trivago N.V. Q2 FY2023 Earnings Call

Good day, ladies and gentlemen. Thank you for standing by and welcome to the trivago Q2 Earnings Call 2023. I must advise you the call is being recorded today, Wednesday, the 2nd of August, 2023. We are pleased to be joined on the call today by Johannes Thomas, trivago’s CEO and Managing Director; and Matthias Tillmann, trivago’s CFO and Managing Director. The following discussion including responses to your questions reflects management’s views as of today Wednesday, the 2nd of August, 2023, only. trivago does not undertake any obligation to update or revise this information. As always, some of the statements made on today’s call are forward-looking, typically preceded by words such as we expect, we believe, we anticipate, or similar statements. Please refer to the Q2 2023 operating and financial review and the company’s other filings with the SEC for information about factors, which could cause trivago’s actual results to differ materially from these forward-looking statements. You will find reconciliations of non-GAAP measures to the most comparable GAAP measures discussed today in trivago’s operating and financial review, which is posted on the company’s IR website at ir.trivago.com. You are encouraged to periodically visit trivago’s Investor Relations site for important content. Finally, unless otherwise stated, all comparisons on this call will be against results for the comparable period of 2022. With that, let me turn the call over to Johannes.

Good morning, everyone. And thank you for joining our Q2 2023 earnings call. As this is my first call since returning to the company, I wanted to take this opportunity to share some of my initial observations and thoughts on our strategic direction. Firstly, I'm thrilled to be back at trivago and equally excited to be joined by our new Chief Marketing Officer Jasmine, and our new Chief Product Officer Andre. I'm also excited to team up with Matthias again. We have been part of the leadership team that scaled trivago across the globe. With our deep understanding of the company and the relevant know-how in marketing, product, and technology, we feel confident to guide the company's future. Our first months have confirmed our belief in the potential of the business and the capabilities of our team. We have a massive brand in a massive industry. Travel is one of our biggest sectors, and it has proven its robustness. The hotel segment is very attractive and highly fragmented. As a meta search, we bring clarity to complexity. We have great content reducing rates for more than five million properties from hundreds of travel sites. Most importantly, we deliver a strong value proposition on price, which is the factor that travelers care about when considering a website to search or book a hotel. Our strategic focus remains on hotels and accommodations. This focus on one vertical allows us to market trivago’s tremendous growth in the past and carries considerable advantages for the future; it allows us to position our brand uniquely as we mentor the go-to place for searching hotels. The claim 'hotel trivago' speaks for itself and is well known across the globe. In many large markets, we are still among the most recognized travel brands and every year millions of travelers start their search on trivago. With a product that focuses on hotels, we can deliver a search experience that surpasses all others in simplicity and seamlessness. We understand the obstacles our business has faced in the wake of the pandemic. Keeping trivago at the forefront of travelers' minds through brand marketing has been a steeper challenge in the past few years. Simultaneously, trivago has consciously cut back on marketing spending in a push for higher profitability. We have rejoined trivago with a firm belief that we can return the business to a growth path. As the new management team, our core responsibility lies in striking an optimal balance between growth and profitability, aiming to maximize long-term shareholder value. To realize this, we will continue investing in our brand presence. Television remains an essential part of our marketing efforts, due to its vast reach and effectiveness. We have already adjusted our media buying tactics during our initial months and continue to optimize our media channel and market mix. We've also become more experimental in our television advertisements, to understand how we can improve direct response and activate more travelers when they see our ads. Beyond brand, we see plenty of opportunities to enhance our core product with a goal to further improve user experience and retention. We want to provide everything travelers need to confidently search, compare, and choose the ideal hotel. We believe in price when it comes to loyalty. We will cement our position as a shortcut to find the best rates and will reinforce our capabilities as a deal-finding platform. Yet the foundation of our ambitions is our people and the culture we foster. Our success has always leaned on the commitment and creativity of our team members who have boldly turned their ideas into reality. We will revitalize our culture of micro-innovation, continuous improvement, and disciplined execution. It will make us take better decisions, learn faster, and create more value for our users and advertising partners. We are excited about what's ahead. We're committed to leveraging our experience, our brand strength, and our value proposition to move trivago forward. With this, I'm handing over to Matthias.

