Copa Holdings, S.A. (CPA) Q2 2018 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by. Welcome to the Copa Holdings Second Quarter Earnings Call. During the presentation all participants will be in a listen-only mode. Afterwards we'll conduct a question-and-answer session. [Operator Instructions] As a reminder, this call is being webcast and recorded on August 9, 2018. Now I'll turn the conference call over to Raul Pascual, Director of Investor Relations. Sir, you may begin.

Thank you very much, Sarah, and welcome everyone to our second quarter earnings call. Joining us today are Pedro Heilbron, CEO of Copa Holdings; and Jose Montero, our CFO. First, Pedro will start with our first quarter highlights, followed by Jose, who will discuss our financial results. Immediately after, we'll open up the call for questions from analysts. Copa Holdings financial reports have been prepared in accordance with International Financial Reporting Standards. In today's call, we will discuss non-IFRS financial measures. A reconciliation of the non-IFRS to IFRS financial measures can be found in our earnings release, which have been posted on the company's website, copa.com. In addition, our discussion will contain certain forward-looking statements not limited to historical facts that reflect the company's current beliefs, expectations and intentions regarding future events and results. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially and are based on assumptions that are subject to change. Many of these risks and uncertainties are discussed in our annual report filed with the SEC. Now I'd like to turn the call over to our CEO, Mr. Pedro Heilbron.

