Earnings Call Transcript - ADSE Q2 2022

Cary Segall, Head of Investor Relations

Hi, everyone. Welcome to ADS-TEC Energy's H1, 2022 Earnings Call. My name is Cary Segall, and I'm the Head of Investor Relations. A recording of today's call and a presentation can be accessed from the investor section of our website. Joining me on today's call are Thomas Speidel, Founder and CEO of ADS-TEC Energy, and Wolfgang Breme, CFO of ADS-TEC Energy. Today we will be discussing ADS-TEC's latest financial results for H1 '22, guidance for the second half of 2022, and conclude with a Q&A session. Please indicate your interest in asking questions as the operator addresses, and we will address them at the end. During the call, management will be making forward-looking statements regarding full year 2022 and our outlook for expected growth and investment initiatives. These forward-looking statements involve risks and uncertainties, many of which are beyond our control and could cause actual results to differ materially from our expectations, including, among other risks and uncertainties, the continued COVID-19 pandemic, supply chain issues, and geopolitical challenges. These forward-looking statements apply as of today, and we undertake no obligation to update these statements after the call. For a more detailed description of factors that could cause actual results to differ, please refer to the risk factors section of our Annual Report on Form 20-F previously filed with the SEC and posted to the investor section of our website. Also, please note that financial measures presented on this call adhere to IFRS and non-IFRS. We use non-IFRS measures because we believe they provide useful information about operating performance that should be considered by investors in conjunction with the IFRS measures that we provide. A reconciliation of these non-IFRS measures to comparable IFRS measures will be included in the earnings release and investor presentation. With that, I will turn the call over to Thomas Speidel, ADS-TEC Founder and CEO. Thomas?