Thanks, Johannes, and welcome to your first earnings call with us. Good morning and good afternoon to everyone on the call as well. The second quarter proved to be challenging for us with a referral revenue decline of 13% year-over-year. While last year's Q2 results were positively impacted by pent-up travel demand driven by travel lockdowns and restrictions in the first quarter of 2022, in particular in Europe and Asia, we observed the normalization and seasonality this quarter. Last year, we also experienced higher monetization levels in our auction as our advertising partners geared for growth during the reopening. In the first half of this year, the seasonal pattern and bidding dynamics in our auction normalized, which led to lower levels of monetization year-over-year. In addition, we observed that Google rolled out a sponsored ad format in the search engine result pages in mid-May. We believe that this initially captured a significant impression share from traditional ad works. The combination of normalization, seasonality, lower levels of monetization, and Google ad changes had a negative impact on our performance marketing volumes. As a result, the year-over-year referral revenue decline in the second quarter was higher than we anticipated at the beginning of May. We continue to execute on our plan to ramp up brand marketing investments as we see positive results from our brand campaigns. We believe it will help us to rebuild our brand baseline traffic long-term, even though the investments lead to lower levels of return on advertising spend in the short term. Our consolidated ROAS declined to 144.6% in the second quarter down from 165.9% in the same period last year. Our net income was €5.8 million compared to a net loss of €59.8 million last year. The increase was mainly driven by an impairment of intangible assets and goodwill of €84.2 million recorded in 2022. The increase in brand marketing expenses and lower levels of monetization led to a decrease in our adjusted EBITDA to €12.2 million in the second quarter of 2023, compared to €30.3 million in the same period in 2022. Let me give you some color on the dynamics in the second quarter for the different regions. Starting with our segment Americas, our referral revenue declined by 23% year-over-year. The decline was largely driven by a loss in performance marketing volumes as we did not observe the same uptick in monetization in our own auction as last year and Google Ad changes that I mentioned before, which led to a reduction in impressions and ultimately traffic. Average booking values were roughly stable year-over-year as the tailwind from higher ADRs was offset by a decrease in length of stay and negative foreign exchange effects. The year-over-year referral revenue decline was less pronounced than in Americas, as the headwind from lower levels of monetization was partly offset by an increase in booking conversion. ADRs increased year-over-year by mid to high single digits; however, the increase was offset by a similar decline in length of stay. As a result, our average booking value was roughly flat compared to the same period in 2022. Referral revenue in our segment Rest of World increased by 21% year-over-year, as the recovery in many Asian markets continued, most notably in Japan and Hong Kong. While overall length of stay was also short in Rest of World compared to the same period in 2022, this was more than offset by an increase in ADRs of over 20%. In addition, we saw an increase in booking conversion as many Asian countries continue to recover post-COVID. Foreign exchange rates had a negative impact of around 10% in that segment for us. Moving on to our operational expenses, excluding advertising expenses and the impairment of intangible assets and goodwill from last year, we saw an 11% decline in our operational expenses in the second quarter compared to the same period in 2022. Compensation expenses, including share-based compensation, decreased mainly as a result of headcount reductions compared to the second quarter in 2022. Further, we recorded lower commission fees for acquiring traffic as our white label product is fading out. We remain well-capitalized with approximately €298 million in cash, cash equivalents, restricted cash, and short-term investments, and we continue to be debt-free. Let me close with an outlook on the third quarter. As expected, we saw a significant increase in referral revenue month-over-month in July in line with general travel seasonality as we enter the peak summer period. The year-over-year referral revenue decline in July improved significantly compared to June, as we were able to regain performance marketing traffic volumes. The main travel trends remain stable, and we continue to see elevated average booking values in all regions. In Americas and Europe, average booking values are roughly flat compared to last year, as the further increase in ADRs is largely offset by shorter length of stay. In our segment Rest of World, average booking values are still higher compared to a year ago, as the increase in ADRs is still strong and only partly offset by a shorter length of stay. Overall travel demand continues to be robust, and our auction dynamics improved slightly in July. However, still at monetization levels that are lower compared to last year. Despite those monetization headwinds, we plan to invest in brand marketing at similar levels to last year in the third quarter, and therefore expect a decrease in ROAS and contribution compared to the same period last year. For the full year 2023, we continue to expect to exceed our 2019 adjusted EBITDA of €70 million. With that, let's open the line for questions.

