Sanmina Corp Q2 FY2025 Earnings Call

Good afternoon, ladies and gentlemen, and welcome to Sanmina's Second Quarter Fiscal 2025 Earnings Conference Call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. This call is being recorded on Monday, April 28, 2025. I would now like to turn the conference over to Paige Melching, Senior Vice President of Investor Communications. Please go ahead.

Thank you, Constantine. Good afternoon, ladies and gentlemen, and welcome to Sanmina's second quarter fiscal year 2025 earnings call. A copy of our press release and slide for today's discussion are available on our website at sanmina.com in the Investor Relations section. Joining me on today's call is Jure Sola, Chairman and Chief Executive Officer. Good afternoon. And Jon Faust, Executive Vice President and Chief Financial Officer. Good afternoon. Before I turn the call over to Jure, let me remind everyone that today's call is being webcasted and recorded and will be available on our website. You can follow along with our prepared remarks in the slides provided on our website. Please turn to Slide 3 of our presentation and take note of our Safe Harbor statement. During this conference call, we may make projections or other forward-looking statements regarding future events or the future financial performance of the company. We caution you that such statements are just projections. The company's actual results could differ materially from those projected in these statements as a result of factors set forth in the Safe Harbor statement. The company is under no obligation to and expressly disclaims any such obligation to update or alter any of the forward-looking statements made in this earnings release, the earnings presentation, the conference call or the Investor Relations section of our website, whether as a result of new information, future events or otherwise, unless otherwise required by law. Included in our press release and slides issued today, we have provided you with statements of operation for the second quarter ended March 29, 2025, on a GAAP basis as well as certain non-GAAP financial information. A reconciliation between the GAAP and non-GAAP financial information is also provided in our press release and the slides posted on our website. In general, our non-GAAP information excludes restructuring costs, acquisition and integration costs, non-cash stock-based compensation expense, amortization expense and other unusual or infrequent items. Any comments we make on this call as they relate to the income statement measures will be directed at our non-GAAP financial results. Accordingly, unless otherwise stated in this conference call, when we refer to gross profit, gross margin, operating income, operating margin, taxes, net income and earnings per share, we are referring to our non-GAAP information. I'd now like to turn the call over to Jure.

Thanks, Paige. Good afternoon, ladies and gentlemen. Welcome and thank you all for being here with us today. First, I would like to take this opportunity to recognize Sanmina's leadership team and our employees for doing a great job. So to you, Sanmina's team, thank you for your dedication and for delivering excellent service to our customers. For the second quarter of fiscal year 2025, we delivered solid revenue of $1.98 billion and non-GAAP EPS of $1.41 per share. Again to Sanmina employees, thank you, and let's keep it up. Now let's go to our agenda for today's call. We have Jon, our CFO, to review details of our results for you. I will follow up with additional comments about Sanmina results and future goals. Then Jon and I will open for questions and answers. And now I'd like to turn this call over to Jon. Jon?

