Earnings Call Transcript - AZZ Q1 2025

Operator, Operator

Good day, and welcome to the AZZ Incorporated First Quarter 2025 Earnings Conference Call and Webcast. Please note this event is being recorded. I would now like to turn the conference over to Ms. Sandy Martin of Three Part Advisors. Please go ahead, ma'am.

Sandy Martin, Investor Relations

Thank you, operator. Good morning, and thank you for joining us today to review AZZ's financial results for the fiscal 2025 first quarter, which ended May 31, 2024. Joining the call are Tom Ferguson, President and Chief Executive Officer; Jason Crawford, Chief Financial Officer; and David Nark, Senior Vice President of Marketing, Communications and Investor Relations Officer. After today's prepared remarks, we will open the call for questions. Please note the live webcast for today's call can be found at www.azz.com/investors-events. Before we begin, I want to remind everyone that our discussion today will include forward-looking statements made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. By their nature, forward-looking statements are uncertain and outside of the company's control. Except for actual results or comments containing forward-looking statements may involve risks and uncertainties, some of which are detailed from time to time in documents filed by AZZ with the Securities and Exchange Commission, including the annual report on Form 10-K for the fiscal year. These statements are not guarantees of future performance. Therefore, undue reliance should not be placed upon them. Actual results could differ materially from these expectations. In addition, today's call will discuss non-GAAP financial measures. Non-GAAP financial measures should be considered supplemental to, not a substitute for GAAP financial measures. We refer to the reconciliation from GAAP to non-GAAP in today's earnings press release. I would now like to turn the call over to Tom Ferguson.

Tom Ferguson, CEO

Thank you, Sandy. Good morning, and thank you for joining us today. I will discuss the first quarter results and cover our outlook for the rest of the year. Jason Crawford, our newly appointed CFO, will walk through our detailed financial results, and David Nark will provide an industry update on our end markets. Then we'll open it up for some questions. Our first quarter results met the higher end of our expectations, and we are very pleased with the performance and emphasis on execution in both segments. We reported record quarterly revenue of $413 million, improved segment profitability, and expanded EBITDA in both dollars and in terms of margins. Our results generated significant cash flow from operations for the first three months of the year, with topline revenue growth driven by strength in a number of our end markets, including construction, bridge and highway, transmission and distribution, and renewables. Non-financial potential project spending for both public and private projects is now tracking higher than pre-pandemic levels. This year, we have seen strong public sector construction, which demonstrates the demand for energy and manufacturing that David will cover, alongside private spending and commercial construction continuing to be impacted by interest rates. The shift in market dynamics has also influenced residential construction projects. Continuing with our first quarter results, Metal Coatings EBITDA margin grew to 30.9%, exceeding the prior year and slightly ahead of our target margin range of 25% to 30% due to operational improvements and zinc productivity enhancement. Precoat Metals EBITDA margin of 20.2% was also meaningful. As we have noted before, any reasonable uptick in volume helps drive margins above the 20% mark and towards the upper end of our communicated range of 17% to 22%. In addition to the solid execution of our operational initiatives in the first quarter, we also completed a public offering of common stock to fully fund the redemption of AZZ Series A convertible preferred stock. Jason will discuss this more in a few moments, but the strategic rationale and timing were critical as the redemption premium was set to escalate on May 12. The timing was right, and we were pleased with the efficient execution of this transaction with the support of our capital markets partners. In less than 24 months, we have fully redeemed and retired the mezzanine financing associated with the acquisition of Precoat Metals. The Precoat acquisition further supported our long-term strategy to improve the return profile and derisk our business by transforming into a pure-play metal coatings company with significant scale, expertise, technology, and a very strong balance sheet. This year, we remain focused on our operational and financial objectives. I'm gratified that our efforts in developing a strong team with a solid bench of talent over the last several years have resulted in positive momentum with strong organic growth and profitability improvements in both segments. We attribute this success to our team's well-executed strategic actions centered on revenue growth, operational excellence, margin enhancements, and working capital improvements, all of which contribute to the generation of free cash flow. I am proud of the work and dedication of our teams in both segments and in our corporate headquarters. We also continue to prudently deploy capital this year to high-return investments for growth, further debt paydown, and cash dividends to common shareholders, while we continue to strengthen the balance sheet. We are evaluating a growing list of acquisition candidates but plan to be judicious as we evaluate leverage, strategic fit, ability to drive synergies, and timing. We reduced debt by $25 million this quarter and repriced our term loan in March to lower interest costs. A significant company initiative this year is the completion of our new aluminum coil coating facility in Washington, Missouri. We expect to begin equipment testing in the third quarter with plans to be operational by early in calendar year 2025. Our decision to build this facility was evaluated based on long-term contractual customer commitment that accounts for 75% of the plant's total capacity. This facility should be well positioned to respond to the secular shift from plastic to aluminum in the beverage industry, and we are pleased to report that this important project remains on schedule. AZZ is recognized for its number one market position in both of our Metal Coating segments with strong and growing economic moats, providing us with a significant competitive edge. This business edge is built on a differentiated, highly sustainable, and environmentally friendly Metal Coating solutions. We bring over 65 years of technical expertise, customer-centric technologies, and strategically-located facilities across North America. Our relationships with blue-chip customers, our scale, and culture of operational excellence are crucial elements that we believe will continue to drive our future success this year and for years to come. And with that, I'll turn it over to Jason.