Our first question comes from Naved Khan from B. Riley. Naved, your line is now open, please proceed.

Thanks and congrats, Johannes, on your return. Got a couple of questions. So maybe one on the Google Ad changes that you saw. What is the extent of that? Is that mostly in the U.S.? Are you seeing that across all geos? And then secondly, you spoke about maybe increased focus on brand advertising. I'm just trying to figure out what's the lag that you expect there in terms of that translating into better performance in the core business?

Yes, thank you Naved. On your first question, it was really across all geos, not U.S. specific, but it includes the U.S. So we obviously it's always a bit different market by market and there are different dynamics. It's not only the rollout of the app, but also how competitors react, how people participate in that format, and how the normal dynamic is in that work. So there can be slight differences market by market, but it is not that we observed that this was rolled out in one geo or one market and not another; it was really global. And that's what we tried to balance over the last couple of years, in particular, in 2020, and '21. And then last year, we started to ramp up. As you surely recall, the first quarter was difficult, particularly in Europe and in Rest of World. And that's why we, in hindsight, were probably a bit too cautious going into the summer period. Therefore, we wanted to change this year, and that's why we started earlier to invest in brand. And that's what you can probably see in the numbers as well, with a robust decline, as we have started to advertise earlier than last year into brand. Having said that, obviously, everything we do in brand has a long-term impact. We do not aim to have a positive return on investment in the short term, so it comes as a negative contribution. From the learnings we had pre-COVID and also when we ramped up last year, we know that it takes a bit longer to see the positive effect on the brand baseline, and then on revenue and contribution. But we are convinced that we will see those effects in the future. And that's why we keep investing.

Okay, a quick follow up, if I may. So in your prepared remarks, you talk about an improvement in booking conversion. I’m curious what drove that?

Yes, so I mentioned that we saw an improvement in booking conversion in Europe and Rest of World. Starting with Rest of World, I think that is primarily driven by the recovery. In Europe, it can be a mix effect. For example, a channel mix effect, which makes sense if you combine that with the other commentary we made because we lost performance traffic volume and brand conversion tends to be higher. So there's nothing to call out in terms of significant changes we did on the product side. As Johannes mentioned in his remarks, the philosophy is more to invest in the product and try to improve it incrementally. We aim to build different smaller features and continuous improvement, but it's not that we aim for this one big change that gives you a step change in the conversion, which is difficult to achieve to start with. So I think it's more from a mix, channel mix, and maybe country mix side as well, rather than any bigger changes on the process.

Got it. Thank you, Matthias.

Thanks, Naved.

Thank you. Our next question comes from James Lee from Mizuho. James, your line is now open, please go ahead with your question.

It's not that we are looking for one major change that will significantly improve the conversion, which is challenging to accomplish initially. Instead, I believe the focus is more on the mix of channels and possibly the mix of countries, rather than any substantial changes in the process.

Yes, if I look at this space, I think most important when I look at it is, are we solving a problem? Is there an added value that we're creating? I think that's what I outlined. We see that there's still a very strong price disparity. There are a lot of different advertisers with different prices. So there is a reason to exist as a meta-search. We simplify the world for users and that’s why these are coming to us. This has not changed in our research, in the feedback we're collecting from users. There's certainly a segment that goes for convenience, regular travelers who have a good reason not to use the meta-search. But overall, I think the proposition is as strong as it always was. Then it’s a question of how you get this across to the users. As we are spending much less on marketing now, we need to be smart and more efficient to do that. I think that's a differentiation to Google; Google cannot capture the mental space that they are about to tell their search engine, which is much broader. Yes, people start there. But I think with our brand marketing approach, and has always been trivago as a starting point, and you check in with trivago, in your research and planning phase, this fundamentally doesn’t change. I think it’s then up to us, do we build a better product? Do I believe we have a better product? Yes. We need to continue to innovate and improve our core product, and that's why I believe last year and coming to your strategic question, last year this shift has gone back to the core product, and that is what I would sign 100%. I think the market is huge. The brand is very strong, capturing space in that market at our size should be very reasonable. And that is what excites us to be here. Fundamental to rebuilding our brand is being efficient in marketing and converting them into our product. Yes, you had a second question.

Yes, go ahead, please.

You had a second question or?

No, no, the second question is for Matthias. You know, Johannes, if you maybe go ahead and finish your commentary about strategy, that'll be great.

