Clarivate Plc (CLVT) Q3 2019 Earnings Report, Transcript and Summary

Good day, and welcome to the Clarivate Analytics Q3 2019 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I would like to turn the conference over to Anthony Gerstein, Vice President, Head of Investor Relations. Please go ahead.

Thank you, operator, and good morning, everyone. Thank you for joining us for the Clarivate Analytics third quarter 2019 earnings conference call. With me today are Jerre Stead, Executive Chairman and Chief Executive Officer; and Richard Hanks, Chief Financial Officer. As a reminder, this conference call is being recorded and webcast and is copyrighted property of Clarivate Analytics. Any rebroadcast of this information in whole or in part without prior written consent of Clarivate is prohibited. This morning, Clarivate issued two press releases, the first announcing its third-quarter results for the period ended September 30, 2019, and the second, announcing the divestiture of certain assets within the Mark Monitor product line. These releases, as well as the third quarter earnings supplemental presentation are available in the investor relations section of the company's website, clarivate.com under events & presentations. During our call, we may make certain forward-looking statements within the meaning of the applicable securities laws. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the business or developments in Clarivate's industry to differ materially from the anticipated results, performance achievements or developments expressed or implied by such forward-looking statements. Information about these factors could cause actual results to differ materially from anticipated results or performance and can be found in Clarivate's filings with the SEC and on the company's website. Our discussion for the quarter will include non-GAAP measures or adjusted numbers, including adjusted revenues, EBITDA, adjusted EBITDA, adjusted EPS and free cash flow. Clarivate believes non-GAAP results are useful in order to enhance an understanding of our ongoing operating performance, but they are supplement to and should not be considered in isolation from or as a substitute for GAAP financial measures. After our prepared remarks, we'll open up the call to your questions. With that, it's my great pleasure to turn the call over to Jerre.

