Greetings. Welcome to the Ecolab Second Quarter 2024 Earnings Release Conference Call. At this time all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. At this time, it is now my pleasure to introduce your host, Andy Hedberg, Vice President Investor Relations. Thank you, Mr. Hedberg, you may now begin.

Thank you, and hello, everyone, and welcome to Ecolab’s second quarter conference call. With me today are Christophe Beck, Ecolab’s Chairman and CEO, and Scott Kirkland, our CFO. A discussion of our results along with our earnings release and the slides referencing the quarter results are available on Ecolab’s website at ecolab.com/investor. Please take a moment to read the cautionary statements in these materials, which state that this teleconference and the associated supplemental materials include estimates of future performance. These are forward-looking statements and actual results could differ materially from those projected. Factors that could cause actual results to differ are described under the Risk Factors section in our most recent Form 10-K and in our posted materials. We also refer you to the supplemental diluted earnings per share information in the release. With that, I’d like to turn the call over to Christophe Beck for his comments.

Thank you, Andy, and welcome to everyone on the call. I'm happy to share my perspective before we jump into Q&A. But in summary, with 35% adjusted earnings growth in Q2 and 25% to 29% earnings growth expected for the full year, I feel very good about where we are and even more where we are going. Ecolab’s very strong business momentum continued in the second quarter. Our team delivered for our customers and delivered for our shareholders. Organic sales growth remained in its previously forecast 4% to 5% range, as growth in our institutions and specialty segment normalized to a strong 7%, lapping last year's very strong 13%. Performance across the rest of our segments further improved. Our growth continues to be leveraged by exceptional organic operating income margin expansion. Margin increased by 360 basis points to 17%, which is a record second quarter margin for Ecolab, resulting in the very strong 35% growth in adjusted earnings per share. With continued top line momentum and operating margins expanding towards our 20% target, we remain firmly on our long-term 12% to 15% earnings growth trajectory. Looking at our segments, Institutional and Specialty continued to perform exceptionally well, delivering strong organic sales growth on top of last year's double-digit gains. Importantly, our business continues to significantly outperform softer restaurant food traffic trends, as our customers look to Ecolab's labor savings technologies to improve their operational performance. This growth was leveraged by continued robust operating income margin expansion with Institutional Specialties margin already exceeding 20%. Growth in our Industrial segment improved, despite continued volatile end market demand. Water sales growth accelerated to 4%, led by strong growth in downstream and double-digit growth in our global high tech business, which serves the rapidly expanding data center and microelectronic industries. As expected, sales in food and beverage were stable as good new business wins offset comparisons to last year's double-digit growth. Performance in paper improved also, a trend we expect to continue, as new business wins helped us accelerate those end markets stabilized. Our Healthcare & Life Sciences segment also showed better performance. Life Sciences growth improved to 4%, as attractive share gains allowed us to outperform ongoing short-term soft industry trends. We continue to expect modest growth in our Life Sciences business during the second half of the year. Healthcare sales were down modestly, as we continue to exit low margin business to improve our profitability. Our healthcare transformation is progressing very well. The previously announced sale of our Global Surgical Solutions business to Medline is moving exactly as expected. Subject to customary regulatory and closing conditions, we expect to close this transaction very soon. As discussed when we announced the sale last quarter, once closed, the transaction will reduce our Healthcare & Life Sciences quarterly sales by about $100 million and quarterly operating income by about $15 million. Longer term, healthcare continues to sharpen its focus on its very healthy anchor instrument reprocessing business that combines consumables, personal service, and digital solutions. While in other areas, but typically Ecolab business, there is much more to be done, I'm proud of the progress we've made to create a sustainable, profitable healthcare business that will deliver even stronger value to our important hospital customers. Pest Elimination once again continued to execute exceptionally well. Organic sales grew 9% and organic operating income grew double digits, benefiting from our enterprise cross-selling strategy and innovative digital capabilities. As we continue our long-term growth journey, I'm excited to share details of our One Ecolab initiative, which will help fuel 5% to 7% long-term organic sales growth and continue to expand our operating margins towards 20% and beyond. We know what best-in-class performance looks like: the best restaurants, the best hotels, and the best data centers. And we know how to deliver this for our customers due to our experience serving millions of locations in more than 170 countries across 40 industries. By leveraging more than 100,000 system connections and billions of proprietary data points on business outcomes, operational performance, and environmental impact, we can demonstrate how an entire network of customer sites can operate at best-in-class performance to deliver even more customer value. This will help us drive attractive growth by continuing to capture more share of our existing $55 billion cross-sell opportunity. At the same time, these new technologies will allow us to enhance the way we operate and serve our customers by realigning functions across hundreds of offices around the world into major global centers of excellence. The resulting total annualized savings of approximately $140 million are expected to be realized by 2027. Put simply, One Ecolab will enable customers to reach best-in-class performance on all fronts: business outcomes, operational performance, and environmental impact by leveraging Ecolab's complete offering. Looking to the balance of 2024, the confidence we have in our performance continues to strengthen. As a result, we're increasing our outlook for full-year 2024 adjusted EPS to the range of $6.50 to $6.70, up 25% to 29% versus last year. As previously discussed, this range includes an unfavorable impact in the second half of 2024 from the sale of our Global Surgical Solutions business. The unfavorable impact on 2024 adjusted EPS is now estimated to be $0.08 a share, which is a bit more than we had previously anticipated as we expect this transaction to close very soon. This is very good news, but it also has a bigger impact on the full year. FX, on the other hand, has also become more of a headwind and is now anticipated to be about $0.09 drag on full-year EPS. Despite this incremental headwind to EPS, we have still increased our guidance range, which demonstrates the strong underlying momentum we have in the business. We expect to keep growing our organic sales at a similar rate as in the first half of the year, driving 2% to 3% value pricing and 1% to 2% volume growth. Attractive operating income margin expansion is expected to continue in the second half of 2024. The rate of exceptional expansion will moderate as benefits from lowered delivered product cost continue to ease. Finally, we continue to anticipate quarterly adjusted diluted earnings per share growth to progressively normalize towards Ecolab's long-term 12% to 15% target as solid growth continues and impact from delivered product cost expected to normalize exiting 2024. As always, we will remain good stewards of capital by continuing to invest in the business, increasing our dividend, and returning cash to shareholders, with great business momentum and cash flows. Our balance sheet is in a very strong position. This provides us with many options to allocate capital to growth opportunities that will generate continued strong returns for shareholders. Ecolab’s future has never looked brighter. Our leading customer value proposition, where our technologies help customers improve operating performance while reducing water and energy use, is increasingly relevant and continues to fuel our growth, pricing, and margin expansion. We remain confident in delivering superior performance for our customers and shareholders in 2024 and beyond. Thank you for your continued support and investment in Ecolab. I look forward to your questions.