Thomas Speidel, Founder and CEO

Thank you, Cary. A warm welcome from my side, dear ladies and gentlemen, and ADS-TEC investors. Today, we would like to provide you with an update on our business for the first half of 2022. And we want to discuss why we are convinced we are on track regarding latitude and corporate development. The transformation to an intelligent and decentralized energy supply is still in its infancy, and our battery-buffered technology puts us in a unique position to capitalize on this moment. ADS-TEC develops and produces decentralized smart storage-based platforms that are a crucial basis for the transformation of the entire energy system. We manufacture the complete hardware system, the software, as well as the services to charge point operators and power companies, assisting them in the transition to a more electric world. The decentralization of renewable energy supply and the associated sector coupling can and will only succeed if future energy providers can optimize decentralized business models individually and as a group. Currently, this is what we see happening in the energy market, and it’s the vision of ADS-TEC to provide the smart ecosystem platform and services for all future power companies. Our chargers are delivered complete with features, interfaces, and services that enable our customers and partners to run the best and most efficient business models to service the end customer. The transformation from combustible engines to fully electric vehicles over the next few decades is one of the trigger points we see for the decentralization of energy supply. As such, it is vital that all the electric vehicles appearing on the road have access to the necessary quantity of electricity in a convenient and timely manner. This is where ADS-TEC comes in with the development of our battery-buffered ultra-fast chargers, which are currently available in the form of the ChargeBox, which is well-known, and this year the ChargePost and also the ChargeTrailer. All these products allow for charging in minutes, not in hours, even on a low power or limited grid. Let's take a step back for a minute, as it's important to point out that there are strong tailwinds in place today in terms of electric vehicle adoption that underpin adoption of our technology. In 2021, global EV sales were 6.6 million, more than double the 2.2 million sold in 2019. This year, we are on pace to see more than 10 million sold. The North American Q2 electric vehicle sales accounted for 5.6% of new car sales. In Europe, the number was more than 10%, and in China, even over 20%. The numbers are expected to grow exponentially over the next decade. And we must have convenient and fast charging available even in power-limited areas. There will continue to be ultra-fast ChargeBox located along nature forest paths and high-density areas where the grid is deficient or might be extended. However, to have complete adoption of EVs and eliminate range anxiety, ultra-fast charging must be made available everywhere so that it is convenient and lowers costs. Our platform will not require expensive adapters or extensions, won't suffer from peak demand charges from the utility companies, can store electricity when it's cheap, and can even regulate frequency in the future. Our ChargePost can even be used as a billboard and advertising platform with up to a 72-inch advertisement screen. We have identified the following market segments for our platform and services for ChargePoint operators: retail establishments, condominiums and apartments, hotel operators, office and industrial buildings, car manufacturers, auto dealerships, rental car companies, fleet operators, municipalities, utility companies, as well as oil and gas companies offering convenience stores and turning services. These segments all have the need for fast charging on often power-limited grids that would be too costly and time-consuming to upgrade. Our sales team, led by John Neville, is building a robust pipeline with significant new customers in retail, telecom, transportation, utilities, and oil and gas companies. Our European business continues to grow with the expansion of existing relationships and the recent announcement of strategic partnerships such as JOLT in Dublin, Munich, and Boston, who are owning and operating ultra-fast charging solutions in urban areas. They view our charging technology as playing a crucial role in terms of power pricing and charging time and cost reduction by eliminating the need for expensive grid upgrades. JOLT has already begun deploying our battery-buffered charging stations at EG Group, which is ESSO, for example, in gas stations in Munich, Berlin, Hamburg, Frankfurt, Stuttgart, Dresden, Düsseldorf, as well as Nuremberg. We also see TAMOIL stations in the Netherlands, so JOLT is working with ADS-TEC on the extension of their partnership and that includes for JOLT North America in the future. They aim to install and operate more than 5,000 ultra-fast charging stations over the next few years. That's just one example of a partnership with a new company but one that is a specialist one. In our last call, we reported that our first contract was signed for the ChargePost with a strategic customer who did not wish to be named at this time. The initial order was 50 units and it will be supplied in Europe as early as 2022 for this project. In August, we announced that the company has significantly increased the order volume for the product in fiscal year 2022, since the publication of the financial forecast on April 28, 2022. The order primarily involved the company's battery-buffered ultra-fast new charging system, including the ChargePost, as well as stationary storage systems for commercial and industrial applications. For contractual reasons, specific customers and projects could not be published or announced at this time. We were able to more than double our booked order year-over-year to EUR152.3 million and we're pleased to announce that our order backlog increased to EUR176.7 million, which gives us good visibility of our growth opportunities going forward. Regarding the geographical expansion of our business, we are excited and executing on our plans in the U.S. We have determined the location for our own manufacturing site and are in final negotiations with the respective partners. We expect to open this location in Q4 this year already for 2022, to handle services, warehouses, and also the first assembly jobs with local manufacturing to follow next year. Since we launched our North America business in January, the receptivity for our product has been very positive, despite the electric vehicle adoption rate sitting around 5% in the U.S. U.S. federal government initiatives such as NEVI will further accelerate the EV growth in the U.S., and with our U.S. presence we will be well-equipped to serve our American customers with local production and services. With this overview, I would like to hand it over to Wolfgang, CFO ADS-TEC Energy, who will provide a more detailed explanation around the financials. Afterwards, I will be happy to answer any questions you might have. Wolfgang, over to you.

