Spain.

Regarding the output factors, we see the following results. Strategic customer sales share increased again to 73% versus 71% in the first half of the year. FSD sales share remained at strong 22% versus the first half of the year. The digital sales share grew to 11% versus 9% in the first half of the year, which reflects the consolidated sales from METRO Markets, JHB, and FSD ordering and shows that we've further increased our digital footprint. Own brand share remained at the record share of 21%, in line with the first half of the year, underlining our strong own brand focus.

Let me summarize then how Q3 performance was translated into financial KPIs. While the guidance view sales growth is plus 6%, the reported view in group currency is slightly negative of minus 3% to the portfolio and the FX effects in a channel view, as well as reported sales store and FSD sales were impacted by portfolio and the FX effects.

Portfolio-adjusted store sales are roughly on previous year level, while in reported view, reached around EUR5.8 billion. FSD sales growth slightly increased versus a very strong comparison basis in previous year and reached sales share of around 24%. METRO Market sales increased above 97% versus previous year, almost doubled. And as already mentioned, around two-third come from organic growth and about one-third from the rollout in new countries, Italy, Netherlands, Portugal as mentioned.

And then further, as mentioned, the adjusted EBITDA decreased to the expiry of post-transaction effects from Real, discontinued license income from Wumei in previous year, as well as cost inflation and margin decline due to a previously mentioned price investments and assortment stock rationalization program, especially in Germany. The currency effect is EUR19 million negative, and the current transformation gains in Q3 include METRO India sales effect and previous year transformation costs of the sale of METRO MAKRO Belgium. This brings us then to a positive reported EBITDA development in Q3 versus previous year of plus EUR175 million.

So let's move further down the P&L. Depreciation is almost stable. The net financial results improvement is mostly due to the noncash FX effect of ruble in other financial results, while this was negative in the previous year, it's positively impacted in the current year. Consistent to last year's approach, taxes were calculated based on the expected absolute amount for the full year.

Q3 earnings per share, including sale of METRO India at EUR0.30 and noncash FX effect is about EUR0.50. In the previous quarter -- in Q3 previous year, it was minus EUR0.80. Adjusted for the noncash FX effect in financial results, EPS would have been at roughly EUR0.40 for Q3 and roughly EUR1 for nine months. Overall for nine months, EPS is at EUR1.62 and includes Campus project, a real estate gains from the first quarter.

So moving on to the cash flow perspective. The positive Q3 free cash flow of EUR384 million is mainly driven by a good operating cash flow development and roughly on previous year level. Due to the expected effect from assortment stock optimization and collection of supply receivables, net working capital development overcompensated lower operational EBITDA, while other OCF included mainly the deconsolidation effect of transformation costs from the sale of METRO MAKRO Belgium in the previous year and transformation gains from the sale of METRO India in the current year.

Investments in sCore execution for network and sustainability grew as well as for repayment and maintenance, while divestments, leasing, and net interest rates are almost stable. The position Other includes cash in from close out of remaining ruble swaps in previous year. Positive free cash flow also reduced net debt by EUR582 million versus Q2 and by EUR303 million versus previous year. The net debt improvement also includes effects from M&A activities, sale of METRO India and the acquisition of JHB.

For the financial year, we reconfirm our expectations on sales growth. Let me take you through the full-year segment guidance according to the last developments. So in segment West, our market share gains with sCore execution confirm our expectations to grow within the guidance range. However, in Germany, given the initiatives we have recently put in place, we expect to grow more slowly and slightly below guidance. In segment East, we expect to grow noticeably above our guidance range, partly supported by higher inflation.

As we mentioned earlier, Russia sales will decrease versus previous year. Sales in segment Others will continue to grow significantly above guidance as well rollout METRO Market and Hospitality Digital products more broadly. Overall, on a group level, we expect sales development reaches upper half of our sales growth guidance.

And moving to adjusted EBITDA guidance for the financial year. In the segment West, adjusted EBITDA will grow moderately. In Segment East, we expect a similar performance to previous year. In Germany, as previously noticed, performance will be impacted by new initiatives to improve long-term profitability. Adjusted EBITDA will noticeably decline this year. Russian business will decrease strongly. And moving to segment Others, it will also decline to post transaction effects, mainly China and Real.