Thanks, Christophe. That concludes our formal remarks. Operator, would you please begin the question-and-answer period?

Yes. Thank you. We will now be conducting a question-and-answer session. And our first question is from the line of Tim Mulrooney with William Blair. Please proceed with your questions.

Christophe, good morning.

Good afternoon, Tim.

So I wanted to dig into the institutional segment a little bit here, which had really strong margins in the second quarter, probably the strongest I've ever seen from the second quarter. I think margins typically peak in the third quarter. But I'm wondering if that's the expectation this year, given what we saw in 2Q? And were there any one-time factors that could help me here that we should be aware of for our models? And if I could sneak in a part just to touch on the growth side that you're seeing in the institutional business right now, which looks really good. I was just curious how you're thinking about the sustainability of that strong performance in the second half of this year and into next year. Thank you.

Thanks for the question. Tim, I'm very pleased with the Institutional and Specialty segment. As you've seen, they’re lapping against the 13% top line growth in Q2 of 2023. So the 7% for this year is really strong, especially in a market where food traffic is down 4%. So quite a remarkable performance. The margin that we had in Q2 was very clean for that segment. As you know, it's a little bit seasonal, so by quarter, but generally, margins are going to remain north of 20%. As we've said, for the full year, we should reach the 22% targeted OI margin for 2024 as the segment keeps improving from there. So, good top line, huge interest from customers, very clean, and from a margin perspective, it’s very strong, and it’s going to keep improving as well in the next few quarters and years. I'm extremely bullish about that business because we're uniquely positioned to gain a lot of share at a very high margin.

Thank you. The next question is from the line of Ashish Sabadra with RBC Capital Markets. Please proceed with your question.

Thanks for taking my question. I just wanted to focus on the raw price dynamic. How should we think about the raw material tailwinds going into the back half of the year? We have continued to see pretty robust gross margin expansion. How should we think about the SG&A operating leverage going forward? Thanks.