Wolfgang Breme, CFO

Thanks, Thomas, and good day everyone. After covering our H1, '22 results, including revenue, results before tax, gross profit, order book, cash on hand, and charging unit sales, I will provide some guidance for the second half of 2022 with respect to revenue, order book, and charging unit sales. H1 2022 revenue was EUR9.431 million, down EUR11.5 million from revenues of EUR20.9 million in the first half of this year. As we stated in our April earnings call, we expected our revenue for the full year 2022 to be backloaded to the second half, and this is what has played out, accounting for just EUR9.4 million for the first half of this year. Given our current order backlog of EUR176.7 million, we still feel quite comfortable with the full year revenue guidance range. The decrease in revenue from contracts with customers for the first six months of fiscal year 2022, in comparison to the first six months of fiscal year 2021, is mainly driven by the decrease of revenues in the area of charging. A major contract with a customer that was completed in the first half of 2021 could not be fully compensated by new contracts in the first half of 2022. The service segment contributed EUR636,000, representing a decrease of about 39% year-over-year, driven by reduced sales of spare parts and the lower amount of services due to the decrease in sales of the charging platform. The commercial and industrial business had EUR2 million in revenue, equating to about a 65% year-over-year increase. We are pleased to have announced the diversification of our revenue stream, which we believe lays the foundation for a strong fiscal year 2022. From a geographic perspective, H1 2021 revenue was 94% from Germany. The extension of our sales efforts in the second half of last year and the first half of this year resulted in 54% of our H1 2022 revenue coming from outside of Germany, including new business from Spain, the UK, Switzerland, and other European countries. Our international sales expansion continues with the launch of our U.S. business in late 2021, which accounted for 27% of our H1 2022 revenue. Turning to gross profit and loss, our H1 2022 came in at minus EUR4.8 million, down from EUR1.5 million positive in H1 2021. The reduced gross profit mainly resulted from the significant rise in supply chain costs in the first quarter. Because of material shortages at some of our suppliers, we had to revert to brokers to complete customer orders. Since then, we have redesigned our supply chain, and we are confident that we will return to the gross margin levels we have seen in the past. Secondly, the build-up of our manufacturing facilities has led to an increase in payroll-related costs in the cost of sales area. Regarding OpEx, we saw a significant increase in SG&A expenses compared to H1 2021. Legal and consulting fees went up because of the merger with EUSG and our status as a publicly-listed company now. Personnel expenses increased due to the establishment of our U.S. presence. Additionally, the first-time recognition of stock option expenses contributed to the increase. Other expenses rose due to higher insurance expenses. Finance income was largely driven by income from warranty valuation and operative currency gains because of the stronger U.S. dollar compared to Europe. In total, we reported a quarterly net loss of minus EUR7.309 million for the first half of 2022. Turning to the balance sheet, inventory rose to EUR28.462 million, driven by the higher expected business volume in the coming quarter. Trade and other receivables increased to EUR7.8 million, mainly due to higher advance payments to suppliers as part of our supply chain strategy to secure selected components. Trade and other payables increased due to growing deposits from our customers. Our cash balance decreased to EUR65.72 million from EUR101.8 million at the end of 2021, mainly driven by higher working capital due to strong growth of the business. Now I would like to turn to guidance for the second half of 2022. We have been a public company for two quarters now, and our business is really growing with booked orders of more than EUR152 million, a huge increase compared to previous years. We are very excited about the reception in the U.S. for our battery-buffered charging technology and are having very constructive conversations with many customers in all our targeted segments. As a result, we expect revenue for the fiscal year 2022 to come in the range of EUR80 million to EUR100 million, with this revenue being backloaded to H1, 2022. The shipment, of course, depends upon the stability of the supply chain. Regarding charging units sales, we provided guidance in April in the range of 400 to 500 units and anticipate that number will still fall in that range. However, compare that number to the second half of fiscal year 2020, where the majority were shipped in the latter half of the year. We expect our gross margin to improve by the end of fiscal year 2022. Finally, we expect our current cash on hand to support us through the next quarter. That said, we will continuously monitor our capital structure and growth opportunities for the future. With that, I will turn back to Thomas.

Thomas Speidel, Founder and CEO

Thank you, Wolfgang. It's important to reiterate what we mentioned last year: this year will be heavily weighted towards the third and fourth quarters. Those familiar with me understand how crucial it is to articulate the ADS-TEC business model and the unique transition we are witnessing. I want to clarify that we are not just a charging company and therefore, we are not directly comparable to all the emerging charging network companies. We envision a future that is fully electric and renewable, where sources like wind and solar create energy dynamically in time and space to meet demand. The push for electromobility and the growing need for heat will require significant transformations. We need to integrate decentralized generation and consumption while managing low peak demands. Simply expanding the grid won’t address this issue. Decentralized intelligent platforms that incorporate storage solutions make this possible. The storage allows for the flexibility needed, and charging is one part of that equation. ADS-TEC is dedicated to developing, producing, maintaining, and servicing these intelligent decentralized platforms. We position ourselves as providers of these platforms, including long-term services. Our customers can leverage this platform to implement optimal operating models using their own intelligent software, taking advantage of all the capabilities our platform offers. Opportunities such as grid services, frequency control, peak capping, energy trading, solar integration, and fast charging enable us to provide solutions, like the ChargePost. Customers can create their own applications or connect to their platforms to maximize the benefits for their users. We support this technology through software, APIs, and various services. We take pride in having secured new orders from customers now utilizing these expanded business models, going beyond just conventional charging. The success indicates that a lot can be achieved here, and in fact, it can be more profitable than merely charging EVs, leading to increased revenue from various bundled applications. ADS-TEC operates as a platform company offering customers more than just hardware or storage solutions. We aim to be long-term partners for future energy providers to orchestrate, operate, and develop individual business models for millions of end users on our platforms, tailored to local optimization needs. I am very pleased that this vision is increasingly materializing with our latest orders and successes. Accompanying the presentation, we have included images of installations that showcase not only the ChargePost in various locations but also examples from our commercial and industrial portfolio. These visuals illustrate how the concept of thousands of decentralized energy platforms can currently take shape and highlight where it is already applicable. Yes, we are a company that has recently undergone de-SPACing. We recognize that the current market conditions are challenging and that we are in a unique global situation. Nonetheless, we are proud to be addressing this important future topic. Our technology and production capacity have been validated by an order intake that exceeds our forecasts, and the potential for growth is supported by binding orders. Market feedback indicates that we can keep the momentum going. At this juncture, it is vital for us to secure financing for this growth. We must counter long lead times and challenging supply chains with early orders and proactive procurement strategies. A significant factor in our competitiveness will be who can secure the necessary capital to ensure timely deliveries. Now, I will hand it over to Cary, and we look forward to your questions. Cary, over to you.