Jason Crawford, CFO

Good morning. As Tom mentioned, we reported first quarter sales of $413.2 million compared to $390.9 million in the prior year quarter. Total sales increased by 5.7% over the first quarter of last year, with Metal Coating sales up 4.7% and Precoat Metals sales up 6.5%. The first quarter's gross profit was $102.7 million or 24.8% of sales compared to $97 million or 24.8% of sales in the prior year quarter. Lower zinc costs in the Metal Coatings segment and productivity improvement in both segments helped offset wage and other inflationary headwinds, resulting in steady gross margins as compared to the prior year. Selling, general and administrative expenses were $32.9 million in the first quarter or 8% of sales compared to $31.5 million or 8.1% of sales in the prior year first quarter. Operating income improved to $69.7 million or 16.9% of sales compared to $65.5 million or 16.8% of sales in last year's first quarter. Interest expense for the first quarter was $22.8 million compared to $28.7 million in the prior year. The decrease is primarily due to consistently paying down debt and our lower weighted average interest rates from various debt repricings that have occurred over the last 12 months. Equity and earnings of unconsolidated subsidiaries for the first quarter increased to $3.8 million compared to $1.4 million for the same quarter last year. This increase is due to higher earnings from our 40% joint venture ownership in AVAIL. Current quarter income tax expense was $11.4 million, reflecting an effective tax rate of 22.4% compared to 25.3% in the prior year quarter. Reported net income for the first quarter was $39.6 million compared to $28.5 million for the prior year quarter. As Tom mentioned, we redeemed our company's 6% Series A preferred stock on May 9 of this year. The redemption premium, the amount in excess of the face value of the preferred stock of $75.2 million was recorded as a dividend in our first quarter income statement. This resulted in a GAAP loss to common shareholders of $36.8 million and a GAAP diluted loss per share of $1.38. Since our non-GAAP measure for adjusted net income excludes the Series A redemption premium, AZZ reported adjusted net income of $44 million or adjusted diluted EPS of $1.46. This compares favorably to the prior year's adjusted net income of $33.4 million or adjusted diluted EPS of $1.14. On an adjusted basis, our earnings increased 31.9% from the first quarter of the prior fiscal year. The timing is right to redeem the Series A preferred stock to avoid further annual increases. While the redemption resulted in a one-time redemption premium payment of $75.2 million, the decision to redeem the Series A preferred stock during the first quarter allowed the company to avoid $14.4 million in future annual preferred stock dividends and future escalations in the redemption premium by a minimum of $36 million per year. First quarter adjusted EBITDA was $94.1 million or 22.8% of sales compared to $85.4 million or 21.8% of sales in the prior year. This 100 basis point improvement in adjusted EBITDA margin was primarily driven by improved earnings and sales volume strength in both segments. Turning to our financial position and balance sheet. We generated cash flow from operations of $71.9 million, which was more than 50% higher than the first quarter of the prior year. After funding Q1 capital expenditures of $27.4 million, our free cash flow was $44.6 million. As Tom mentioned, we're expanding our coil coating capabilities by constructing a new 25-acre aluminum coil coating facility in Washington, Missouri, which we anticipate to be operationally in calendar 2025. We expect to spend approximately $63 million on the new facility this fiscal year, of which $16 million was paid in the first quarter. Our capital allocation strategy consists of investing in the business, paying down debt, returning cash to our shareholders through dividends and evaluating potential bolt-on acquisitions. During the first quarter, which ended May 31, we reduced debt by $25 million, and we expect to pay down a total of $60 million to $90 million for the full fiscal year. Our current trailing 12-month debt-to-adjusted EBITDA is 2.8x, which compares favorably to 3.5x 12 months ago. As Tom touched on, we completed a secondary public offering earlier this year by issuing 4.6 million shares of common stock and raising $322 million or $308.7 million net of transaction expenses. One hundred percent of these net proceeds from the secondary offering were used to redeem the Series A preferred stock. We believe this full redemption of the preferred stock significantly improves the company's capital structure. At the end of the first quarter on May 31, we continue to maintain ample liquidity and flexibility through a $400 million revolver with no debt maturities until calendar 2027. Finally, in addition to paying down debt, during March of this year, we repriced our Term Loan B, improving our margin from SOFR plus 3.75% to SOFR plus 3.25%. Our current interest rate swap agreement continues to fix our variable rate interest for a notional portion of our debt through September 30, 2025. With that, I'd like to turn the call over to David Nark.