Great. Thank you, Jure, and good afternoon, ladies and gentlemen, and thank you for joining us here today. Before I review our results for the second quarter, I want to acknowledge the entire Sanmina team for their hard work, dedication, and support. The team has been agile in supporting our customer needs in a very dynamic environment and has executed well while doing so. Jure and I, along with the rest of the Sanmina management team, appreciate the effort and thank you for delivering a solid second quarter and a great first half of fiscal 2025. Now please turn to Slide 5, where I'll speak to the financial highlights. We're very pleased with our second quarter results, which as you can see, either met or exceeded all of our outlook commitments. Our revenue of $1.98 billion and our non-GAAP operating margin of 5.6% each came in towards the high end of our outlook. Also, our non-GAAP gross margin of 9.1% and our non-GAAP diluted earnings per share of $1.41 each exceeded our outlook. These results, combined with what we delivered in the first quarter, put us on a solid trajectory for the fiscal year and set us on the right path towards achieving our long-term financial goals of driving growth and expanding margins. Now please turn to Slide 6, where I'll speak to the P&L performance for the second quarter. As I just mentioned, we delivered revenue of $1.98 billion, which was up 8.1% compared to the same period a year ago. This was primarily driven by growth across the majority of our end markets, which Jure will speak to in more detail as a part of his prepared remarks. Non-GAAP gross profit was $181.3 million or 9.1% of revenue, up 20 basis points compared to the same period a year ago. This was driven by favorable mix, as well as operational efficiencies. Non-GAAP operating expenses were $70.7 million, above our outlook as we continue to make targeted investments to drive future growth. Non-GAAP operating income was $110.6 million or 5.6% of revenue, up 20 basis points compared to the same period a year ago, driven by growth, mix, and focused execution. It's important to note that our non-GAAP operating margin continues to be in line with the 5% to 6% short-term target range that we have previously communicated. Non-GAAP other income and expense was $3.2 million net expense favorable to our guidance driven by our strong cash flow results. Non-GAAP diluted earnings per share came in at $1.41 based on approximately 56 million shares outstanding, which was up 7.8% compared to the same period a year ago. Now please turn to Slide 7, where I'll speak to the P&L performance for the first half of fiscal 2025. Revenue for the first half was up 7.6% compared to the same period a year ago. This growth was driven by strong performance across the majority of our end markets, but with particular improvement coming from the Communication Networks and Cloud Infrastructure end markets. Non-GAAP earnings per share for the first half was $2.84, up 8.8% compared to the same period a year ago. As we mentioned on our prior call, we expect fiscal 2025 to be a growth year, and our results for the first half represent a solid start towards achieving that objective. Now please turn to Slide 8, where I'll speak to the segment results. IMS revenue came in at $1.60 billion, up 9.8% compared to the same period a year ago, driven by growth in the majority of our end markets, primarily in the Communication Networks and Cloud Infrastructure end markets. IMS non-GAAP gross margin was 7.7%, which is flat when compared to the same period a year ago. CPS revenue came in at $411 million, up 3.3% compared to the same period a year ago, driven by higher demand in most of our end-markets. CPS non-GAAP gross margin was 13.9%, up 100 basis points compared to the same period a year ago, driven by favorable mix and operational efficiencies. We're pleased with the performance of the IMS and CPS businesses this quarter, but there is still room to improve in terms of both revenue growth and margin expansion, which we will continue to focus on going forward. Now please turn to Slide 9, where I'll speak to the balance sheet highlights. We maintained a very strong balance sheet in the second quarter. Cash and cash equivalents were $647 million. At the end of the quarter, we had no outstanding borrowings on our $800 million revolver, leaving us with substantial liquidity of approximately $1.5 billion. We ended the quarter with inventory, net of customer advances of $1.2 billion, which was down 8% in absolute dollar terms compared to the same period a year ago. Inventory turns, net of customer advances improved to 5.9 times for the quarter as compared to 5.0 times in the same period a year ago. While we were pleased with these results, there is still room to improve. Our non-GAAP pre-tax ROIC was 23% for the quarter, well above our weighted average cost of capital and an improvement from the 22% from the same period a year ago. We continue to have one of the strongest balance sheets in the industry with no net debt and a low gross leverage ratio of 0.48 times, which puts us in a great position to execute on our strategy while navigating the uncertainty of the current macroeconomic environment. Now please turn to Slide 10, where I'll speak to the cash flow highlights. As a result of the team's disciplined working capital management, our second quarter cash flow from operations came in at a solid $157 million, which equates to $221 million for the first half. Capital expenditures were $31 million for the quarter, in line with our outlook and were $48 million for the first half. As I've mentioned before, we will continue to make strategic investments in the technology and capabilities needed to strengthen our position in the market and to support our long-term financial objectives. To that end, in the second half, we expect to make targeted investments in both capacity and technology across the U.S., India, and Mexico geographies. As such, on a full-year basis, we now expect capital expenditures to be approximately 2% of revenue. Free cash flow was $126 million for the quarter and $173 million for the first half. During the quarter, we repurchased approximately 1.03 million shares for approximately $84 million. As of March 29, 2025, we had $253 million remaining on our share repurchase program. Our strong cash flow performance gives us the flexibility to continue to invest in the business and return capital to our shareholders, all through a disciplined and balanced capital allocation approach. Now please turn to Slide 11, where I'll cover our outlook for the third quarter. Our outlook is based on the forecast from our customers and takes into account market uncertainty due to tariffs and the current geopolitical landscape. Our third quarter outlook is as follows. We expect revenue between $1.925 billion to $2.025 billion, which at the midpoint of $1.975 billion puts us up 7.3% compared to the same period a year ago and up 7.5% on a year-to-date basis. Non-GAAP gross margin of 8.6% to 9.0%, dependent on mix. Operating expenses of $62 million to $66 million. Non-GAAP operating margin of 5.4% to 5.8%. We expect other income and expense to be a net expense of approximately $6 million. A tax rate of 20% to 22%, consistent with last quarter. We estimate an approximate $4.5 million non-cash reduction to our net income to reflect our India JV partners' equity interest. Non-GAAP EPS in the range of $1.35 to $1.45 based on approximately 55 million fully diluted shares outstanding. At the midpoint of $1.40, that would put us up 12% compared to the same period a year ago and 10.4% on a year-to-date basis. Capital expenditures to be around $50 million, and finally, depreciation of approximately $30 million. In summary, while considerable uncertainty around tariffs remains, at this time, we believe we are well-positioned to navigate the current market environment and we expect revenue to grow between 6.0% and 8.0% on a full-year basis.