Operator, Operator

Ladies and gentlemen, we will now start the question-and-answer session. The first question comes from Matt Summerville with D.A. Davidson. Please go ahead with your question.

Will Jellison, Analyst

Hi, this is Will Jellison on behalf of Matt Summerville today. I wanted to start.

Thomas Speidel, Founder and CEO

Operator, can you give us the question please?

Operator, Operator

Yes, the actual questioner is live. Can you hear us, Cary, Thomas?

Thomas Speidel, Founder and CEO

Yes, we can hear you.

Operator, Operator

Yes, the questioner is live. Please go ahead.

Will Jellison, Analyst

Okay, great. Thank you. This is Will Jellison from D.A. Davidson on for Matt Summerville today. I wanted to start the questions by asking you about the backlog. With EUR176 million, it would seem that a lot of the revenue you expect to generate in 2023 may already be secured in that backlog. I was wondering, what is your level of visibility into 2023 deliveries that you believe the current backlog provides you? And what about the actionability of the current pipeline of orders that you might be in conversations with at the moment?

Thomas Speidel, Founder and CEO

So from the bookings we have now up to date, everything is supposed to be delivered by the end of 2023. So there are no longer-term orders in the backlog. That's number one. And number two, we see a very high pipeline and numerous opportunities on our sales side. But that's not booking; it's in our pipeline.

Will Jellison, Analyst

Right. Okay. And then I wanted to ask my second question about the U.S. facility. If I remember correctly, that facility was originally envisioned to be very similar to your current plant in Dresden producing about 5,000 chargers a year. I was wondering what is the timeline from the facility opening in quarter four of this year to ramping towards that full production rate? What's the timeline towards that?

Thomas Speidel, Founder and CEO

Yeah, thanks for that question. So we've started to search for the right site in January. We plan to be in our facility or location in June, which has now been postponed to end of September. A lot of official work and evaluation consulting work has had to be done. And to answer your question this year, we start with the warehouse, with battery assembly, and with our service team. And so by next year, and the years after, we plan to go deeper into production development.

Will Jellison, Analyst

Understood. Thank you.

Thomas Speidel, Founder and CEO

Yes. You are welcome.

Operator, Operator

The next question is from the line of Graham Price with Raymond James. Your question please.

Graham Price, Analyst

Hi, good morning. This is a phenomenal chance. Pleasure to ask a question on your call. I wanted to look at gross margin first. The margin in the first half of the year was obviously quite negative, reflecting, I assume, the low volume. You said it should turn positive in the second half of the year. Can you maybe give a range for what you think gross margin will be for 2022 as a whole?

Wolfgang Breme, CFO

Yes, good morning to you. This is Wolfgang speaking. So you're right that our gross margin turned negative in the first half of the year, as I mentioned, due to supply chain constraints, which we saw in the first quarter. Because of the reasons we all know, we expect the gross margin to turn positive again in the second half of the year, as I said, because we have just changed our supply chain and changed also our way of securing volumes for critical components. Nonetheless, it's too early to say right now where the gross margin is exactly going to be by the end of the year, because we still have to take into account what we said: the supply chain is uncertain. So we would not give out a clear number at this point.