David Nark, SVP Marketing and Communications

Thank you, Jason, and good morning, everyone. Momentum from year-end in February carried into the first quarter with strength in a number of end markets. For Metal Coatings, we reported record high sales driven by high single-digit volume expansion for the quarter. As Tom mentioned, we are now seeing an elevated number of public work projects related to essential industries that include bridge and highway, construction, utility T&D, renewables, notably solar, as well as crucial chip plant construction projects. We believe that the public sector has ongoing spending strength, which we expect to continue this year. The Precoat Metals segment continued to perform better than the market in the first quarter with total volume increases in the mid- to high single-digit range. In fact, certain end markets saw significantly higher increases ranging in the high single- to double-digit growth range for construction, HVAC fueled by inventory build of cooling products, the implementation of a new refrigerant change, and transportation based upon a rebound in the recreational vehicle market. In addition, Precoat works on essential data center construction projects by prepainting steel for the insulated wall panels used in modern data centers, which is a growing market for them. We remain enthusiastic about public sector spending and believe if interest rates soften later this year, it could signal growth in private sector spending and commercial construction. We also expect to continue to see secular growth trends and reshoring of manufacturing, the migration to aluminum and prepainted steel as well as the conversion from plastics to aluminum in the beverage space that will continue to benefit our business. As Tom mentioned, AZZ is the market leader in both Metal Coatings segments and provides superior capabilities as a high value-added metal coatings provider with scale, innovative coatings technologies, and customer-centric systems that have become significant cost advantages to our customers. With that, I would now like to turn it back over to Tom.

Tom Ferguson, CEO

Thank you, David. As David mentioned, we are optimistic about our business prospects this year and appreciate that our business is typically more brisk during the peak summer construction months. We also know that hurricanes, as we saw recently with Hurricane Beryl, and macroeconomic events or changes can impact our business. So we remain prepared for any fluctuations should it occur. While we don't have a crystal ball into what the economy holds for the balance of this year nor the impact of the upcoming elections, we have accomplished what we set out to do in the first quarter. We established new records for adjusted net income, adjusted EPS, and sales. So credit goes to both of our segment teams and also to corporate for accomplishing the redemption of our preferred shares during the same quarter. Today, we are pleased to reiterate previous guidance. Our fiscal 2025 sales guidance is $1.525 billion to $1.625 billion, adjusted EBITDA guidance of $310 million to $360 million, and adjusted EPS guidance of $4.50 to $5. Capital expenditures for the current fiscal year are expected to remain unchanged at $100 million to $120 million, including approximately $63 million related to the new greenfield plant. The equity and earnings from our minority interest in the AVAIL joint venture is expected to be $15 million to $18 million this year, and debt paydowns are planned in the $60 million to $90 million range. We are focused on paying down debt and will continue to evaluate bolt-on acquisition opportunities that are beginning to enter the pipeline. Our long-term strategic plans include continuing to focus on growing the business organically and inorganically. We offer a highly differentiated value proposition to customers through a tolling model that positions us with fewer commodity and financial risks simply because we do not own the steel or aluminum that we coat. Our margin and return profiles position us well this year to continue to generate significant free cash flow and maintain adequate liquidity to grow the business while maintaining a solid balance sheet. This all translates into the creation of long-term value for our shareholders through our sustainable solutions. We continue to recognize that by investing in our people and relentlessly executing our strategy, we can continue to accelerate AZZ's value creation. Now with the operator, please open up the call for questions.