Thank you, Anthony, and thank you, everyone, for taking the time to join us for the call today. I am very proud of our team. We delivered strong financial results while accomplishing a tremendous amount of core foundational work in the period. I'll give you an overview for the third-quarter results and an update on the progress we've made on several key initiatives. Then Richard will provide more detailed financial commentary before we open the call to your questions. As I said, I'm pleased with our results for the quarter. They were in line with our expectations, and we are on track for the guidance we gave for 2019 back in January of this year, which we are now reaffirming today. Adjusted revenues increased 3.6% on a constant currency basis with adjusted subscription and adjusted transactional revenue growth of 2%, 11.6%, respectively, on a constant currency basis. The increase in subscription revenue was primarily due to pricing and new business with both product groups, while the increase in transactional revenue was due to timing as well as greater backfile sales. In addition, the biannually published boiler pressure vessel code standards were delivered this quarter. As this is a periodic publication, its availability on sales contribute to fluctuations between the quarters for this segment. Our ACV, which is annual contract value of subscription-based agreements increased 3.9% in constant currency, with a revenue renewal rate of 90.6% for the nine-month period ending September 30, 2019. Adjusted EBITDA increased 16.1% to $77 million in the third quarter, and adjusted EBITDA margin was 31.7%, a 350 basis point improvement over last year's third quarter. Adjusted net income was $47.5 million or $0.14 per diluted share compared with $26.5 million or $0.12 per diluted share in the prior period. Please note that the prior period share count excludes the impact of the shares issued in connection with the merger transaction. If normalized for these shares, the results would reflect $0.07 per diluted share for last year's Q3 in comparison to this year's $0.14 we're reporting now. Free cash flow was $68.7 million for the nine months ended September 30 compared to a negative $11.2 million in the prior year. Richard will provide more detail on the significantly favorable swing of this metric. So it was a great quarter, and I want to thank all of our colleagues for their focus and hard work. I'm proud of the global Clarivate team and their commitment to serving customers with excellence to ensure that we deliver against our goals. In addition to delivering very solid financial results, we executed many important special projects that have set us up for future improved performance. Each of these alone would be a lot of work and would contribute to building a strong foundation on which we will drive sustainable, profitable growth. Taken together, they actually represent extraordinary progress this quarter. Let me cover some of those now. In August, we announced an agreement to pay $200 million to terminate the tax receivable agreement with Onex and Baring Private Equity Asia. Settling the TRA removes reported complexities and simplifies our structure, while greatly enhancing our capacity to create shareholder value. Importantly, it creates free cash flow savings of $30 million annually starting in 2021. And Clarivate retains all of its significant tax benefits. As such, the company will continue to enjoy a low annual cash tax expense of approximately $25 million for the foreseeable future compared to an estimated cash tax of $27 million to $28 million in 2019. In September, we completed our first secondary offering of approximately 40 million shares owned by Onex and Baring Private Equity Asia, together with certain other shareholders. The transaction was priced at $16 a share and reduced PE ownership from 71% to 58%. The company did not receive any proceeds from the sale, in which we received very strong interest. And importantly, we were happy to be able to add liquidity to the market, increasing our public float to approximately 108 million shares or 35% of the outstanding shares, up from the 69 million or 23% of outstanding shares previously. In September, we also announced the acquisition of the SequenceBase business, a leader in providing patent sequence information at search technology. Though not a large transaction, this acquisition strengthened our patent offerings in the fast-growing biotech, pharmaceutical and chemical industries. We see opportunities to do more of these tuck-in acquisitions when they fit our criteria to be accretive within the first 12 months of Clarivate's ownership. As we continue to look for strong acquisitions, we will also continue evaluating and optimizing our portfolio of products. Hopefully, you have all seen this morning that we announced the divestiture of certain assets within our MarkMonitor product line. This transaction has two key benefits. First, it will allow us to sharpen our focus on serving our IP customers with innovative, integrated IP solutions across patents, trademarks and domain registrations. Second, under the new ownership and their commitment to investing in innovation, the MarkMonitor brand protection business and its high-profile customer base will flourish. Subsequent to the close of third quarter, we completed a refinancing of our long-term debt at very attractive rates and terms. Specifically, we issued term loans of $900 million at 325 basis points over LIBOR and senior secured notes of $700 million with a fixed coupon of 4.5%, both with seven-year maturities. The proceeds from this refinancing are being used to repay existing debt and settle our obligations under the TRA settlement agreement as already mentioned. This refinancing saves us $18 million of annual interest expense. In addition, we now have a $250 million undrawn revolver that matures in five years, now providing us with a significant amount of financial flexibility. Again, my many, many thanks to the Clarivate team members that drove each of these projects to terrific success while also doing their "day jobs." Shortly after the merger in May, we collaborated with BCG to help us examine our organization and ensure we had structures and processes that would allow us to operate efficiently and effectively. We benchmark cost sites to ensure that our functions were rightsized and then work to simplify the organization and eliminate duplication by analyzing and adjusting spans and layers. We've begun the process of in-sourcing contractors that served as staff augmentation to ensure that we're providing the most cost effective and best service to our external and internal customers. We are reducing costs through simplification and automation of the processes, and we're eliminating duplication by centralizing resources. As part of the simplification and focus, we moved from five siloed business units into two product groups, which are Science, led by Mukhtar Ahmed; and IP led by Jeff Roy. You will hear from both of these leaders at Investor Day next week. This new organization structure has tremendous operating benefits that will allow us to scale as we grow, align sales and product management with a focus on our customers and will help us integrate future acquisitions quickly and effectively. Through the overall streamlining of our organization, we're becoming more agile and flexible, driving focus and execution on these initiatives that have the greatest impact to the company, including more rapid innovation. We are operating with a real sense of urgency. We have many opportunities in which we have not yet capitalized, that is to do cross-collaboration and cross-selling. This restructuring also unifies our commercial and product management functions, making us much more client-centric and allowing us to be more proactive as we serve our customers. Transforming an organization does take some time, and we will complete this work over the next six quarters. We expect to realize $70 million to $75 million of annual run rate cash cost savings as we exit 2020. Richard will give you more details in just a minute. Now moving on to 2019 guidance. We are again reaffirming our 2019 guidance today. Adjusted revenue in a range of $962 million to $995 million, adjusted EBITDA in a range of $290 million to $310 million and adjusted EBITDA margins of approximately 30% plus. We will provide you with our guidance for 2020 at our Investor Day next week. This will include our outlook for adjusted revenue, adjusted EBITDA, adjusted EPS and free cash flow. To summarize, it was a very busy and very, very productive quarter with so much great progress made and lots more to come. As I said, I'm very proud of our Clarivate team, who have stayed focused on serving our customers with excellence in delivering on our commitments and goals. I'm confident that by continuing to execute, we will deliver to our stated goal for many years to come. We look forward to seeing many of you next week at our first Investor Day in New York on November 12. We'll start the day with product demonstrations and move to a formal presentation from members of our leadership team. For those who cannot attend, we will be webcasting the event live on our Investor Relations Day. I'm now going to turn it over to Richard to discuss the financial results before we open for questions.