On a group level, there are also further cost inflation effects and the impact of cyber-attack costs, which leads to a temporary declining adjusted EBITDA. We continue to expect the development within the communicated adjusted EBITDA corridor, however, taking into account mentioned remarks, now rather in the lower half. For '24, you should expect the impact of additional cybersecurity cost up to EUR50 million. We expect this amount to decrease in the subsequent years after implementation gradually.

We expect that roughly EUR200 million real estate gains have already been fully booked in the first quarter. D&A, net financial results without non-cash FX effect and taxes are under normal development. Announced in Q2 EPS in the range of EUR1.20 to EUR1.60 further confirmed, unchanged cash investments of around EUR600 million for the full year is in line with our expectations and the sCore strategy and an improvement of our net debt by around EUR300 million, taking also into account the sale of METRO India, the FSD acquisition of JHB, and a slightly negative free cash flow.

While there remains work to be done, I remain confident in our midterm -- our mid to long-term perspective and reconfirm our sales growth ambition. This is because of our successful sCore strategy execution and our strong operational business. While EBITDA is impacted by rising costs and investments in IT costs for cybersecurity and ongoing investments to drive growth initiatives, we remain fully on track with reaching 2030 ambitions.

And this now concludes our presentation today, and Michael and I are now happy to take your questions, first in English. Thank you very much.

Question-and-Answer Session

Operator

Ladies and gentlemen, we will now begin our Q&A session. [Operator Instructions] First question is from the line of Andrew Gwynn with BNP Paribas. Please go ahead.

Andrew Gwynn

Hi. Good morning. Two questions, if I can. So firstly, could you give a little bit more color on the trading, so maybe like-for-like by region? Obviously, there's quite a lot of space effects and so forth going on. I know you don't normally disclose like-for-like, but a feel there would be good. And the second, obviously, as we come into your Q4 to calendar Q3, how much of a sense of an improvement given the sort of normalization in weather trends will be in the UK, it's still pretty great. Thank you very much.

Steffen Greubel

So thank you very much for the question. Let me take this one and focus on West and Eastern Europe where we have some of the relevant portfolio adjustments. So when you look at Q3, we reported in Western Europe, plus 1.6%. When you look at it portfolio adjusted, we were looking at roughly 5% -- 4.8% to be precise. That's mainly related to the sale or to the closure or to the sale of METRO Belgium in the last year, the closing date was the 15th of June.

And you can expect roughly EUR130 million still being in the figures from the last year. And Eastern Europe, that's mainly due to India and this year activity. So non-adjusted, we are looking at 4.2%, adjusted, we would look at 11.2%. And when you look now because we talked a lot about the weather and the expectations and the sentiment, so we see, apparently, when you look at June only, the conditions have been better, we see also that there is a better development and it's basically in line then with our expectations. So weather is playing indeed a role here.

Andrew Gwynn

And is there an early look at July? I don't know if there's any extra color you want to give for that.

Steffen Greubel

That's very different by region. And yeah, we will then report in the next session about July.

Andrew Gwynn

Okay, very good. Have a good day.

Steffen Greubel

Thank you very much, Andrew.

Operator

[Operator Instructions] Next question is from the line of [indiscernible] with Dow Jones Newswires. Please go ahead.

Unidentified Participant

Yeah. Good morning, everybody. Thank you. Hopefully, you can hear me. Can you hear me?

Steffen Greubel

Yes, sort of. Yeah.

Unidentified Participant

Wonderful. Good morning. I just want to get a little bit of color on the fourth quarter, how it started, and if you see yourself on track for a full year net profit and thus a return to a dividend. Thank you.

Steffen Greubel

Okay. I mean, the question on current trading in Q3, I basically answered. So we see sort of very different -- or not very different, but different circumstances. Overall, it is in line with our expectation. When we look at the EPS, we expect the EUR1.20 to EUR1.60, and there's no change in dividend policy. We need to see how then things are turning out in the Q3 quarter, and then when it comes to the publication of results, we can give more light on then the last quarter in terms of EPS.

