The Brink's Company (BCO) Q3 2014 Earnings Report, Transcript and Summary

Welcome to The Brink's Company's Third Quarter 2014 Earnings Call. Brink's issued a press release on third quarter results this morning. The company also filed an 8-K that includes the release and the slides that will be used in today's call. For those of you listening on the phone, the release and slides are available on the company's website at brinks.com. [Operator Instructions] As a reminder, this conference is being recorded. Now for the company's safe harbor statement. This call and the Q&A session contain forward-looking statements. Actual results could differ materially from projected or estimated results. Information regarding factors that could cause such differences is available in today's press release and in the company's most recent SEC filings. Information presented and discussed on this call is representative as today only. Brink's assumes no obligation to update any forward-looking statements. This call is copyrighted and may not be used without written permission from Brink's. It is now my pleasure to introduce your host, Ed Cunningham, Vice President of Investor Relations and Corporate Communications. Mr. Cunningham, you may begin.

Thank you, Denise. Good morning, everyone. Joining me today are CEO, Tom Schievelbein; and CFO, Joe Dziedzic. This morning, we reported our third quarter results on both the GAAP and non-GAAP basis. The non-GAAP results exclude several items, including U.S. retirement expenses, certain compensation and employee benefit items, acquisitions, dispositions and some currency-related items, including the write-down of net monetary assets in Venezuela. The charges related to the recently announced restructuring of our Netherlands operations also are excluded from non-GAAP results. The non-GAAP results use a tax rate of 38%, which is the midpoint of our full year range of 36.5% to 39.5%. Please note that the full year range increased by 150 basis points due to the exclusions of earnings from our equity interest in a Peru-based CIT business that was sold during the quarter. We believe the non-GAAP results make it easier for investors to assess operating performance between periods. Accordingly, our comments today will focus primarily on non-GAAP results. A summary reconciliation of non-GAAP to GAAP results is provided on Page 3 of the press release. More detailed reconciliations are provided in the release, in the appendix of the slides we're using today and this morning's 8-K filing and on our website. Please note that Page 10 of the press release provides a summary of selected 2014 outlook items, including revenue and margin guidance for each of our 4 geographic segments. Page 11 presents the same outlook items adjusted to reflect the impact of the substantial devaluation of the Venezuelan bolivar in the first quarter of this year. It uses an exchange rate of VEF 50 per U.S. dollar for all 4 quarters of 2014. Finally, Pages 14 through 18 provide hypothetical quarterly results for 2013 and the first 3 quarters of this year, also with results adjusted to reflect the impact of the devaluation in Venezuela. I'll now turn the call over to Tom.

Thanks, Ed. Good morning, everyone. Third quarter earnings of $0.19 a share came in well below last year's $0.69 due primarily to the $44 million decline in segment profit, $32 million of which was attributable to an organic profit decrease driven almost entirely by Latin America, most notably Venezuela, Mexico and Brazil. Outside of Latin America, profits were relatively flat. $32 million organic profit decline includes a $10 million theft loss in Chile that was allocated across all of the regions. On top of the organic decline, currency translations had a negative profit impact of about $12 million. Third quarter results were clearly disappointing, and we've reduced our 2014 segment margin rate guidance from 6.5% to a range between 5.5% and 6%. We continue to expect strong profit growth in 2015 and '16 as operational improvements begin to take hold, particularly in the U.S. and Mexico. Our target for 2015 is to achieve a segment margin rate of 6.5% to 7% on revenue of $3.8 billion. We remain firmly committed to our goal to achieve a full year segment margin rate of 8% by the end of 2016. Our 2016 targets were originally disclosed during our July 24 earnings call. We recently announced the divestiture in Peru and a significant restructuring of our operations in the Netherlands. I want to make it clear that we considered the possibility and the potential financial impact of these actions before disclosing our 2016 targets in July. Decision to restructure our Netherlands operation was in response to the loss of business at Rabobank, our largest customer in that country. 2011, the country's 3 largest banks, with the support of the Central Bank of the Netherlands, founded a collaborative entity known as GSN, which has been providing money processing and CIT services since then. Brink's is continuing to provide all ATM managed services to Rabobank until July 15 -- until July of 2015 when the GSN will assume these services as well. We challenged the validity of the GSN entity based on antitrust regulations. That challenge was unsuccessful, and we are appealing that decision. As a result of this loss of business, our GAAP results for the quarter included a charge of $16 million or $0.24 a share. Upon completion of the restructuring, we expect annual revenue from the Netherlands to be about $40 million, down from about $120 million. During the third quarter, we also completed the sale of a minority interest in a Peru-based cash-in-transit business for $60 million, which generated a GAAP gain of $44 million or $0.45 per share. Proceeds from that sale have been used to reduce debt. Joe is now going to cover the details behind the quarterly results, then I'm going to close with some additional comments before we take your questions. Joe?