Thank you, Jerre. As mentioned, it was a good quarter. Reported revenues for the third quarter of 2019 were flat on prior year at $243 million compared to the same prior-year quarter and up 0.4% at constant currency. Recall that the prior-year period revenue included the results of IPM of $7.8 million. IPM was sold in the fourth quarter of 2018. Adjusted revenues accounting for the divestiture of IPM increased by $7.5 million or 3.2% to $243.1 million in the third quarter of 2019, up from $235.6 million in last year's third quarter. Again, as a reminder, this excludes revenue from IPM from the prior-year quarter, as well as the modest impact of the deferred revenue purchase price accounting adjustments. Foreign exchange was approximately $1 million of headwind in this year's quarter, mainly arising from euro and sterling weakness relative to the U.S. dollar. On a constant currency basis, adjusted revenues increased by 3.6% in the third quarter compared to the third quarter of 2018. In terms of currency profile, please note that approximately 83% of our revenues in the third quarter of 2019 were U.S. dollar denominated. Turning to our revenue profile when looking at revenue by geography. We've a consistent balance of revenue across the regions, with 45% of our revenues from North America, 24% from Europe, 23% from Asia Pacific and 8% from emerging markets. Please note that going forward, we will be reporting revenues by geography as follows: firstly, the Americas; secondly, Europe, Middle East and Africa; and thirdly, Asia Pacific. Moving on to revenue by type. Adjusted subscription revenues increased by $3.3 million or approximately 2% at constant currency for the quarter. Our comparative against last year's quarter was slightly more challenging, with prior-year third quarter benefiting from renewal timing that we benefited from in earlier quarters in 2019. Importantly, adjusted subscription revenues increased by 3.7% at constant currency for the nine-month period ended September 30, 2019, which tracks closely with the growth of annual contract value or ACV. The increase in subscription revenues was driven in part by price increases as well as new business with the largest dollar increases in the quarter coming from the Web of Science, Techstreet and CompuMark product lines. Adjusted subscription revenue accounted for 83% of total adjusted revenues in the quarter compared to 82% in the prior-year period. We continue to drive our ongoing strategy of growing our recurring subscription revenue base. At the end of the third quarter, the annual contract value or ACV of subscription-based contracts increased by 3.9% at constant currency compared to the same period last year. This should lead to further improvements in subscription revenue growth in subsequent quarters. As Jerre mentioned, retention rates were approximately 91% for the nine-month period ended September 30, 2019, consistent with the same prior-year period. Adjusted transactional revenues, which represent approximately 17% of total revenues in this year's third quarter increased by $4.2 million or 11% to $42.3 million. This represents an increase of 11.6% on a constant currency basis. The performance was driven by backfile sales in both product groups, along with the release of the biannually published BPVC standards in the quarter. As a reminder, backfile sales are slices of archived data, which are sold either to complement clients use an existing subscription or in certain cases as separate data sets. Looking now at performance across our two product groups. Science Group revenues increased to $136 million, growth of 3.2% as reported and by 3.3% on a constant currency basis. The increase in Science Group revenues was driven by a subscription revenue growth due to new subscription business and price increases, as well as higher transactional revenues. The increase in transactional revenues reflects timing and increases in the sales of content backfiles. The Science Group accounted for 56% of revenue in the quarter compared to 54% in the prior-year period. Intellectual Property Group revenues increased to $107.1 million, growth of 3.2% and by 3.9% on a constant currency basis. IP group revenues were driven by subscription and transactional revenue, with transactional revenues reflecting higher backfile data sales coupled with new standards released during the quarter. Turning now to adjusted EBITDA. Adjusted EBITDA increased by $10.7 million or 16.1% to $77 million in the third quarter of 2019 compared with $66.3 million in the prior year period. The increase reflects higher revenues combined with lower year-over-year expenses in the quarter. Adjusted EBITDA margins were 31.7% in the third quarter compared to 28.1% in the third quarter of 2018, an increase of more than 350 basis points. We are required to report stand-alone adjusted EBITDA on a trailing 12-month basis pursuant to the reporting covenants contained in our credit agreement and indenture. Stand-alone adjusted EBITDA takes adjusted EBITDA and includes two committed add backs. Firstly, an adjustment for extra stand-alone expenses; and secondly, it includes the impact of pro forma cost savings we have