Operator, Operator

And the first question will come from Lucas Pipes with B. Riley Securities. Please go ahead.

Lucas Pipes, Analyst

Good morning. Thank you so much for taking my question. The first one is just on your EBITDA guidance. Q1, very solid start to the year. You're annualizing to $376 million. The range for the full fiscal year is $310 million to $360 million, so well below kind of where you've been annualizing, especially at the midpoint. You mentioned some factors, seasonality, the election, the hurricane. But to what extent are you really conservative when it comes to the rest of the fiscal year?

Tom Ferguson, CEO

Thank you very much for your comment. Yes, Lucas, I mean, generally, we tend to be conservative. As you probably have seen, we tend to be conservative. We had updated the guidance in April, which was a little out of cycle and prior to then having the offering and then finishing up the quarter. But our normal cadence would be, as we finish up the second quarter, to look at updating guidance at that point. That also gives us a better benchmark since we'll have finished what is typically a strong summer construction season. The quarter is off to a good start, so we feel good about our outlook at this point. But we're just a bit hesitant given nothing specific, so I don't want to say that. Hurricane Beryl, while it affected a couple of our sites, we're talking about a handful of mandates of production that were affected. For the most part, our sites had lost power in three or four sites, but our customers did as well down in Houston. So that work is still going to get done, and we'll clear that out within a few days, so overall, the net impact is very minor. In the longer term, almost sadly, in some cases, I'd say we do tend to pick up work after hurricanes because you just look at some of the photos of the down transmission towers, poles, docks, and piers— that tends to be stuff that gets galvanized. So over the longer term, we tend to pick up work. The economy, as we showed, we had record sales in the first quarter. Our teams are striving hard, taking some market share and driving volumes. So we're confident, but we just want to get back into our normal conservative cadence of how we set guidance.

Lucas Pipes, Analyst

That's very helpful. Thank you. And then my second question is somewhat related. On the Metal Coatings business, you came in at an EBITDA margin of 31%. I remember you've spoken to the target being 25% to 30% before. I wondered, was there anything unusual going on that margins were above the target range? I guess they can always go higher. Zinc, for example, was pretty volatile. Did that have an impact in any way? I would appreciate your perspective on this. Thank you.

Tom Ferguson, CEO

Yes, a couple of things. One, zinc didn't have much impact at all. For us, the cost in our kettles is still trending down, but we expect that with the higher LME zinc costs right now that it will flip over and start to gradually head back up as the year goes on. But that's all factored into our forecast and guidance already. I think the main thing was it shows that when our teams get a little extra volume that— keep in mind, we have no backlog. But at least on the Precoat side, we do have some customer steel and aluminum sitting in our warehouses and plants. On the galvanizing side, they basically have what's on their yards. So they're forecasting off of their sales. We have a great sales relationship management capability and our teams do well. So picking up an extra 90 basis points of EBITDA margin is substantial. A little bit of volume goes a long way, and they stayed focused on what they do. They maintain their value pricing philosophy, and just the leadership team and the plants executed outstandingly well. I don’t anticipate a fall off, but after the summer construction cycle, things typically get a little choppier as we head into the fall. The fourth quarter tends to be weaker. So we see that 25% to 30% being a consistent target, but if we continue to sustain margins above 30%, we would naturally revisit that range.

Lucas Pipes, Analyst

I really appreciate all the color to you and the team. Continue best of luck. Keep up the good work.

Tom Ferguson, CEO

Thanks, Lucas.

Operator, Operator

Your next question will come from Stephen Volkmann with Jefferies. Please go ahead.

Stephen Volkmann, Analyst

Hi. Good morning, guys. Thank you. And maybe just sort of pull on the same thread a little bit. I'm just curious, as you think about your end market exposures, are there any— it doesn't sound like this, David, but are there any end markets out there that are kind of choppy and giving you some concern for the rest of the year? Maybe there was some inventory stock or destock that we should keep in mind? Just anything that would keep you kind of conservative on the top line outlook?