Thanks, Tom, and good morning, everyone. Total reported revenue for the quarter declined 7% due primarily to the devaluation in Venezuela. On an organic basis, which excludes currency impact and acquisitions and dispositions, revenue was up 13% due to growth in Venezuela, and to a lesser extent, Brazil and Argentina. On Page 13 of our press release, we provide the third quarter and year-to-date reported and organic revenue growth rates for our 6 largest countries. The currency devaluation in Venezuela that occurred late in the first quarter of this year resulted in a 78% decline in the Venezuela reported revenues for the third quarter, even though the local currency growth rate was 74%. Argentina, a much smaller country, had a similar scenario, as reported revenues decreased by 12% due to currency devaluation in spite of 31% local currency growth. Mexico revenues were down 8% in the quarter as they have not been able to overcome the volume lost in late 2013. The organic growth in the quarter was primarily in Venezuela, Brazil and Argentina, but it was not enough to overcome the currency devaluations. Brazil continues to deliver strong growth despite slow macroeconomic growth. There was a bright spot in the U.S. where revenues grew more than 3% organically for the first time since the third quarter of 2008. The growth was in most lines of business and was spread across numerous customers. We expect this growth to continue into the fourth quarter and early 2015. Segment operating profit declined $44 million driven by a $22 million decline in Venezuela, the $10 million theft loss in Chile and $5 million declines in both Brazil and Mexico. The earnings per share declined 72%, and this slide explains the changes versus last year. The segment profit decrease of $0.56 per share was driven mainly by Venezuela results, which, in addition to being affected by the devaluation of the bolivar, were also affected by higher labor cost associated with the finalization of a collective bargaining agreement. Last year, this agreement was completed in the second quarter and selling prices began to catch up in the third quarter. This year, we expect to recapture some of the increased labor cost with higher pricing in the fourth quarter. Profits in Mexico and Brazil also declined. In Mexico, delays in replacing volume from previously reported customer losses led to lower-than-expected profits. We expect significant improvement in Mexico in the fourth quarter due to cost-reduction actions that were taken in the second and third quarters, normal seasonality improvement and the addition of some new business. Brazil's profits declined due mainly to a delay in the timing of price increases, which we expect will be fully implemented in the fourth quarter. Our results were also affected by a $10 million theft loss in Chile. The impact of this loss was allocated across all of our regional segments, which is consistent with how we allocate global expenses. The changes in noncontrolling interest were a partial offset to lower profits in Venezuela. The summary from this chart is the $0.50 decline in earnings per share was caused by 3 primary factors: Venezuela declined $0.21 from unfavorable currency and the timing of passing through wage inflation; the Chile theft loss was $0.13; and Mexico and Brazil combined were about $0.13. Third quarter cash flow from operating activities, including pension payments, declined by $57 million. If you exclude pension payments from this measure, the cash flow actually improved by $17 million. The rationale for excluding pension payments is that $61 million of the payments were voluntary. The $17 million improvement was due primarily to the timing of payments to customers for losses and reimbursement from insurers. Year-to-date capital expenditures and capital leases decreased by $34 million as we significantly reduced this year's IT spending on the finance shared services implementation and other projects. We also reduced the spend on money processing equipment and other related equipment and purchased fewer armored vehicles due to the timing of a global tender. Net debt increased by $100 million since the end of 2013 due mainly to the write-down of cash and cash equivalents in Venezuela from the currency devaluation. The pension payments this year were largely offset by the Peru disposition proceeds and the increased cash flow from the timing of insurance receivables collections. As we continue to tighten the reins on capital spending and execute global tenders through our new global procurement processes, we have driven our reinvestment ratio to slightly less than 1.0. We will continue to invest to protect our employees and customer valuables while managing our capital spending prudently. During the quarter, we prepaid our 2015 and 2016 required contributions, totaling $61 million to the primary U.S. pension. We funded these payments using available cash and existing credit facilities. This is a continuation of our efforts to de-risk the pension plan and minimize future volatility. It also reduces our pension benefit guarantee corporation premiums. Based on current estimates, we do not expect to make a required pension payment until 2020. We will update the assessment at year-end when we conduct our annual remeasurement of pension assets and liabilities. We also recently offered eligible pension plan participants the option of receiving a lump-sum payment or reduced annuity. As a result, we expect to incur a fourth quarter, noncash settlement charge against our GAAP earnings of between $50 million and $65 million. The amount of the charge depends on the number of respondents who choose one of these options and the actuarial assumptions at the remeasurement date. With regard to UMWA liability, we do not expect to have any cash outflows until 2033. That covers the third quarter. I'll turn it back over to Tom.