No, I think that was my point on strategy and how I look at this space, big market, big brands, and the product that solves the problem.

Awesome, awesome. And for Matthias, a couple of housekeeping questions here. I think on the press release, you said length of stay is a little bit shorter, continue to be shorter. I was wondering, can you give us more color? Last quarter, you said it was down low single digits. And also you say you continue seeing trade-downs. Can you give us a little bit more color? Is that across the board using all regions or in specific regions, you guys seeing a little bit more trade-down activities? Thanks.

Yes, sure. Thanks, James. So first of all, we see a reduction in length of stay across all regions. Last quarter, we said it low single digits; it's a bit higher than that now. I think that makes sense given that we're approaching the summer season with an average length of stay that is longer. It makes sense that the decrease is increasing as well. It's very similar to what we saw last year in the third quarter already in Europe. To give you an idea, when it was low single digits in the first quarter, then it's now high single digits kind of. It's very similar in the different regions, a little lower in Rest of World. But there, you need to be careful given that there are lots of mix effects in that segment, which consists of 30 markets. There's also some noise in the year-over-year comparisons as last year, we didn't see all markets fully recovering. Now it's a bit different, which leads to a country mix shift this year as well. Overall, the same story and similar trends. What is different in the Rest of World, and I call that out, is that the ADRs in the year-over-year comparison are increasing stronger. What you should also reflect is that in the numbers we report in euros, there are negative currency effects in there, and it's a bit bigger in Rest of World. I think I mentioned the number was a headwind of around 10% for us. In Americas, there was also a currency effect of around 5%, and Europe, not so much. It's only the pound sterling, but there wasn't as big. In terms of trading down, it's really length of stay that’s been thought and where we see an impact that is quantifiable. It's not that we see a significant shift in search behavior or travel behavior that I would call out.

Great, thank you so much.

Thank you. Our next question comes from Ron Josey from Citi. Ron, your line is now open. Please go ahead.

The impact of the currency effect is approximately 5%, mainly affecting the pound sterling in Europe, though not significantly. The primary influence we are observing is in the length of stay, which has been notable. However, we haven't detected any major changes in search or travel behavior that stand out. Thank you. Our next question comes from Ron Josey from Citi. Ron, your line is now open. Please go ahead.

Yes, thank you, Ron. Let me try to clarify the cadence of revenue maybe in the quarter and what we saw in July, and link that to the Google changes as well. So if I start with our referral revenue development on a global level, we said last time that our referral revenue declined by a low single digit in April. Then in for the second quarter, we reported a decline of 13%. May and June was down more than that 13%. In July, the decline improved from June to be more in line with a decline we saw for the second quarter overall. So that gives you an idea, roughly, of the improvement in July versus June. I think it's a combination of factors that led to first higher than expected year-over-year declines in May and June. I called them out: normalization, seasonality, and travel demand, and our levels of monetization. I guess that’s clear last year; we saw strong pent-up demand going into summer and our advertising partners leading in, so we observed strong auction dynamics as well. Both are leading to difficult comparisons now. We now see a normalization in seasonality. The other one is the Google Ads changes that we started to observe in May. Again, it's a bit harder to quantify that given everything that's going on, and it always depends on bidding dynamics by other partners as well. But the important takeaway for us is that in July, some of these factors improved. As a result, we saw an improvement in our performance marketing volumes. So I think that gives you an idea of the level of improvement in July versus June. And again, it's driven by a slight improvement in monetization, which is still down year-over-year; and also by the Google dynamics, as we saw that we captured more volumes again. Does that answer your question on the revenue cadence?

Yes, that makes sense. And any insights on the use of cash or just plans for capital?

Yes, sure. I think we acknowledged that in the past that our current capital structure is not optimal. We have quite some cash on the balance sheet. It gives us some flexibility, though. The new management team just started a few months ago. They will also evaluate unorganic growth options, though that is not the primary focus for us right now. What this means is that we are not in a rush, but we will continue to look at ways to optimize our capital structure and might do something in the next couple of months.

Our next question comes from Lloyd Walmsley from UBS.

Great. Thanks. So last quarter, you guys commented on customers increasing ROAS threshold targets. You've talked about commercialization being a little bit weaker. Can you just help us bridge? Are some of these customers still looking for higher ROAS marginally? I think, what other feedback are you hearing from some of your bigger customers on that side?