Thank you, Jon. Ladies and gentlemen, let me add a few more comments about our results for the second quarter and the rest of the fiscal year 2025. Now please turn to Slide 13. As you heard from Jon, our team delivered solid execution and excellent service to our customer despite being in a very dynamic environment. Revenue, gross margin, operating margin, and non-GAAP EPS were either met or exceeded our outlook. I can also tell you that our customers' inventories continue to come down, as we're starting to see more opportunities in the pipeline. Even in this geopolitical environment, our customers are still positive about future opportunities and their growth. To talk more about it, please turn to Slide 14. Let's look at the revenue by end markets for the second quarter. Industrial, Energy, Medical, Defense, Aerospace and Automotive came in at $1.251 million. That grew approximately 2.1% year-over-year. Percentage of the revenue in this segment was 63% overall. For Communication Networks and Cloud Infrastructure, we delivered $733 million for the quarter that was very strong, up 20.3% year-over-year, which consists of 37% of our revenue. For the second quarter, total revenue of $1.984 billion, we delivered another solid quarter, up 8.1% year-over-year. Top 10 customers for the quarter represented 51% of our revenue. Bookings book-to-bill came around 1:1, as we continue to see solid, stable demand. As you can see, we are a well-diversified company. We continue to see positive trends for fiscal year 2025 and beyond. As I mentioned, Industrial, Medical, Defense, Aerospace, and Automotive is 63% of our revenue. So let me talk about more details in each of these segments. Industrial and Energy is approximately 23% of our revenue. We have a solid customer base and great opportunities around energy, power controls and management systems, and strong demand from safety equipment. We see exciting new projects in our pipeline. Medical is approximately 20% of our revenue right now. We see stable demand driven by medical devices around digital health. We do have a strong customer base that is well-diversified within the market and we're starting to see positive trends for the future. For Defense and Aerospace, Automotive and Transportation, that segment for us is around 20% of our revenue. We continue to see solid demand from critical defense projects, including Sanmina Defense products. We are growing and expanding our advanced printed circuit board fabrication business for this segment. We are also expanding precision mechanical systems for the Defense and Aerospace business, and we are well-positioned in this market. For Automotive, the short-term market is challenging. However, I can tell you that this segment around our customer base grew double-digits year-over-year for the second quarter. We expect to see stable growth short-term and solid market opportunities long-term. Communication Networks and Cloud Infrastructure is approximately 37% of our revenue. We see positive trends for high density, high-performance networks. So we continue to see solid demand for high-performance routers and switches, optical network systems, optical advanced packaging, and enterprise storage driven both by cloud and service providers. Cloud providers require large-scale networks and Sanmina is well-positioned for this segment. AI requirements continue to evolve at a rapid pace and is driving technology advancement. We are expanding our capabilities to meet present and future demand. Our goal is to provide industry-leading capabilities from design to full system end-to-end solutions for the data center and cloud infrastructure. What we do today is produce high-technology printed circuit boards for this segment. We assemble these boards, subsystems, and full systems. We provide mechanical racks and enclosures, and we are expanding our liquid cooling rack systems. We continue to manufacture cooling manifolds for racks. We continue to manufacture bus bars for racks. We also have ODM products around our service and storage systems. We deliver custom memory and custom optical modules. And I can tell you we are expanding organically to meet full system integration and test. Also, I can tell you that we will continue to invest in this key market to drive future growth. Please turn to Slide 15. Let me add a few more comments about the fiscal year 2025 outlook. While we continue to manage through a very dynamic environment, we remain focused on operational execution, customer satisfaction, cost management, and consistently delivering value to our customers. With that said, I'm very pleased with our performance for the first six months of fiscal year 2025, as revenue was up 7.6% compared to the same period a year ago. We are growing non-GAAP EPS and generating strong cash flow, as you heard from Jon. Based on our results for the first six months and our outlook for the third quarter at the midpoint, this puts us on a track to deliver nice growth in fiscal year 2025. We expect to see growth to come from new and existing programs and we are adding new customers with higher margin opportunities. Short-term, operating margins will be stable in the range of 5% to 6%, and in the long term for our business model, we expect to deliver operating margins of 6% plus. Again, for fiscal year 2025, we remain focused on our strategy and investing in faster-growing and higher-margin end markets. Please turn to Slide 16. Now let me talk to you about our favorite topic: tariffs. With tariffs, uncertainty remains. As you know, the tariff situation is not unique to Sanmina. However, as the geopolitical situation continues to evolve, our ability to be agile and responsive will be key to our customers' success. We have a well-established materials, supply chain, and trade compliance team with seasoned professionals dedicated to navigate these complex trade requirements. We are taking a proactive approach and actively working with our customers to support their evolving needs. Our single IT system is agile and responsive to our customer requirements. As a reminder, while tariffs may have an impact on our customers' demand, any changes in tariff costs are passed through to our customers. To meet customer needs in this environment, our global regional footprint is strategically aligned to provide global solutions. We have industry-leading established capacity in the United States. Please turn to Slide 17 to talk more about our global structure. As you can see on this map, Sanmina has a global regional manufacturing footprint. I believe it is industry-leading, lean, and flexible. As our customers evaluate where they want their products manufactured, Sanmina has capacity in the United States and in other geographies to provide local solutions. As you can see, we're well-diversified by the regions, again, very strong here in North America, specifically in the United States. Our global and regional manufacturing footprint, agile and responsive IT systems, and our strong balance sheet are key competitive advantages for us in supporting our customers in times like these. Please turn to Slide 18. In summary, ladies and gentlemen, our manufacturing footprint is well-aligned with our customer requirements. We are focused on the key markets to drive profitable growth. We continue to generate cash to fund the business using a disciplined ROI approach. We remain focused on fundamentals and future financial performance. Sanmina continues to be a partner of choice with our top customers and market leaders. We'll continue to execute on our strategy as evident in the progress we have made in our financial results. Again, in this dynamic environment, we are on the track to grow revenue, expand margins, grow EPS, and generate strong cash flow in fiscal year 2025. Ladies and gentlemen, now I would like to say thank you to all for your time and your support. Operator, we are now ready to open the lines for questions and answers. Thank you.