Thanks, Joe. Before opening up the call for questions, I have some additional comments on the guidance we provided today. We expect improved results in the fourth quarter, particularly in Latin America. However, the disappointing third quarter results require us to reduce our full year margin guidance for 2014. We expect strong profit growth in 2015 and '16. The chart on Slide 12 shows the progression of our margin expectations through 2016. We expect to end this year somewhere between 5.5% and 6%. We believe that the operational improvements that we are making, particularly in the U.S. and Mexico, will have a major impact as we move through 2015 and '16. So the 8% margin goal we provided in July has not changed. Rest assured, we are keenly aware of the challenges we face and we are aggressively pursuing additional productivity and cost-reduction opportunities. Our improvement initiatives cover many areas. Last quarter, we provided more specific information on these efforts, including performance targets and estimated profit impact. I'm not going to repeat those details today, but the targets are still intact and we'll provide an update on our progress when we report fourth quarter results. The global procurement initiatives and the centralization of IT and other administrative functions are well underway, and they should have a positive impact throughout our global operations in '15 and '16. But the largest and most visible opportunities are the turnaround efforts in the U.S. and Mexico. Strong margin growth in those 2 countries is critical to the achievement of our 2015 and '16 targets. The chart on Slide 14 shows the progression of our margin expectations for North America, excluding the impact of our planned spending on our global payments business. This year, we expect to expand our North American margin to the 2.5% to 3.5% range. 2015, our cost-reduction efforts, combined with the on-boarding of the new business, should improve our margin by at least 100 basis points. By the end of 2016, we expect to reach our 7% margin goal. There's a similar chart on Slide 15 for our Mexico operations, which we acquired at the end of 2010. At that time, it was generating a little over $400 million in revenue and was not profitable. Our stated goal all along has been to achieve a margin rate of 10% or better. At the end of 2013, we are about halfway to that 10% target. Earlier this year, we exposed our expectation of a decline in Mexico's profit in 2014 due to a combination of factors, including less favorable price and volume levels related to the loss of certain customer contracts and a onetime insurance payment. Replacing the lost volume has taken longer than we anticipated, so we've reduced our 2000 [ph] margin rate from 4% to somewhere between 2% and 3%. We expect the addition of new business, along with additional cost actions, to lead to higher profits in the fourth quarter and a resumption of profit growth in 2015 and '16. You may recall this slide from our call in July. None of the revenue or margin rate targets has changed, we have adjusted the 2013 baseline operating margin and EPS figures downward to reflect the exclusion of profits from our divested equity stake in Peru. Our path to achieving our segment margin goal of about 8% still requires us to boost the U.S. margin by about 400 basis points to 6%, Mexico by 500 basis points to 10% and the rest of our operations by about 100 basis points. Achieving these margin goals, even with no revenue growth, generates about $80 million of incremental profit and gets us to $290 million in total segment profit. It would also drive earnings up to around $2.50 a share, an increase of more than 60% over our 2013 adjusted earnings of $1.52. We layer in annual organic growth of 5%, segment profit could reach $330 million, which equates to about $3 per share in earnings. So we continue to believe we have a great opportunity to create substantial value for our shareholders. The execution of our turnaround efforts in the U.S. and Mexico as well as the accelerated implementation of global procurement and our centralization efforts are critical to our success. In closing, I want to assure you that we intend to supplement these efforts with additional measures to aggressively reduce costs throughout our global operations. That concludes our prepared comments. So Denise, let's open it up for questions.