implemented. Stand-alone adjusted EBITDA was $324.2 million for the 12-month period ended September 30, 2019, compared to $309.5 million for the 12-month period ended September 30, 2018. Note that we were in a positive net income position in this year's third quarter, which requires us to use the fully diluted share count of 330 million shares in our adjusted diluted EPS calculation. Weighted average diluted shares outstanding were 330 million shares in this year's third quarter compared to 217.5 million in last year's third quarter. As Jerre mentioned, remember that the prior period share count excludes the impact of the shares issued in connection with the merger transaction completed in May 2019. Adjusted diluted EPS was $0.14 in the third quarter compared with $0.12 in last year's same period. If normalized these shares, the results would reflect $0.07 per diluted share for the prior period. As we did last quarter, we will continue to provide you with a slide in the earnings supplement, explaining the diluted share count to assist you with your analysis. Please see the Investor Relations section of our website to find a copy of that supplemental presentation. Cash flow from operations for the nine-month period ended September 30, 2019, increased to $112.5 million, which compares to $25 million in the prior year nine-month period. The improvement in operating cash flow was driven principally by a lower operating loss, which included the impact of a $45.3 million onetime cash settlement and a decrease in TSA expenses of $41.5 million for the nine-month period. In addition, we saw improvements in working capital, including better collection of receivables, partially offset by higher deferred revenue liabilities as well as timing associated with accounts payable and accrued expenses. Capital expenditures for the nine months ended September 30 were $43.7 million, up from $36.2 million in last year's same period. The increase in capital expenditures compared to prior year occurred as the focus of our technology teams is now on new product development, whereas in prior year, it was significantly focused on carve-out and separation activities. Free cash flow improved to $68.7 million for the nine-month period ended September 30, up from negative $11.2 million in the prior-year period. It is important to remember that in addition to the onetime cash settlement of $45.3 million, the current period includes partial offsets of approximately $31 million of merger-related cash expenses recognized in the second quarter and a further $1.2 million in cash costs for the secondary offering completed in the third quarter. Turning to the balance sheet. Cash and cash equivalents were $88.8 million at September 30, 2019, compared to $25.6 million at December 31, 2018. Total debt outstanding net of cash was approximately $1.254 billion at September 30, 2019, compared to $2 billion at December 31, 2018. The reduction in total debt through the first nine months of 2019 is approximately $750 million. Consequently, our net leverage ratio at September 30, 2019, was 3.9 times compared with 6.4 times at December 31, 2018. Pro forma for our debt refinancing, which was completed on October 31, 2019, total debt outstanding net of cash is $1.5 billion, which includes $200 million to fund the settlement of the TRA obligation. Accordingly, our net leverage is 4.6 times on a pro forma basis. The refinancing lowers our weighted average cost of debt to 4.7% from 6.2% and extends our maturity profile for seven years. In addition, we anticipate interest expense savings of approximately $18 million per year. With respect to our reorganization and operational efficiency program, we expect to achieve the following: approximately $70 million to $75 million of annualized run rate cash cost savings exiting 2020, of which we expect to realize close to 60% of those savings or $40 million to $45 million of cash savings in calendar year 2020. From an OpEx viewpoint, we expect the impact from the program on adjusted EBITDA to be approximately $60 million to $65 million of annualized cost savings exiting 2020, of which we expect to realize approximately $35 million to $40 million in calendar year 2020. The difference between cash and OpEx savings is primarily due to converting and transferring outside contractor work, which we capitalized to full-time internal colleagues. The net effect is that cash savings will be greater than the OpEx savings. Expected associated onetime costs to implement the program are estimated at $60 million, the majority of which will be incurred in 2019 and 2020, the remainder will be realized in 2021. Jerre covered our outlook for 2019, which remains unchanged. Adjusted revenues in the range of $962 million to $995 million; adjusted EBITDA in a range of $290 million to $310 million and adjusted EBITDA margins of approximately 30%. And I'll remind you that earlier this year, the company provided lenders a required outlook for stand-alone adjusted EBITDA, and that outlook is similarly unchanged as well at between $325 million and $345 million. We'll provide our outlook for 2020 at the Investor Day next week. With that, I'll now turn the call back over to Jerre.