Ladies and gentlemen, we will now begin the question-and-answer session. Your first question comes from the line of Ruplu Bhattacharya from Bank of America. Your line is now open.

Hi, Ruplu.

Thank you, Jure. I appreciate you taking my questions. To start with tariffs, did you notice any advance in demand during fiscal 2Q in anticipation of the potential tariff hikes? Also, have any of your customers requested that you relocate manufacturing to different regions?

First of all, personally, I don't have the data to say there was anything major moved around during the quarter because our customers are confused just as much as I am and I'm sure you are too about what's going on. But yeah, we had a lot of discussions with our customers about what the options are if these tariffs basically come real. But the good thing is, we now have some time here to figure out, as I mentioned, from Sanmina's point of view, we have a great global footprint to service our customers locally and then offer global support to minimize the impact on them. As I said, these tariffs can be very high, and this can impact our customers, not just short-term, but long-term. So we're very sensitive to this. We are working with our customers and we have various scenarios if something changes. But I can tell you, overall, nothing major has really changed in the last 90 days.

As a follow-up, when I review your comments on fiscal '25 revenue growth, Jon mentioned a 7% year-on-year growth at the midpoint. You indicated a range of 6% to 8%. Using that information, it suggests about a 6% year-on-year growth for fiscal 4Q based on your midpoint guidance for fiscal 3Q. Are you observing any slowdown in demand in the second half of '25, or have there been any shifts in customer buying behavior, or is your guidance just a matter of caution?