Thank you, Ashish. I'll pass that question to Scott.

Yes, Ashish, thanks for the question. Just answering your first question, as we think about the DPC, as Christophe talked upfront, we saw the favorability in Q2, high single digits. We're expecting that favorability to taper as we go into Q3, sort of, call it low to mid-single digits. By Q4, raws will get really stabilized as we think about them and going into next year. Frankly, we're seeing a world where raws get back to sort of normal inflationary levels next year. Given the amount of raws, the thousands of raw materials that we buy, they move around differently. In some cases, like caustic, you've seen favorability, but in other commodities, you're seeing them go in the other direction, particularly oil-based commodities. As we think about the SG&A leverage, we are making really smart growth-oriented investments, which is driving the lion's share of the increase in the second quarter, the 6% year-over-year. Those investments are in frontline firepower, technology, and digital technology, which is all helping long-term productivity. We feel very good about that underlying productivity. So, in the long term, expect to get at least those historical levels of productivity going forward.

Our next question is from the line of Manav Patnaik with Barclays. Please proceed with your question.

Hi, good afternoon. This is Ronan Kennedy on for Manav. Thank you for taking my question. With the One Ecolab initiative, I understand the long-term guidance framework unveiled at the September 23 Investor Day. I understand that contemplated SG&A productivity in addition to GM recovery. But to what extent did you consider this One Ecolab initiative and related benefits? Was it fully considered, or is it incremental? And what's the impact on the targets, the trajectory, the timeline for realization, if any?

Thank you, Ronnie. It's all going to support our commitment to reach the 20% OI margin as quickly as we can. But most importantly, One Ecolab is a growth initiative. It's really helping fuel towards the 5% to 7% growth that we've also committed to, which leads to this 12% to 15% earnings per share growth. When you think about it for One Ecolab, our company has anchored its strategy on circling the customer and circling the globe for a very long time. The opportunity is huge, $55 billion and close to $3 billion for our top 35 customers. Well, up to now, we had to rely very successfully so, by the way, on our teams to work together to provide the whole value of Ecolab to our customers everywhere around the world. One Ecolab is today hard-wiring all that, so we can help our customers understand what's best-in-class performance that they should be aiming for, and we can help them understand how much additional value they could generate. This helps us grow and improve margins. It drives retention and loyalty, so ultimately, it's growth-focused, and the technology we're using will help us reorganize the way we serve those customers as One Ecolab. That will improve productivity. We've had 20 to 30 basis points in the past of SG&A productivity growth; that's going to improve as we implement One Ecolab. But at the same time, as Scott was mentioning before, I think we are also reinvesting some of that margin upside in growth investment. All-in-all, that will help us get to the 20% and potentially go beyond by driving 5% to 7% top line growth.

Our next question comes from the line of John Roberts of Mizuho Securities. Please proceed with your question.

Yes. Maybe just a follow-up on that, Christophe. It sounds like you plan on creating centers of excellence. What would the centers of excellence be? And is the charge for severance for some of the functions that are going to be replaced by the Center of Excellence?

So, John, I'll let Scott reply to that question. Generally, we’ve always evolved our way of working, especially with the technology capabilities that we have. Most of the investments share from all the technology to newer technology to that new way of working, which ultimately is going to help us grow faster and drive productivity. The good thing is that our team will keep strengthening at the same time, so there will be no net negative for anyone in the organization. Is that Scott?

Yes. Thanks, John. As Christophe said, this is not about restructuring. It's focused on growth. The savings, honestly, John, are pretty immaterial in context of the P&L. If you think about this over a three-year program, the net sort of cost and savings will be less than 1% on average over the next few years, really starting in 2025. But as we think about it, to your question about the nature and what's happening, it’s not about cutting jobs; it's about realigning where work gets done, moving work to these centers of excellence. We’ll support growth and create scalability. To your question about any special charges, those will include severance as we move work from many countries into these global COEs, but there will also be other costs, including advisory costs and facility-related costs. But these are going to happen over the next few years.

Our next question comes from the line of Joshua Spector with UBS. Please proceed with your question.