Great job, Richard. This wraps up our discussion for the third quarter. We look forward to sharing the many exciting opportunities ahead with you. We're now ready to take your questions. As a reminder, please limit yourself to one question and then return to the queue. Operator, let's open up.

[Operator Instructions] First question is from Andrew Nicholas with William Blair.

I just wanted to start with the MarkMonitor brand protection divestiture. Just hoping you could provide a little bit more detail on your rationale there. Maybe a little bit more detail on the business itself. And any other details you could provide in terms of like the size of the business, how fast it was growing and maybe anything we should think about in terms of its profitability.

So, that's a great question. We're going to give you a full - remember, we just announced this two hours ago. So we're going to give you a full review of that next week, but I'll give you a quick overview and then set it up for the future. If we were to exclude the parts that we're selling in Q3, what you would have seen with constant currency that we reported at 3.6% growth? It would have been 4.15%. So it's over 50 basis points. You'll see a similar profile from a profit standpoint. So we'll give you guidance for 2020, excluding those pieces that we've sold. There are a couple of other things. As I said and if you read the press release, we think this business under the new ownership, where they're very focused on that, those opportunities will really flourish in the future and be a great home for our people. If you think more importantly, though, what it allows us to do with IP, those pieces we've sold don't directly partner with the business, which we're in. Do you want to add anything to that, Richard?

No, I think that's right. We're delighted with the divestiture. We will complete the - expect to complete the transaction at the end of December 2019. And as Jerre said, I think that the company we're partnering with, OpSec Security, is going to be a terrific home for those product lines and our colleagues.

And as I said, we'll give you the full 2020 guidance next week. And in there, with that, we'll exclude the parts that we're selling. I would remind everybody on the call that actually back on January 14, we said that we would exit 2020 at 4% to 6% organic growth and 35% to 38% EBITDA margins. You can bet if you just look at this piece that we're going to be able to do that. We'll do two things next week. We'll show you how that works and then also give you the full 2020 because what Richard did a great job of was describing how the cost reductions that are very significant. As we said, there's $70 million to $75 million. Very proud of the team for the work they've done, how that impacts 2020 and how it will impact the entire company. So I would just close on this question. It's a great one. I actually had my 40th anniversary, October 3, of leading public companies. This would be in the top 1 or 2, maybe three quarters that I've ever reported. I've never been prouder of what we've done on a financial side, equally and critically important is all the changes we're making, including the shift with MarkMonitor. Thanks for the question.

The next question is from Zach Cummins with B. Riley FBR.

So Jerre, can you just provide a little more detail on your work with BCG. I mean can you talk about some of the areas that you discovered or potentially uncovered that were not there prior to your work with the merger with Churchill Capital and kind of how you get to that $70 million to $75 million in annualized cash savings?