Unidentified Participant

And how did the fourth quarter start?

Steffen Greubel

It's starting in line with expectations.

Unidentified Participant

Okay. Thank you.

Operator

[Operator Instructions] So there are no further telephone questions at this time. We will now switch over to the written questions from the webcast. [Operator Instructions]

Unidentified Company Representative

We would then pick the first question from the webcast. It comes from Markus Schmitt from ODDO BHF. Thanks for taking the questions. Could you please comment on the HoReCa environment in the different countries? And if you see that consumer sentiment is now more affecting demand of your clients than in the previous call, so the trend is becoming more negative or still unchanged?

Second question, could you please confirm how Q4 is trending, particularly in Germany? Third question, could you please break down the position Other in the cash flow statement? And the fourth one, since you said you will invest additional EUR50 million in IT security next year, where do you see CapEx, so PPA intangibles, in financial year '24. Maybe Steffen, you, for a start?

Steffen Greubel

Yeah. Thank you very much, Markus, for the questions. So let me take -- let me start with the first one. I mean, as I already said, the strategy implementation is very well on track and we are developing according to plan. Again, our market shares are rather sort of limited in most countries being usually the number one, we are looking at one digit market share. So there is plenty of space to grow. So it's -- the potential growth for us seems to be unaffected and our growth momentum also continues. And we also continued, as you see, to gain market shares. And we also expect to continue that trend also in the next quarter.

Talking about Germany, of course, and I mean it's quite hard to speak. I mean, four weeks of rain are doing something to us here when you're especially looking at terraces in the gastronomy. But the team is very much doing a lot of activities to sort of fight back and then bring the country also in line with our expectations again. And for three question two and four, I would like to hand over to Michael now to give us a little bit more detail on that one. Thank you.

Michael Bouscheljo

Yes. Sure. Thanks, Steffen, for that. So for the position Other that you see in the cash flow statement, what we do here is mostly make a reclassification of the impact of the disposal of India to take it out from the operating cash flow and put it into divestment cash flow. On question number four, on the additional IT security. So the big part of the EUR50 million is mostly OpEx related. There's only a minor CapEx part -- see that building up on top of the last year. So already this year, there is something coming and then the EUR50 million is a cumulative on top investments versus times before cyber-attack.

Unidentified Company Representative

So the next one comes from Thomas Aldenrath (ph) from ICF Bank. Mr. Kretinsky recently put EUR1 billion into French retailer, Casino Group. Did he already knock on METRO's door in order to figure out future synergies between METRO and Casino?

Steffen Greubel

He didn't. And let me also take -- talk shortly about the difference between a hypermarket and the wholesaler because it's a common misconception that we are more or less seen in common with supermarket retailers, discounters. We are a wholesale company. We are a multichannel company. We sell bulk, we sell to professional customers. It's a very different business model than you would compare Casino, and also the synergies even theoretically would be very, very limited, but he didn't knock. I guess there were all -- that was all questions right, no?

Unidentified Company Representative

Yes. There are no more written questions in the webcast, but I think there are German questions still on hold.

Operator

Yes. Ladies and gentlemen, we would now give the journalists the additional opportunity to ask questions in German, and we'd therefore like to switch to the German language. [Operator Instructions]

[Foreign Language]

Unidentified Company Representative

[Foreign Language]

Steffen Greubel

[Foreign Language]

Unidentified Company Representative

[Foreign Language]

Operator

[Foreign Language]

Unidentified Company Representative

[Foreign Language]

Steffen Greubel

[Foreign Language]

Unidentified Company Representative

[Foreign Language]

Steffen Greubel

[Foreign Language]

Operator

There are no further questions registered at this time. I will hand back to Dr. Steffen Greubel for closing comments.

Steffen Greubel

[Foreign Language]

[Interpreted] Okay. I'm going to switch to English. So thank you very much for joining and questions. And as always, go out eating. Thank you very much.

Operator

Ladies and gentlemen, the conference is now concluded, and you may disconnect your telephone. Thank you very much for joining, and have a pleasant day. Goodbye.