So yes. I mean, we call it out as a normalization. I think that is what I would also answer here, that we think it's at good levels, and we don't have any signals that this would be changing. I think overall it's important to stay relevant to build a brand, so we deliver great-value customers to them. As long as we deliver on that, I wouldn't have major concerns.

Sure. Following up on the geographical changes, could you provide more details on what you're experiencing in the Americas? It seems that the Google changes are worldwide, but regarding the conversion divergence in the U.S., is there anything else you can share?

Thanks, Lloyd. There's not much to add, to be honest. To understand July, we need to look at the overall revenue decline in the second quarter, which has been consistent across regions, with no one region performing significantly better or worse than the others. This makes it straightforward. Regarding conversion, it's relatively stable in the Americas with no major changes. Europe saw an improvement, mainly due to mix effects. In the Rest of World, we have similar mix effects and also a recovery, with booking conversion in that segment increasing and getting closer to pre-COVID levels. That's all I can mention about conversion.

Yes. And then, I guess, just if you could explain in maybe a little bit more simple terms what exactly the sort of changes are at Google that you're seeing and how that's playing out?

Google introduced a new property promotion ad format in their search engine results. When you search for hotels in New York, you'll now see this property promotion ad, which wasn't there before. We didn't take part in this ad format before it was rolled out, and as it gained visibility over traditional ad placements, we experienced a decrease in traffic. In July, we started our first campaign to test this ad format, and we are monitoring its performance. Advertisers who used this format gained insights into its conversion compared to traditional ads, and also in other platforms like GHA. We anticipate that the bidding dynamics may also evolve with the visibility of this ad unit. While we cannot predict this precisely, we are now engaging with this format and will learn about conversions and returns. Based on our findings, we'll decide on our future approach.

And it's basically to have a visual impression about it. It's essentially a list of hotels that appears at the top of the hotel section and above the AdWords text ads, leading directly to the advertiser. The important thing is that we haven't been part of this because it was included in the Google hotel ads product. We tested it and found it didn't perform well, which is why we weren't involved before, but now we are entering this space.

All right. Thank you, guys.

Our next question comes from Kevin Kopelman from TD Cowen. Kevin, please go ahead. Your line is now open.

Great. Thanks a lot. I was wondering, could you give some more color on the response you're seeing for the ramp-up in advertising? Maybe, anything you could share in terms of traffic levels or engagement responding initially to the ramp-up in the second quarter of ad spend, how that's compared to maybe how users have responded before the pandemic and if that can give you an indication of how it's going to perform going forward? Thanks.

Sure. Thanks, Kevin. So as I said, we are happy with the results. That's why we continue to invest and stick to our plan to ramp up brand investment despite lower monetization levels. Short term, what we try to measure is direct response. So with our ads, how effectively can we bring people to our website? Obviously what is relevant is that incremental traffic, and that's what we are trying to measure. If I compare what I see right now to pre-COVID, then obviously there are some differences by market. In some markets, it's better; in some markets, it's slightly worse. On average, I would say pretty similar, which is good because we ramped up. Compared to last year, for example, we still see the same response at a higher scale. That's why we'll continue to invest. In terms of engagement, I think that's not a big change to call out, which is also positive. So it's not that you bring traffic to the website, and that traffic doesn't engage or you see lower conversion or anything. It's pretty good, from what we see, and again not materially different from what we experienced maybe in 2019 or pre-COVID.

Okay, great. And then just a separate one. There was a European low-cost airline; you mentioned that they had seen some softening in closed-in bookings in Europe in June and July. I'm just wondering if you had seen anything similar.

I could not call that out. I mean, as I said, for us, in July, dynamics improved relative to June, but this could also be because the vast majority of our traffic is not related to airline traffic. It could be one reason. It could be our mix. Obviously, there's a lot of noise with all these changes in performance marketing channels, so maybe there was some change that we just couldn't see because of all that noise; but looking at Johannes as well, I don't think there's anything we can call out.

No. ABVs are stable high. And you don't see a dip. I think that's what we are hearing from airlines and car rentals as well. That's not what we are seeing at the moment.

Our next question comes from Brian Fitzgerald from Wells Fargo.