[Operator Instructions] And we have a question from Jeff Omohundro from Davenport & Company. Jeffrey F. Omohundro - Davenport & Company, LLC, Research Division: Two questions. I wonder if you could first address what impact you see from globally lower oil prices, in particular impact on the domestic business and internationally. And then, second, when you look at the Mexico recovery and the expectation for a pickup in Q4, wonder if you could provide little more details on the breakdown of the top line versus cost, and then how you see the recovery in the Mexico business progressing during 2015. Is it a steady progression to reach that substantial improvement or lumpy, more back-end loaded?

Joe, you want to -- clearly, on the fuel, I'm going to let Joe talk about the fuel. But we haven't seen any huge impact yet, but the fuel has just started to come down. So I'll let Joe address the fuel, and I'll talk a little bit about Mexico.

Fuel is a very, very small percent of our total operating cost. It's more so in the U.S. because we have longer distances and more drive time than in other countries, but it's not changed in a material enough way to have an impact on our operating profit. And particularly in the U.S., there are also adjustment clauses in many contracts as fuel moves up and down, but it's faster to customers, less so outside the U.S. And to the extent that lower fuel prices drives macroeconomic growth, that obviously would have a positive impact for us, particularly in Latin America.

So that would clearly be -- it's not a headwind, but not very much of a tailwind either. In terms of Mexico, we've taken significant cost reduction actions in the second and third quarters. So we anticipate that those, obviously, will fall through in the fourth quarter, but they will be there for the entirety of 2015 and 2016. Starting to see some of the volume increases that we talked about, but they have not come on nearly as rapidly as we anticipated. Joe, any further comments on Mexico?

No, the only thing I would add is the cost actions that we've taken in the middle of this year will help the fourth quarter, and that will give us a lower-cost run rate entering next year. We continue to drive a number of different actions in Mexico to generate productivity. Your question on how much of it is top line versus cost, we did lose a significant amount of financial institution business at the end of 2013. That is what's driving the pressure on 2014. We have been able to pick up a fair amount of retail business. It was -- it happened slower during the year than we anticipated, and we do expect to close more of that business in the fourth quarter to give us a better run rate on both top line growth going into '15 as well as the lower cost. But we also recognize that our primary strategy in Mexico is to get the cost structure in line to improve the profitability. We're not dependent upon significant top line growth in Mexico. The slides and the information we provided in the second quarter, we showed that versus 2013, we were only expecting a 2% compounded growth rate -- I'm sorry, 3% compounded growth rate from '13 to '16. Now that's a bit -- you can see that's a bit of a decline in '14 as were 6% or 7% decline in '14. So '15, '16 we have to grow in the mid- to high single digits to get us to that targeted revenue for 2016.

And our next question is from Jamie Clement from Macquarie.

Joe and Tom, I wanted to just clarify your non-GAAP margin guidance now that we're 9 months through. What was a little bit unclear to me in trying to kind of figure out what you're implying for the fourth quarter is -- with the 5% to 5.5% non-GAAP segment margin, are you assuming that year-to-date operating or segment income is about $117 million or $147 million? And I think that's a function of whether you take the bolivar devaluation to January 1 or when it actually happened.

So Jamie, I'll refer you to pages in the press release, and it's Page 5 which shows the third quarter year-to-date segment results. So if you look at the bottom of that slide on the bottom right, there's a column year-to-date 2014 that shows the $147 million. That corresponds to a margin rate on a year-to-date basis of 5.2%. That is what corresponds to our 5.5% to 6% margin guidance.

That's what I -- Joe, that's what I was curious about because I was also then around the press release. I think it's around Page 14 or 15 where you showed the year-to-date adjusted non-GAAP, which I think takes the hypothetical scenario of the bolivar valuation change at January 1. That's what I was a little unclear on. You understand the question?

Yes, so the adjusted non-GAAP margin dollars of [indiscernible] or 17.7 that you're referring to, that corresponds to a guidance of 5% to 5.5% segment.

Okay. So on the way my kind of back-the-envelope number is -- look, is you're assuming about $3.6 billion of total revenue for the year and what you've generated year-to-date. Are you looking for -- is the implied -- let me just make sure I'm right here. Is the implied non-GAAP segment margin for the fourth quarter kind of the mid- to high 3s to kind of the mid-5 range? It is that -- does that sound right to?