David Nark, SVP Marketing and Communications

Great question. As you look at our stated end markets and the results, we saw growth across every stated end market other than the catch-all category of others. Kudos to the teams in both segments for their strong performance. When you look a little further into the segments, we saw some choppiness here and there, but overall, we don't see anything that worries us or brings too much concern across either segment.

Stephen Volkmann, Analyst

Okay. Great. Thank you. And then as I sort of skim through the 10-Q, I saw that there was some headwind on mix. Can you just elaborate a little bit on sort of what you're seeing there?

David Nark, SVP Marketing and Communications

Yes. I think, again, as you look at each segment, we had some shifts with a variety of products. Nothing really jumps out at us too much as far as any kind of issues or concerns. Overall, the results by both segments were really solid.

Stephen Volkmann, Analyst

Yes, agreed. Does this mix headwind continue? Or how do we think about forecasting that for the rest of the year?

Tom Ferguson, CEO

No. I think for mix, it can shift. Our plants, particularly on the galvanizing side, have 41 different plants. As a result, they chase various segments of the market as needed. If they need load, they will go after structural products, or if structural products slow up, they will target smaller segments. If there are shifts in demand, we typically do not forecast these but monitor them. Looking forward, I wouldn't say there is any significant change expected.

Stephen Volkmann, Analyst

All right. I appreciate it. Thank you.

Operator, Operator

The next question will come from Mark Reichman with Noble Capital Markets. Please go ahead.

Mark Reichman, Analyst

Yes, while sales were up in both business segments, it looked like the average selling price was down in Metals Coating due to the product mix, and the average price was flat in Precoat Metals. I was just wondering to follow up on that last question, what's your outlook for pricing? Will the results be more volume-driven? Or do you expect a change in the mix that might help the prices going forward?

Tom Ferguson, CEO

I think we're generally seeing— so a couple of things. Despite our efforts to separate zinc costs from our pricing models, the reality is that when zinc trends upward, it makes it easier to hold prices. Customers are aware that it significantly impacts our costs. As we look forward, it should get a bit easier. It's part of the challenge of being a public company as we have to talk about zinc costs, which heavily influence pricing. However, we ensure to sell on the basis of value added. As we project ahead, we expect prices to hold due to continued inflation on various costs including wages, acid, and energy. The upward trend in zinc prices bodes well for our ability to maintain and deliver value pricing.

Mark Reichman, Analyst

And the second question is you've got the take-or-pay contract for 75% of the output of the Washington, Missouri facility. That's roughly $50 million to $60 million of annual revenue. Do you expect to sign additional contracts before the facility is completed?

Tom Ferguson, CEO

I think that's possible. We already have other customers. This isn't a new process for us. We have another plant in St. Louis that operates in a similar manner but with smaller capacity. Therefore, we’re balancing capacity and load. We have solid relationships with customers that allow us to pursue additional contracts. The contract was necessary given the investment's scale. Typically, our contracts are somewhat looser than this. We will be looking to bring in additional customers to utilize the capacity effectively; we will continue to pursue these opportunities vigorously.

Mark Reichman, Analyst

That's very helpful. Thank you. Much appreciated.

Operator, Operator

The next question will come from Kevin Gainey with Thompson Davis. Please go ahead.

Kevin Gainey, Analyst

Good morning, gentlemen. Congrats on the great quarter.

Tom Ferguson, CEO

Thanks.

Kevin Gainey, Analyst

Maybe if we can start on Precoat margins, they were flat year-over-year. Is it more of a one-quarter phenomenon or what are you guys thinking for the balance of the year there? How do you see that over the longer term? Is there still opportunity to push those up?

Tom Ferguson, CEO

Yes, there are still opportunities. Customer inventories in our plants have increased, which indicates that we will run that product soon. That gives us confidence in our volume. Sustaining the volumes should help maintain margins above 20%. We also have opportunities to improve quality and productivity across our fleet of plants. Last year we faced challenges where excessive customer inventory limited our productivity, but we won't let that happen again. The 20% margin range is one we aim to hold and improve.

Kevin Gainey, Analyst

That sounds good. And then maybe—welcome to the call, Jason, I’ll give you this chance to talk about your cash flow. How are you guys planning to generate cash from working capital as the year progresses?