Thomas Speidel, Founder and CEO

So what we did, just to add there, we adjusted the pricing because, as we know, inflation and material costs went up in the first half of the year. We had to cover some of these increases because of binding contracts. Then the market would go down. Now we adjusted the prices over the last week, which means that our gross margin is already on the way in the right direction month by month.

Graham Price, Analyst

Let me also ask you about the German electric vehicle market. For some of the similar reasons you mentioned, supply chain, battery shortages, we have seen maybe lower than expected EV sales in Germany over the last five, six months, despite of course, very high oil prices. Is that having any effect on the build-out of charging infrastructure in Germany?

Thomas Speidel, Founder and CEO

No, we cannot see that. And if you look at the numbers, first of all, there are more open orders that cannot be fulfilled by the automotive OEMs. Lead times are very long, and we now see the high order income for ADS-TEC, and the numbers we have on our backlog are higher. We see that the acceleration of building out the network is at the beginning. So we expect that now it's a race of who will own all the charging sites. We have explained that several times that once we have these public chargers on the highway, where you pay now EUR0.80 or even more, there are hundreds of thousands of possible charging points at our municipalities, hotels, and industrial sites. We see now that the private sector is catching up, and they are saying, 'Okay, I cannot drill a hole in my garden and get oil out of it to charge my car, but I can use the electricity on my own ground to supply and provide electricity for my fleet.' Especially now we see that electricity prices are going up significantly, and that is even a big driver for auto companies now to make themselves more green. They invest in photovoltaic and they invest in EVs. Unfortunately, they don't get it because the midterm is too long. So to answer your question very clear: no, we don't think that the demand for chargers will go down. We rather expect that now, over the next year, people will prepare themselves for the EVs coming.

Graham Price, Analyst

And lastly, I want to ask you something that I remember we talked about six months ago on your very first call. That was of course, right at the start of the war. Do you envision any acceleration in the charging infrastructure build-out in Eastern Europe? So Poland, Czech Republic, Bulgaria, Romania, the Baltic states. It seems logical that we would see this, but I'm curious about what you are observing in actual customer demand in the East.

Thomas Speidel, Founder and CEO

We see from all European countries that there is no special request coming from the Eastern countries as far as we can see it now.

Graham Price, Analyst

Okay. Okay. Very, very clear. Thanks again.

Thomas Speidel, Founder and CEO

Yes, you're welcome.

Operator, Operator

The next question is from the line of Anne Margaret Crow with Edison Group. Your question please.

Anne Margaret Crow, Analyst

Thank you. I've got a technical question, actually. I'm wondering if there is any difference between a charging point for fast charging a standard passenger car and one for charging an electric truck? Thank you.

Thomas Speidel, Founder and CEO

That's a very good question, Anne. Three to five years ago, they were providing a charging capacity of about 50 kilowatts, which was significant at that time. Now, with our prototype, we can achieve nearly 300 kilowatt charging power for private cars. Currently, most electric vehicles charge between 120 and 300 kilowatts, which is being integrated into our plans. This charging range is also valid for vans and lorries. For example, the F-150 light truck operates within this same capacity. We're also observing similar trends with Renault, GM’s Hummer, and buses. ADS-TEC is supplying chargers for public buses as well, which can utilize our 300-kilowatt chargers. Regarding larger trucks, discussions are ongoing about one megawatt or more charging capacity. Our technology allows us to adapt power electronics in parallel, enabling us to increase charging power. We could potentially create a system providing, for instance, 1.2 megawatts. However, we have not pursued that yet because the trucks are not available. We anticipate that a standard will be established in the coming year since the charging standard for megawatt capacity has yet to be finalized. To answer your question, we currently believe that in the range of 300 kilowatts, we hold a strong position for light trucks, buses, and vans. For larger trucks, such as those weighing 40 tons and above, capable of one megawatt charging, we can meet those needs, but we lack available products at this time and are awaiting the establishment of standards for truck platforms.

Anne Margaret Crow, Analyst

That's very helpful. Thank you.

Thomas Speidel, Founder and CEO

You are welcome.

Operator, Operator

The next question is from the line of Greg Wasikowski with Webber Research. Your question please.