I think we're more prudent right now in the guidance given all these dynamics that are happening in today's environment. Our demand and the programs that are coming up are very exciting. So longer-term, unless something really falls off the cliff in geopolitical issues, I think we are well-positioned to continue to see growth. We also had one program, Ruplu, that was a major program that got pushed out for redesign. It's going to come back on board at the end of September or early October. But that happens all the time. So we still have to be very optimistic about our fourth quarter, but in this environment, it's one quarter at a time. However, for the year, we expect to have a good year. Looking at '26 and '27, there are a lot of exciting opportunities. That's one of the reasons we are continuing to invest more now for the future and expanding in certain regions, especially India for data centers. We are also putting more capacity for data centers here in North America. So both on a full system and at the component level from printed circuit boards to mechanical racks and etc.

Okay. That's helpful. If I can ask a question on inventory, it looks like gross inventory dollars were up 9% sequentially. What drove that and how should we think about working capital trend, cash flow, and uses of cash for the rest of the year?

I'll turn you over to my CFO. I think he is better with numbers than I am, so.

Yeah. Thanks for the question, Ruplu. So we really look at it on a net basis, so the gross inventory net of customer advances. And if you look at that on a year-over-year basis, we improved quite a bit. Now that was to compare last year where we were working through inventory absorption. Now if you think ahead to Q3 on a sequential basis, a little bit of movement there, but it really is starting to build our inventory stockpiles to support future growth. So we see that as positive. But what we're really focused on this quarter was just that year-over-year improvement and continuing to see that progress. Now going forward, as I mentioned in my prepared remarks, we said that there is still room to improve in inventory. I quoted net inventory turns of 5.9 times. We've said in the past around 6 times or so is a good place to be. So we're pretty pleased with the 5.9 times, but we still think there's some progress. But to Jure's point about new programs coming on board, as we see that, we'll put the necessary inventory in place to support that growth.

Okay. That's helpful. If I can squeeze one more in. In the communications end market, Jure, I think you talked a little bit about demand. Can you help us rank order like which was strong, which was weak in terms of optical versus routing switching versus wireless? How are you seeing demand trending because networking was going through an inventory correction? Are you seeing anything positive? And how are you seeing these three things – optical, routing, and wireless coming back?

First of all, on inventory, as I mentioned in my prepared statement, inventory is definitely coming down. We are almost close to normal. We have a few customers that still have some inventory in the pipeline, but I can see the light at the end of the tunnel, talking to them that's disappearing. For communication, as you know, it was very strong for this quarter year-over-year, up 20%. I would say that the high-end routing, routers, and switches were pretty strong. Also, optical networks were strong, coming back in optical packaging, and across the board, it was a very good quarter. As I look at the future, I see that continuing to be strong at least for the next couple of quarters, and then we'll see one quarter at a time. But definitely, we see upside driven by both the service sector and also the data centers.

Okay. Thank you for all the details. Appreciate it.

Thanks, Ruplu, for your support.

Your next question comes from the line of Steven Fox from Fox Advisors. Please go ahead.

Hello, Steve.

Hi. Good afternoon, guys. I guess, first of all, I was wondering if you can go back to the prepared remarks where you mentioned that some second half investments in capacity and technology in India, the U.S., and Mexico. Can you just sort of expand on that? What that comment is related to and what you're doing more specifically? And then I had a follow up.

Well, let me add a few more points to that, and then Jon, you can comment on where we are really focused. If you look at India, we think there's a lot of opportunity for growth. Our joint venture in India is doing well. I would say it's working perfectly to what we imagined when we put this thing together. Sanmina is fully responsible for running this. Reliance is basically an investor partner for us. We see a lot of growth in India in the next couple of years for 'Made in India' and also for export out of India. There is a lot of interest. Actually, if you look at the survey from our customers, we see more interest there than any other plant around the world is India. We have a 100-acre campus and approximately 700,000 to 800,000 square feet of manufacturing space and we are expanding that mainly around data center demand that we feel we're going to see in the next 12 to 18 months. In fact, the facility should be ready sometime in October or November timeframe and then we'll go from there. We're doing the same thing, especially in Mexico and also in North America. Besides the EMS expansion, we're also adding more capacity, especially in high-technology printed circuit boards. We're adding more capacity in North America and we're also adding a fair amount of mechanical capacity. Jon, anything?

Yeah. I think you covered it well, Jure. I mean just to add, Steve, to Jure's comments, it's both capacity and capabilities. I mean, we're building up our capabilities in that space too to take on more complex programs. And really, at the end of the day, we had a pretty broad range on CapEx to-date this year of 1% to 2%. So we thought with these investments coming up in the second half, it would be prudent to narrow that down and give a little bit clearer guidance, which is why I said about 2% to revenue.