Jason Crawford, CFO

If you look at our last fiscal year, we made a remarkable step change improvement in working capital. This year, while we are not projecting another step change, our focus is, operationally, to drive cash from operations. Any additional working capital we generate will be above and beyond that. It's not our number one focus, given our inventory levels and other components.

Kevin Gainey, Analyst

I appreciate that color. And then just to squeeze one more in because you guys brought it up. Maybe if you can talk about the data center opportunity for Precoat. Anything else you can provide on that?

David Nark, SVP Marketing and Communications

Yes. The data center market is a large and growing sector in the U.S. The Precoat business, in particular, has a customer for whom they supply prepainted steel for insulated wall construction, and that's being used in many modern data centers. It's a small but expanding area for them. It's an initiative that they are focusing on, and we're optimistic about its future.

Tom Ferguson, CEO

Yes. Additionally, as we sold off AIS, a large part of its output was electrical enclosures. The skins for these enclosures were not prepainted. So there's potential to convert those types of enclosures from post-paint to pre-paint. This is what our sales team is driving toward. We're focused on capturing emissions efficiently at a competitive cost, which is exciting for us as we move into this space. We've initiated some efforts in the AVAIL segment.

Kevin Gainey, Analyst

Yes, that sounds great. Looking forward to it.

Tom Ferguson, CEO

Appreciate the questions.

Operator, Operator

Your next question will come from Jon Braatz with Kansas City Capital. Please go ahead.

Jon Braatz, Analyst

Good morning, everyone. Tom, a question for you. Broadly speaking, can you talk about the trend towards pre-coated steel and its relative position to your expectations when you acquired Precoat? Is the trend accelerating, slowing, or remaining steady? Can you analyze that?

Tom Ferguson, CEO

Yes. I think the trend is tracking pretty much as we modeled. What we're finding is that there are more opportunities than anticipated. We have a strong balance sheet and access to cash, allowing us to persuade customers to divest from their paint lines. We're finding opportunities perhaps exceeding our initial projections. The aluminum side has moved slightly slower than we thought, but conversion is happening. I’m drinking from a painted metal can myself, which demonstrates the ongoing trend. Overall, record sales align with our expectations on the trend, and the margin profile is more than we hoped. Sales teams are able to focus on these conversions, and we’re winning many competitive battles as we progress.

Jon Braatz, Analyst

Okay. Thank you. I saw in the press release you use a term I hadn't seen before, improved zinc productivity. I assume you're not implying that you're using less zinc in your galvanizing operations, but can you clarify what zinc productivity improvement specifically entails?

Tom Ferguson, CEO

Zinc productivity is a key metric for us. It involves using just enough zinc to adequately protect the metal without overapplying and impacting aesthetics. It focuses on how effectively we use zinc per pound. Tools like the Digital Galvanizing system have significantly enhanced our operational efficiency. Despite the challenges, our experienced kettle operators skillfully manage the process. The metrics show that optimizing zinc usage positively affects our margins, contributing to both quality preservation and minimizing rework.

Jon Braatz, Analyst

Is that making a considerable difference in margins? How much does it factor in?

Tom Ferguson, CEO

It does have a decent impact. I don’t want to reveal too much competitive information. We do have some competitors on this call, but optimizing our zinc utilization is a significant aspect of our operations.

Operator, Operator

Pardon me. It seems that our speaker line has dropped. Please stay connected while we reconnect. Pardon me, our speaker line has reconnected. The floor is yours.

Tom Ferguson, CEO

Yes. Let's go ahead and if we can, Operator, jump to the next individual on the queue.

Operator, Operator

And that next question will come from Mr. John Franzreb with Sidoti & Company. Please go ahead.

John Franzreb, Analyst

Thank you. Yes, all my questions have been answered.

Tom Ferguson, CEO

Thanks, Jon. We apologize for the disruption. We lost phone service here.

Operator, Operator

No worries. Okay. Thank you. As there are no more questions, I would like to pass the call over to Mr. Tom Ferguson for any closing remarks.

Tom Ferguson, CEO

Thank you, Operator. And thank you all for your time. Sorry for the phone disruption. But I look forward to updating you at the end of our second quarter, which will just be in a couple of months. Thank you all, and have a great day.

Operator, Operator

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