Greg Wasikowski, Analyst

Hey, guys. Thanks for taking the questions. And sorry, I hopped on a little bit late, so my apologies if any of my questions have already been answered. But I'll start with the backlog. So your revenue reported in the FY22 guidance you can kind of back into what portion of your backlog is slotted for FY23. Is that all limited to the first half of 2023 activity right now, or is some of that FY23 backlog kind of stretching into the second half at this point? And pretty much just trying to get an idea of what the lead times are and how far out deliveries are stretching at this point.

Thomas Speidel, Founder and CEO

Yeah, as I said, these orders we have now on the backlog are planned and scheduled for the full year 2023. So not only for the first two quarters.

Greg Wasikowski, Analyst

Okay, got it. Thanks.

Thomas Speidel, Founder and CEO

We need to clarify that while our base pipeline is substantial, we are specifically discussing binding orders. There are around 170 binding orders that are set to be delivered by the end of this year. The key consideration now is how much material and how many commitments we can secure for purchasing battery modules and power converters. It's crucial to focus on lead times, as the supply chain for some components remains critical. Currently, we are experiencing lead times of 15 weeks or more. Therefore, the sooner we acquire the major components, the better positioned we will be to meet customer needs promptly.

Greg Wasikowski, Analyst

Understood, okay. And then my follow-up on the U.S. market: You mentioned several key segments driving that business growth since January in the U.S. What segment in particular is kind of leading the charge? What segment are you seeing the most demand? And then also on the partnership side of things in the U.S., would you be actively seeking partnerships similar to those you have with JOLT? Or would potential partnerships come in a different form in the U.S.?

Thomas Speidel, Founder and CEO

Yes, our sales team has many discussions right now. One of our major partners that we announced is GenZ, which is similar to JOLT, and with GenZ we are addressing now also the U.S. auto dealerships and network. This is what is ongoing right now. Some of the orders we announced are coming from that segment.

Operator, Operator

Hello? Does this answer your question? Greg, can you hear me? I think I lost him.

Greg Wasikowski, Analyst

Yeah, that's great. Thank you, guys.

Thomas Speidel, Founder and CEO

We have one more question.

Operator, Operator

Yes. And the next question is from Michael Filatov from Berenberg. Please proceed with your question.

Unidentified Analyst, Analyst

Hi, guys. This is Eric on Michael from Berenberg. So I was wondering if you could provide some clarity on your revenue mix. I know the majority comes from charger sales, but what about from services and commercial and industrial segments too?

Wolfgang Breme, CFO

From this first half, this year's revenue of EUR0.6 million came from services and EUR2 million came from commercial and industrial applications, so that was EV charging.

Unidentified Analyst, Analyst

Okay, thank you. Also for that 400 to 500 expected for this year, what is the geographical mix? What do you guys see on the horizon? Is it mostly Europe? Or would it be more split a bit evenly from Europe and the U.S.?

Thomas Speidel, Founder and CEO

So it is almost half and half.

Unidentified Analyst, Analyst

Half, okay. And if you don't mind, I just have one more. I don't know if it was asked already. My line dropped off a bit earlier. But for the energy shortage in Europe, do you expect that to impact you, specifically your facility in Germany going into the winter?

Thomas Speidel, Founder and CEO

That's a good question. We're discussing that all the time and trying to be as best prepared as we can be. So to be honest, nobody knows. What we see is that this is helping our C&I business, because people are now willing to invest. This is what I try to explain to them. Now we see the acceleration, and the auto PV installations will go up because first of all, it's now on our mandate. So they will increase. Secondly, the electricity price is so high that storage makes perfect sense. It's not only that early adopters are thinking about storage and optimizing their electricity flow and cost. It's now more or less necessary. Therefore, yes, we see that the current situation in Europe is amplifying that business. Your question was: what will be the outage or power outage? Nobody knows. I think we are living in a country with one of the most stable networks. I'm confident that they can manage it and even we will see it might be for one day or some hours. But I don't expect a significant power outage for many days. I don't expect that.

Unidentified Analyst, Analyst

Okay, thank you. That really helps.

Operator, Operator

There are no further questions, and I'll hand back to Cary Segall for closing comments.

Cary Segall, Head of Investor Relations

Thank you. Thanks, everybody. This concludes our earnings call presentation. We appreciate your interest in ADS-TEC and for taking the time to hear our update. If anyone has any additional questions, please don't hesitate to reach out, and we can schedule a follow-up call. Thanks again. Be well and stay safe.

Operator, Operator

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