Yes. Hi. This is Lucas Beaumont on for Josh. Looking at the second half assumptions, typically Ecolab will see a step up in EPS of sort of $0.25 or more from 2Q to 3Q. Only a couple of instances in the last 10 years didn't trend that way. Your guidance is assuming it will only increase by $0.12 to $0.20 at the high end. So, firstly, can you walk us through why that normal seasonality doesn't make sense this year? Secondly, the typical Q4 move is flat to down modestly, which is essentially what you've assumed in your guidance. If we had a more typical 3Q move and a normal 4Q move, you’d be pointing more to around $680 for the year versus your guidance of $660. Please help me understand what's different in the setup this year.

Thank you. I'll let Scott start and I'll build on that.

Yes. As Christophe said earlier, there is a lot of movement. As you mentioned in the second half, don't forget there will be an impact from the surgical sale, which we talked about—about $0.08 in addition to the additional headwinds from FX. Overall, the sales are expected to continue to accelerate in Q3. Typically, sales are higher in the second and third quarters of the year. We expect margin expansion to keep going, but it will ease through the third quarter. These dynamics suggest we may not compare the second half to previous years. That said, our earnings growth will be very strong due to this underlying momentum.

Yes, I feel really good about the second half here. We're expecting 35% earnings growth in Q2, 14% to 20% expected in Q3, and 12% to 18% for Q4 with the midpoint of 15%. This demonstrates the strong business momentum and margin upwards momentum that we have here. So, very consistent, very steady, and I feel really good about where we're going.

Next question is from the line of Chris Parkinson with Wolfe Research. Please proceed with your question.

Great, thank you so much. I'd like to dig in a little bit more on Institutional and Specialty, given the macro dynamics and your relative outperformance. Can you break down everything happening in quick service and lodging on the institutional side, and when we think about the second half into 2025, does your team see improvements there, or will it primarily be market share gains driving the narrative for the foreseeable future?

Yes, thank you, Chris. It's mostly market share gain as it has been for the past few quarters. The food traffic in restaurants in the US is down 4%, so we're gaining share significantly. The main driver in Institutional and Specialty of our performance is that we are helping our customers with labor automation. They are facing labor shortages and wage growth, which creates a high turnover. Our chemical solutions and digital technologies are essential for them to serve more guests in a better way while using less labor. This is exactly what we’re providing them, and it's what competition can’t easily match. This driving growth at a higher margin benefits all parties involved.

The next question is from the line of John McNulty with BMO Capital Markets. Please proceed with your question.

Yes, good afternoon. Thanks for taking my questions. When you look at the industrial business, there are some decent growth areas like water and food and beverage, while others like heavier water applications may be struggling. Can you give us your outlook for the industrial markets as you look ahead into the back half of the year and early next year, especially concerning what you're hearing from customers in those struggling areas?

Thank you, John. Generally, I'm pleased with the progression of the industrial segment. Last figures show industrial has seen incredible work in terms of margin improvement. We are now at a record level. We started to shift from a defensive to offensive strategy, which is beginning to yield top-line momentum. We've moved overall segments from 1% growth in the first quarter to 2% in the second quarter. Within that, our largest business, water, is at 4%, which has been influenced by mining, where underlying water would be even stronger in downstream. Our global high-tech aspect is also doing well. I expect food and beverage and paper to continue improving in the quarters to come. Bottom line, industrial is on the rise with strong margins of 16% today, which is 200 basis points better than 2019.

Our next question is from the line of Jeff Zekauskas with JPMorgan. Please proceed with your question.

Thanks very much. In the first quarter, our year-over-year volume growth was 2%. In this quarter, your year-over-year volume growth is 1%. Is the reason for the deceleration a deceleration in volume growth in the institutional business due to tougher comparisons? And do you have a target for your global industrial business? You want to get to a 20% margin, and it's at about 16.5%. What's your goal for that business?

Thank you, Jeff. Industrial is currently at 16%, which is 200 basis points better than what it was in 2019. We ultimately want to get industrial to move towards 20%, and 18% will be a good step in that direction. If we achieve 18% for industrial alongside achieving target margins for all our other businesses, we could get north of 20% as a company. On your first question about volumes from 2% to 1%, that has to do with last year's Q2 institutional growth of 13%, affecting the year-on-year comparisons. All businesses are improving, which is why I feel good about the business momentum.

Our next question is from the line of David Begleiter with Deutsche Bank. Please proceed with your question.