This is Stan Velikov asking for Brian. First, regarding the factors that led to the lower revenue in Q2, you mentioned changes in Google ads, reduced traffic, and decreased monetization, along with a shorter period of time. How would you rank these in terms of their impact on revenue? Secondly, if you could exclude brand advertising from the total advertising spend and focus on performance marketing, how does the ROAS compare year-over-year and quarter-over-quarter?

Thank you for the questions. Both are insightful, but they are challenging to answer. Quantifying the impact on revenue is complex due to various dependencies. While it's possible to measure the direct effects of reduced monetization, it's more difficult to assess the secondary impacts, especially when other factors, like the changes in Google ads, come into play. Additionally, we are in a dynamic marketplace where advertisers often adjust their ROI targets, which influences our analysis. That's why we focus on the aggregated impact. Specifically, we see a 50% normalization in seasonality, 30% in monetization, with the remainder attributed to changes in advertising. All of these elements are significant contributors. Regarding the split between brand and performance, we don’t disclose that detail, but we maintain strict ROI performance targets on our performance marketing channels. There will always be some volatility due to variations in monetization and competitive dynamics in the auction. However, our strategy remains consistent, and we will manage our auction and performance channels with ROI targets similar to those we've maintained in the past. For the brand side, this means that incremental ROAS is typically below 100%. As spending increases during ramp-up, the negative impact intensifies. While I can't provide an exact figure for this effect, it's clear that increasing brand spending poses a short-term challenge to ROAS.

Great. Thank you very much.

Our next question comes from Doug Anmuth from JPMorgan.

Great. This is Dae on for Doug. Thanks for taking the questions. I have two. So the first one, could you elaborate a little bit more on your comments on overall travel demand? I know you talked about it being robust, but it feels like your advertisers aren't changing their ROI targets on your platform, so curious to hear if you think that's driven more by consumer demand shifting a little bit. Or do you feel like the demand level is still very strong and they're just upgrading ROI targets, and it's just taking up of our comp? And then second question is: Where are you guys on your ramp-up in brand investment? Do you expect to continue to ramp up brand spend going forward? And related to that, is when do you expect ROAS to start expanding again?

Thank you, Dae. Regarding your first question about the change in ROI targets for our advertisers, we already mentioned this was happening in the first quarter. It’s not a new development. Honestly, it's not unexpected either. We indicated last year that we would benefit from a strong auction. We observed that markets in Europe and the Americas were rebounding from COVID, with advertisers eager to capitalize on the recovery. Their focus was more on participating in growth and gaining market share rather than profitability. However, towards the end of last year, this mindset shifted. There was a broader shift in focus towards profitability, not only in travel but across the board, which influenced our monetization and the ROAS targets for advertisers on our platform. As Johannes mentioned, we don’t perceive these targets as low right now, hence our reference to normalization. The auction remains healthy, though not as strong as last year. I don’t believe this is linked to any change in demand. As I've stated before, demand remains strong, and we haven’t observed any significant changes. There have been questions over the last six months regarding whether the high ADRs would eventually lead to lower demand, but that’s not what we’re witnessing. Both ABVs are still high. The only point we've noted is a trend towards shorter lengths of stay, but we haven’t detected any drop in demand based on our measurements. As for your second question about our brand investments, it’s still relatively early. These types of investments take time to manifest. You can’t expect immediate results; it’s a long-term endeavor. It’s essential to understand that you can’t advance from 0 to 100 instantly; it requires gradual development over time. This builds a flywheel effect that accumulates benefits year over year. We’re still in the early stages, especially considering we didn’t really invest in 2020 and 2021 and only began selectively last year. This year, we are expanding our efforts in certain markets, focusing on establishing or rebuilding our brand presence and traffic over the next few years. Generally, you can expect to see minor improvements annually, and we plan to discuss these developments in future updates. Additionally, at the end of July, as per our annual practice, we will assess the overall summer campaign to evaluate its effectiveness and identify areas for improvement. Based on that evaluation, we will determine our plans for next year and will keep you informed in our next update.

Okay, great. Thank you.

Thank you. There are no further questions on the line, so I'll now hand back to Johannes for any closing comments.

Thank you for joining the call. We appreciate your continued support and confidence in us, and we look forward to sharing our progress in the quarters to come. Stay safe. And remember: When you think hotel, think trivago. Thank you.

That concludes today's conference call. Thank you very much for joining. You may now disconnect your lines. Have a lovely rest of your day.