It would put you in the mid- to high single-digit margin rates for fourth quarter to get to the 5.5% to 6% on the GAAP -- non-GAAP basis. Or if you want the adjusted GAAP, but it's the same. [indiscernible]

Okay. Maybe we can take that offline. I'm getting to margin numbers that are -- for the fourth quarter, that would be more like low to mid-single digits. But we can take that offline. But basically, really, kind of what I'm getting at here is -- and let's -- I mean, let me just ask the question in broader terms is, with the dollar having strengthened and with the economies in Latin America, which has historically been your best growth region, potentially looking a little bit weaker, potentially looking at maybe first quarter 2015, Argentina devaluation again. I mean, obviously, you're comfortable with the guidance you put out for next year, but I mean, that's a lot of ground to make up in that region. And I just wanted to ask for, like, a little bit more color on your confidence surrounding that or whether the current guidance is -- excludes the potential for devaluation or a pullback in the real, et cetera, et cetera.

So let me answer your first question which was -- I answered it a different way. We're 5.2% margin year-to-date. So to get to guidance of 5.5% to 6% for the full year, the fourth quarter has to be above the year-to-date, 5.2% or so. That's how we get to a mid- to high single-digit margin rate for fourth quarter. It's the only way we get it above the 5.2% year-to-date number. We have looked at the current exchange rates. That's been factored into our fourth quarter guidance. If there's a significant deval in the main countries, where we earn our income, whether it's France or Brazil or Argentina or Mexico in the fourth quarter, that would affect us. But right now, based on where the exchange rates are, we're comfortable with this guidance.

Okay. I was looking more, to be honest with you, Joe, more towards kind of the first half of 2015 because kind of where the dollar is trading compared to some of the big-currency markets you operate in, it seems like the comps potentially lining up to be a little more unfavorable in the first half rather than even here in the third or the fourth quarter.

Well, there's no question that exchange has moved against us in the last 4 or 5 months. I'd -- given that we can't predict the exchange rates, we [indiscernible] manage them as best as we can. But for sure, that exchange rates have moved against us given our footprint in the last 4 or 5 months.

And our next question is from Saliq Khan from Imperial Capital.

This is Saliq speaking on behalf of Jeff Kessler. The interesting thing is that you look at a billion-dollar business, this [indiscernible] having a lot of issues is that the upside is very high. Obviously, if you fix this you're able to generate a ton of significant value for the shareholders. As you're considering the rising net debt and the weakening currencies, how do you guys think about capital return, such as the $20 million dividend the best use of your capital or are you able to invest in the business to be able to look at long-term growth as well?

Well, have -- I mean, we have the dividend. We think that that's an appropriate use of the funding. We, obviously, will look at additional opportunities as they occur relative to growth, and we have some of those opportunities whether they be payments or some of our global services business. But other than that, we are going to be extremely focused on our core business and how we improve the profitability there. So to the extent we need capital for that, which we don't anticipate, that's where we'll be looking for.

You guys have previously mentioned route optimization as a key to bringing a lot more efficiency as well. Currently, I believe, there's someone that does this mainly by looking at a map. Where exactly are you guys in the process of being able to pick some sort of software, so you can gain the incremental revenue from one -- point A to point B?

So we have got this in terms of piloting in the U.S. So we have a number of places that are already underway. We do it as well in France and Brazil today. So we will be rolling that out across the U.S., to begin with, next year. And then depending on the actual returns we get from that, we will look to roll it out in other countries that don't have it yet. And so, yes, I mean, it's -- it can make a big difference in terms of dynamically planning the routes and removing cost structure from those routes. At the same time, it's an investment in software and in hardware and in handhelds and in training that we have to make sure yields a return on the investment.

No, I agree with you. That means a lot of missed revenue. Right now you guys have the opportunity to be able to capture -- or better capture if you're able to go ahead and find some sort of route optimization or whatever software it is that you guys need to essentially pick off the shelf. One of the interesting things are is that if you look at India or if you look at China and the goal is being imported into this country, and I know that we talked about this previously as well, is what are you guys doing to essentially being able to tackle that duty tax to essentially increase from, I think, 1% to 2% up to 10% as well that may have impacted your overall business. Are you guys back at the table having that conversation and being able to take hold of the transportation of gold within that country as opposed to guys right now, who are essentially slitting open their bodies and stuffing it with gold and walking across the border?