Yes. No, great question. Thanks. Just for background, I've used BCG to do the same thing with six of the companies I've led over the years. This time, we were extra blessed because the team that we used when we did the IHS merger with market was the same team that we had here. We - they started June 10, wrapped up actually at the end of September, right on target. The big pieces, and we'll give you more views of that as we go forward. There's three critical big pieces that we're operating with. It's what I said, we'd streamline, flatten out the organization significantly, which you're now seeing under way. Secondly is that you'll see location wise, we'll be going from 60 locations to approximately 30 or less. And that, again, will play out during 2020. And then as we bring the contractors, which was a large number of people in, we'll enjoy the benefits not only of significant cost reduction, we'll enjoy the benefits of - with Randy Harvey's team much more efficient, new product introduction and we're excited about that. I would say, it's a great question. Just as a reminder to everybody, I had a handshake to acquire this business in 2012. So I had a very good view of what I expected, and I was blessed to have people like [indiscernible] of Randy's team, helping us now, actually help and all I do is try to stay out of their way. I would say, there was actually no surprises with two exceptions: the ability to grow this business was even better than I expected. I'll make a quick comment. I talked a little bit about it. But I've always done colleague engagement and then customer delight. We just finished our second customer delight review what we sent out over 800,000 users. We did one in June and one that finished in October. What was a great surprise for me. It's the highest scores I've ever seen customers give for the value they place on the company and on the products. I mean remarkable, just to put it in perspective, way back when we started at IHS, we were at 48. When I stepped down, we were at 82, and they've continued to improve since then, as I know they will. We actually scored on that piece, the piece I'm talking about, the value of the customer space, we scored at 87 here. I've never seen it nor has the team that we used to do the survey has seen it. So that's the great news. And then two other very key points that were reinforced by the BCG team. One is we scored the worst I've ever seen or the lowest on easy to do business with, and that's why you're going to see us doing all the things, including setting up three centers of excellence, including having inside sales in each of those centers, just a lot of things that will come into the future. And a lot of work that's already gone on, that you'll see next week with the user interface with our products. Those two were loud and clear coming back as feedback from the customers of must do, and we'll fix those. The last thing it was so interesting, we received over 60% of the participants wrote in. Those two questions, what should Clarivate keep doing and what should Clarivate do better? It was very clear to me and exciting that there was less than 3% of the total write-ins that talked about price. Just to give you a perspective on that. It was 18% to 20% at IHS. So that tells me not only our products value, we have a lot of room as we move forward to do pricing and that's just the great feeling. And BCG did a great job to make that happen. Thanks for the question.

[Operator Instructions] Next question is from Peter Christiansen with Citi.

Jerre, can you give us a sense of - I know as the business exited Thomson Reuters, there was a lot of discounted pricing that was used on longer-term contracts. When do we start lapping that and realizing a more normalized pricing environment across your business lines?

Actually, that's a great question. I'll start, Richard will pick it up. Actually, by the end of this year, that's all behind us. Just remember, it's now our third anniversary of acquiring - our Onex acquiring and then CCC and Onex together Clarivate. And so - and with a great job done this year by being out of the carve-out by the end of March, so just to put that in perspective, it's three years and those long-term agreements all expired this year, three years. One of the things Richard mentioned this morning was that we enjoy - a lot of that was the renewals of those agreements that we enjoyed in Q1 and Q2. Pick up, though, Richard, because it's a great question.

Yes. I mean just in terms of pricing yield, as we've covered previously, the yield in 2019 will be approximately 2.1%. That's the yield we enjoy. And the yields we get across the product group does vary. We find that the Web of Science platform, for example, attracts the highest yields in terms of price relative to the rest of the portfolio. Through the pricing work we've done this year, we are targeting price yields in 2020 of north of 3.6% - 3.3%. So 3.1%, 3.2% is our target for 2020. In terms of multiyear contracts and multiyear contracts unwinding, we do have that. Most of our multiyear agreements are with large university consortiums, and we enjoy those relationships. We like multiyear agreements, but what we do require our pricing escalators built into the multiyear agreements. So it's a three-year agreement, the five-year agreement. We actually have just completed a seven-year multiyear contract within our IP product group, which is terrific. And again, we ensure that there's pricing escalators on an annual basis each year.

Each year.

Each year in those contracts.

That's as good as it gets. And it's a great example. The other thing I'd just add to this. We also learned, and we did learn this with some of the work BCG did for us. We have a disparity with a lot of our product pricing. Just as a reminder, on a historical basis, there was less-than-tight governance on pricing. When Richard arrived that change, which is 2.5 years ago, but what we've now seen as we've done an analysis with our internal pricing team, our 500 largest customers, which we'll talk about next week. What we've now seen there is same product, same amount of users, significant price realization difference. Because of the way the system work, you could as a salesperson, discount 10%, 12%, get the annual subscription base and actually be a full quota for commission. That's long gone behind us. But what that does mean is, we've got a big job in the next - this is probably a three-year project. My view, to get equitable pricing across the board so that's one that we've not built in, but we'll get that as we go forward. Great question, thank you.

This concludes our question-and-answer session. I would like to turn the conference back over to Jerre Stead for any closing remarks.

Again, thank you all very much for the time. We look forward to - I hope seeing many of you next week. As I said, this would be in the top two or three quarters I've ever done and it feels good. There's a lot done. But hang tight, as I've said to our team, hang on to your lower red hat because we're just getting started. Thank you.

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