That information is very helpful. I am curious about your comments from the past few quarters regarding your focus on increasing rack integration. You clearly possess many of the necessary components. Can you provide an update on your progress in this area and how you plan to engage more effectively with cloud companies in what appears to be an increasingly competitive market? Thank you.

Yeah, Steve. First of all, we do have an ODM product around the service storage systems, and we have our own design group that has been around for a long time. So we have our core capabilities; we're able to really drive our mechanical business up around the racks and cooling racks, manifolds, and things like that. That business is doing really well, and I wish I had more capacity there right now, to be honest with you. As we are getting more into our typical EMS business, we do full system today, from basically new product to full system and distribution. One area that we've been looking at in the last year or so is expansion into the data center for computing and so on. Since we're already doing a lot of networking business, optical business, I think the next step for us is to do more integration in this computing area for data centers and we're setting that up. We're already doing some, but we're really expanding to drive organically to full system integration and test. And that seems promising for us. We'll see where it goes.

Great. That's all very helpful. Thank you.

Thanks, Steve.

Your next question comes from the line of Anja Soderstrom from Sidoti. Please go ahead.

Hi, and thank you for taking my questions.

Hello, Anja. How are you?

Nice progress in the quarter. I'm good. So you mentioned some new customer wins. In what area are those mainly and how is the competitive environment for you to win those?

Could you repeat that? Do you mean the question, Anja? I'm sorry, I lost you there for a second.

So you mentioned that you added some new customer wins in the quarter.

Yes. It's across the board. I think, as I said, I think our energy business continued to do well. I believe our Communication Networks and Cloud Infrastructure continues to do well. And in Defense, we have some new programs, including some medical programs that are coming up. We're doing some expansion in Europe for medical products and we expect it to grow for us. So in general terms, our pipeline is very solid and across the board.

Okay. Thank you. And how is the competitive process for you to win those?

We aim to compete by providing advanced technology, high product quality, flexibility, and quick market response. We believe Sanmina is highly competitive when considering the overall technology offered, along with total cost and supply security. Our reputation is built on being customer-focused and developing partnerships by delivering the right solutions, technology, and performance that our customers can rely on anytime, anywhere globally.

Thank you. Regarding the tariffs, if they remain in place and your customers want to relocate their production, what is your capacity utilization globally?

Well, first of all, we've been expanding capacity. We can take on today depending on our mix and which plant we use, but I can shift an additional 30% just by adding people and a few pieces of equipment here and there. Additionally, we are increasing capacity for some of the new capability and new technology. Jon, anything else?

Yeah. I think just to add to that, Anja, like I was saying in my prepared remarks, the key in this type of market environment is to be agile. We believe we've got a competitive advantage because of our breadth of capabilities across various different end markets, the geographic distribution, all of our capacity that Jure covered in his slides and just the proactive customer outreach. That's what we've been looking to do over the last several months as tariffs and all those conversations have been taking place; making sure that we're staying connected with our customers and offering them flexibility and options depending on whatever they'd like to do.

Yeah.

Okay. Thank you. That was helpful.

Sorry, Anja, and I said that as we do these things, we have a longer-term plan on how we monetize these investments and so on. That's one of the reasons we are excited about our long-term growth for Sanmina. We are investing in some of these technology components, and I believe AI will enable us to deliver our goal of operating margins better than 6% and accomplish our goals in the next two to three years as we talked about how do we get this business from $8 billion, $9 billion to $12 billion run rate plus. So that's the plan and that's why we are 100% focused on it. But as Jon said, it's the flexibility that we offer by providing the right technology and giving, especially in this environment, our customers global visibility is one of the key competitive advantages we have.

Okay. Great. Thank you. That was helpful. That was all from me.

All right. Thanks, Anja.

Thanks, Anja.

There are no further questions at this time. I would like to turn the call over to Mr. Jure Sola for closing comments. Sir, please go ahead.

Thank you, operator. First of all, I want to thank you all for participating in this call. If we didn't answer all your questions or if you have additional questions, please contact us. I'm looking forward to talking to you. Most importantly, we'll talk again 90 days from now. Bye-bye.

Thank you.

This concludes today's conference call. Thank you very much for your participation. You may now disconnect.