Thank you. Christophe, back on the One Ecolab initiative. Do you need to make any additional investments to support this initiative? And how should we think about the rollout and initial revenue drivers from this initiative?

Thank you, David. It's going to be progressive, and there is no revolution expected here. A lot of groundwork has been done. The investments are planned in our numbers without any surprises expected. This initiative is focused on helping us reach the 5% to 7% growth target as quickly as possible. Our cross-sell opportunities worth $55 billion and the top 35 customers include $3 billion. This easier top line can be captured at a higher margin because we’re already serving those customers. So there’s no revolution required; it aligns with what customers have been asking for and what our teams want to offer.

Our next question is from the line of Pavel Molchanov with Raymond James. Please proceed with your question.

Thanks for taking the question. We haven't seen any M&A of late, even on a kind of bite-sized or tuck-in scale. I'm curious how you're currently evaluating the acquisition pipeline?

Thank you, Pavel. I can't provide too many details due to obvious reasons. We've made several smaller acquisitions over the last few years following the acquisition of Purolite at the end of 2021. We wanted to ensure that integration was done well and ensure our leverage ratio returned to 2. We’re getting there and are even more confident with the sale of the Surgical Solutions business. Our M&A pipeline is rich with both big and small opportunities, and having a strong-performing business with a strong balance sheet positions us uniquely to pursue the right opportunities. Our focus remains on three key priorities: water, digital, and life sciences.

Thank you. Our next question is from the line of Laurence Alexander with Jefferies. Please proceed with your question.

Hi. Just a bit on the other side of the coin. You did a divestiture in the low-margin healthcare, but are there other businesses you might look at exiting as well?

Not really. We regularly review our portfolio and assess who would be the best owner for each business. The surgical business was a clear candidate for divestiture because it is a product business where we cannot apply the Ecolab model effectively. That's one reason for the sale. We want to ensure our healthcare business can scale up successfully from a smaller base and focus on reprocessing instruments, which is more aligned with the Ecolab model. Beyond that, I don’t see any obvious businesses that don’t fit our portfolio or don’t have the right performance. I’m pleased with the strong performance across our business and markets.

The next question is from the line of Shlomo Rosenbaum with Stifel. Please proceed with your question.

Hi, thank you. I wanted to ask Scott to dig a little deeper just on the volume question. I understand the implications of institutional growth slowing, but if you look, you grew 1% on negative 1% last quarter. If you had 0% or flat volume in Q3, would that make it tougher to generate growth for the second half? Asking about the forecast for volume growth going forward? Additionally, we saw a significant spike in interest expense about $7 million, but debt level was relatively the same. Could you clarify that for our models?

Yes, I’ll start with your last question first. If we look at interest expense overall year-over-year, we had cash that we used to pay down debt earlier in the year in the first quarter. Cash has come down from over $900 million at the end of 2023 to about $380 million at the end of Q2. That's the primary driver of the increase in interest expense. Expect interest expense in the second half to be in the range of $60 million to $70 million, which includes the benefit we receive from the Orchid proceeds of about $950 million. Regarding the earlier volume question, as Christophe pointed out, we are comparing against tougher Q2 numbers from last year for the institutional side. The 1% volume change is fundamentally owed to that comparison. In the second half, we will realistically expect the volume growth to be in the range of about 1% to 2%.

To build on that, my commitment is to achieve 5% to 7% as quickly as we can. We're aiming for 4% to 5% this year, and not every quarter is created equal largely due to year-on-year comparison. So, 4% to 5% moving towards 5% to 7% seems quite feasible, especially with the momentum we're experiencing. The industrial aspect is improving, and our institutional side remains strong. The investments being made, driven from margin improvements, will assist in enhancing our trajectory.

Our next question comes from the line of Steve Byrne with Bank of America. Please proceed with your question.

Yes. I’d like to hear your view on two potentially meaningful longer-term opportunities in water. The first being this initiative you talked about last year targeting 150 companies that consume 20% of global freshwater, is that initiative still meaningful for you? The other long-term opportunity involves PFAS now classified as hazardous and companies that manage or use it will need to report it in 2025. Is this something you are monitoring closely?

Thank you, Steve. On the first part, we focus on those 150 companies using a third of the world’s water. We are laser-focused on our top 35 customers as a company, which aligns well with that vision. Those larger companies are very interested in our technology to produce more while also reducing water and energy costs. This is key to the success of our water business. Regarding PFAS, we have all the technologies necessary to handle this issue effectively. Regulation will help as everyone plays by the same rules. We are currently focusing on assisting food and beverage customers with plans to address PFAS, which is turning into a business opportunity for us. It will take time, but we are optimistic about its potential impact on our top line growth.