Are you talking about India?

Right. Exactly.

Okay, I thought -- I mean, I was -- I misunderstood China. Clearly, the increase in duties in India on gold has had an impact on the volumes that we've seen. It has decreased those volumes. We continue to work as best we can and compliantly to continue to work on increasing those volumes. There's very little that we can do relative to the illegal smuggling of gold.

Okay. And the last question I had was, last I checked in with you guys, your attitude towards debt is that you're essentially -- sorry about that, that you're certainly open to it. And as you look at opportunities for different lines of business, where are you guys with that? If -- making any sort of headway at all?

We said we were open to that if it was positive to our earnings. So we have got our payments business, which we are continuing to invest in. And to date, it is promising in terms of return, but it's not hugely meaningful to our bottom line at this point. We will continue to look at additional areas within our global services businesses, which is the movement of the diamonds, jewelry, precious metals and banknotes. Those are the primary areas where we're looking at possibly deploying that capital. But unless we find something that is positive, we don't plan on spending the capital.

[Operator Instructions] Our next question is from Ashish Sinha from Gabelli.

I just had a couple. I appreciate you talking about what's driving fourth quarter margins in LatAm, but if you could talk the same about North America. So 9 months is you're running at 1.7%. Your full year guidance is 2% to 3%. Now that would mean at the midpoint of the guidance, Q4 margins should be closer to 5%. So what's basically driving that improvement in fourth quarter relative to the third quarter? And my second question is on GSN and what's going on in Netherlands. So are you seeing a similar trend by some other banks in some other regions getting together, forming consortiums to in-source their cash operations?

So I'll start with fourth quarter for the North America segment. We did see good revenue growth for us, which although it was 3% to 4% in the third quarter, it's the first time it's been at that level since 2008. So we've gotten some good traction. There are a few headwinds to the revenue, one in particular the Loomis money processing is moving to BofA, which really starts to impact us in the fourth quarter. We've got enough traction, we feel, in lots of other segments with smaller banks and with retailers and with our CompuSafe product that we feel like the revenue is going to keep growing in the fourth quarter. And the cost actions that we've taken earlier in the year and some of the productivity initiatives will generate enough savings in the fourth quarter that we will be able to improve fourth quarter margin rate versus year-to-date and get into the full year range that you referenced. With respect to the GSN in the Netherlands, that is -- it's a very unique situation, where the Central Bank and the largest 3 banks that make up the vast majority of the marketplace have gotten together and formed a consortium to effectively in-source much of the activities, particularly managed services, to the consortium. And then they're outsourcing some of the more commoditized services. And because of our relationship with a few of the banks and the way the consortium developed, we were not involved in the outsourced commoditized services. Where we had been very successful in the Netherlands was the managed services. That's now being in-sourced by the consortium. But we don't see that activity or anything like that occurring anywhere else in the world today.

I mean, it is interesting that the Netherlands went in that direction. And the largest country in Europe that we have, France, has gone exactly the opposite direction and is looking to outsource much more of that cash supply chain, which we are in the process of working on. So in Ireland, it's the same. A number of the countries in Europe are the same and they tend to be leading the rest of the world on that particular subject. So GSN is unique that we can see. Obviously, we don't agree with it since we filed suit, but we don't see that happening anywhere else.

[Operator Instructions] We have a follow-up question from Jamie Clement from Macquarie.

Tom, I think you probably took care most of this with your remarks a couple of seconds ago. But just with respect to GSN in the Netherlands. I mean, clearly the trend has been in exactly the opposite direction of that globally for a decade. I mean, as it -- I mean that this has been one of the -- one of the growth drivers of your business is that a lot of that work is being outsourced, right? I mean, there's no reason to expect that trend to change, right?

No, exactly. I mean, if you can get into a lot of discussions about cost effectiveness, you can get into a lot of discussions about how effective our governmental entities or sole-source entities. I would just tell you that everywhere else in the world, we're talking about -- the banks are talking about saving money by outsourcing. So this one is unique. It's very unfortunate because we have a extremely high-performing business in the Netherlands.

And ladies and gentlemen, showing no further questions at this time, we will conclude our question-and-answer session. We would like to thank you for attending today's presentation. You may now disconnect your lines.