Our next question is from the line of Kevin McCarthy with Vertical Research. Please proceed with your question.

Thank you. My question relates to the potential timing attached to your long-standing EBIT margin goal of 20%. Would you expect to achieve that margin target coincident with the $140 million of savings from One Ecolab, or perhaps sooner or later? I appreciate that the macro environment obviously influences this timing, but I'd welcome any updated thoughts on the glide path and timeframe.

Thank you, Kevin. It was in September or October last year that I said we would reach this goal within a few years, and that remains true. I feel more confident that we're going to reach it in time. There’s no direct correlation between the One Ecolab savings and this margin. The $140 million is small relative to other financial indicators. One Ecolab is primarily a growth initiative and will greatly support productivity and margin improvements. Our gross margin is already close to 44%, a high watermark for the company, which we aim to keep improving. We expect SG&A to maintain 200 basis points below pre-pandemic levels as we continue to move forward, which will positively influence overall improvement.

Our next question is from the line of Patrick Cunningham with Citi. Please proceed with your question.

Hi. Thanks for taking my question. On the Pest Elimination business, sales growth continues to be very strong, but margin expansion is muted compared to the other segments. How should we think about the cadence of growth investments into that business and when we might begin to see meaningful sales leverage? What sort of long-term margin target do you have for that business?

Good question, Patrick. I love the Pest Elimination business; it's a steady performer with high single- to low double-digit growth. Regardless of market conditions, it consistently performs well, making it the best-performing pest elimination business globally. There are minimal raw materials associated with this business, meaning DPC impacts do not influence it. We expect it to exceed 20% growth eventually. The primary growth drivers are cross-selling to existing Ecolab customers and investing in connected devices, which transform our service delivery significantly.

Our next question is from the line of Andy Wittmann with Robert W. Baird. Please proceed with your question.

Great. I also wanted to ask about the One Ecolab plan. It's sometimes hard to differentiate between your various initiatives over the years. Can you explain what is different about this one compared to previous ones?

The main difference, Andy, is that previous initiatives focused on individual businesses. The current One Ecolab initiative connects all businesses to provide a unified value proposition for our customers. We aim to ensure customers see the full value of Ecolab and understand their potential performance improvement opportunities. This approach underlies a comprehensive growth strategy that’s become much more integrated and collaborative across our various segments than in prior efforts.

Thank you. Next, we have Mike Harrison with Seaport Research. Please proceed with your question.

Hi, good afternoon. You noted the high-tech business within the Water segment is growing double digits. Is there any way to provide specifics on the growth rate? Can you also discuss the penetration rate with data centers, or any additional context around the opportunity in data centers for your Water business over the next few years?

The high-tech business, which is a few hundred million, has been growing at about 30%. We’re not ready to disclose much detail yet, but we're excited about the trajectory since it’s a highly profitable business. The high-tech companies we serve, like semiconductor manufacturers and data center operators, are looking to reduce their usage of water and energy while maximizing uptime. We’re investing in high technology to cater to their needs, which is a mutually beneficial arrangement for us and our shareholders.

Our next question is from Vincent Andrews with Morgan Stanley. Please proceed with your question.

Thank you. One more on the One Ecolab initiative. Within the different segments, do you anticipate having a greater impact on volume or price? Are there segments you believe will benefit more?

That’s an interesting question. For instance, we're consolidating our food and beverage cleaning sanitation business with our water F&B business. While frontline people won’t be generalists, this combined business is one of our best. That’s likely to drive substantial value both for our customers and us. In institutional, knowing how operations can improve dollar-wise by leveraging best practices in various locations is a huge insight. That allows us to demonstrate not only price but the value in the service we render. So, overall, I expect strong potential across all businesses, with food and beverage and institutional showing great prospects.

Thank you. Mr. Hedberg, there are no further questions at this time. I would like to turn the floor back to you for closing comments.

Thank you. That wraps up our second quarter conference call. This conference call and the associated discussion slides will be available for replay on our website. Thanks for your time and participation, hope everyone has a great rest of your day.

Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may now disconnect your lines and have a wonderful day.