Thank you, Raul. Good morning to all and thank you for participating in our second quarter earnings call. First of all, I want to congratulate all of our coworkers for their efforts during the quarter. Their ongoing dedication and commitment keeps us at the forefront of Latin American aviation. The second quarter presented us with several challenges, especially in the commercial front. We faced the sudden cancellation of close to 900 flights to Venezuela, of which about half were eventually reinstated, and weakening currency in the region, mainly in Brazil and Argentina. In addition, a year-over-year increase of 33% in our effective fuel price put significant pressure on unit costs and resulted in a year-over-year reduction in margins. We still firmly believe that higher oil prices should translate into stronger Latin American economy, and eventually higher yield to offset the additional fuel extent. But this effect is not immediate and has been happened yet. Among the main highlights for the quarter, passenger traffic grew up solid 13% year-over-year outpacing our capacity growth of 11.2%. This resulted in a strong 83.5% load factor, 1.3% percentage points higher year-over-year. Yields came in at $11.4 or 2.2% lower than in the second quarter of 2017. Unit revenues or RASM, decreased 0.6% year-over-year to $9.8. On the cost side CASM came in at $0.09, 4.8% higher year-over-year due to higher fuel expenses. However, a fuel unit cost came in at $0.06 or 5.1% lower year-over-year due to the timing of certain events and cost reduction efforts. Our operating margin came in at 9%, 4.7 percentage points lower than the second quarter of 2017. On the operational front, Copa earnings delivered an on-time performance of 89.9% and a completion factor of 99.8%, again among the best in the world. Turning now to the rest of 2018. Bookings continue to come in relatively strong in most of the network. However, Europe softness, particularly in Brazil and Argentina is preventing us from achieving the unit revenue growth needed to offset the additional fuel expense. As such, we are building our guidance for the year to reflect lower unit revenues and a higher fuel expense. We're also moderating our capacity growth by being even more aggressive in our low-season cancellations and making capacity adjustments in some of the most affected markets. As always, Jose will share all the details on the updated guidance and assumptions for the rest of the year. Regarding Brazil and Argentina, during the second quarter, these two markets paid year-over-year currency evaluations of 15% and 43% respectively. And even though there has been some moderation by the industry, international capacity in those markets remained higher than in 2017. We have also been adding new destinations in these countries. And while this has been planned for a long time and will most likely end up being great additions to the network, the timing is not optimal. All these factors made to an adverse revenue environment, which will also be reflected in the third quarter results. We have seen in the past, how higher oil prices benefit the Latin American economy and eventually lead to a better yield environment in the region. But we're not sitting idly, waiting for that to happen. As you have seen in our results, our unit costs are at lowest ever and we will continue looking for efficiencies and saving opportunities. Furthermore, during the next few years as the MAX aircraft becomes an important portion of our fleet, we should start seeing additional benefits to our cost structure especially we remain in a high fuel price environment. We continue to make progress in our ancillary revenue and loyalty program efforts, including the selling of miles, upgrades, seat assignments and second bag fees in selected markets. We also have technology initiatives in the pipeline that we expect will enhance and accelerate our ancillary revenue performance. In summary, we continue working to strengthen our business model and further our ability to produce premium margins regardless of where the fuel price might be. Turning now to our fleet. We already received our last two 737-800s, one in January and one in April, and have returned one Embraer-190, upon its lease expiration in March. In the second half of the year, we expect to receive five 737 MAX 9s, and end the year with a consolidated fleet of 106 aircraft. We’re looking forward to the arrival of our first MAX 9 later this month, which will delivered both revenue opportunities and cost efficiencies. In regards to our network, in July, we started three new flights, Fortaleza and Salvador, our 8th and 9th destinations in Brazil, and Bridgetown, Barbados, our 16th destination in the Caribbean. We also announced two new destinations for the end of the year, Puerto Vallarta in Mexico and Salta in Argentina, both starting in December. After these additions, Copa will provide service to 80 destinations in 32 countries, in North, Central, South America and the Caribbean. By far the most complete and efficient network for intra-Latin America travel. As a testament to our customer loyalty and satisfaction, last month, we were once again awarded Best Airline, and Best Airline Staff in our region by the Skytrax World Airline Awards. We're incredibly proud with the efforts that are more than 9,000 coworkers put in day after day to places among the best Airlines in the world. Finally, during the significant interest from investor community, we are confirming today that we have been actively participating in discussions with United and Avianca about the possibility of forming a joint business agreement that will cover our combined networks between the U.S. and Latin America. These details are still being discussed, and have not been finalized, so we don’t have a specific announcement to make. If and when we complete an agreement, we will provide much more details. Until then we don’t expect to share any further information. To summarize, we expect lower unit revenues for the year, especially in the third quarter, based mostly on yields softness in Brazil and Argentina. We are moderating our growth to accommodate the softer market conditions. Our team continues to deliver world-class operational results, including one of the world's highest on-time performance. We continue delivering efficiencies and savings, which have further lowered our industry leading the unit costs. We also continue focusing on revenue opportunities, including ancillary initiatives that are aimed at strengthening our resource. Lastly, despite the current challenges, which we believe could be temporary, we’re confident of favoring our business model and our financial strength. We have the most complete network for travel within the America and extremely flexible fleet plan, the lowest unit costs, a very strong liquidity position with low leverage and a highly committed team making us the best positioned to consistently deliver industry leading results. Now, I’ll turn it over Jose, who will go over our financial results in more detail.

Thank you, Pedro, good morning, everyone, and thanks for joining us. Let me begin by joining Pedro, in congratulating our entire team for all their achievements through what was a challenging quarter. During the second quarter, we grew capacity by 11.2% year-over-year, while revenue passenger miles increased 13% year-over-year, which resulted in a consolidated load factor of 83%, a 1.3 percentage point increase versus Q2 2017. However, passenger yields came in 2.2% below last year. This year-over-year decline was mostly driven by the weakness in the Brazilian real and Argentine peso as well as the cancellation of our flights to Venezuela during most of the quarter. During Q2 2017, our RASM was $9.9, and in Q2 2018, it came in at $9.8. Consolidate revenues increased 10.5% year-over-year to over $634 million. On the expense side, our second quarter operating expenses increased 16.6% year-over-year on the 11.2% capacity growth, which resulted in our cost per available seat mile, increasing 4.8% to $0.09, specifically as a function of higher jet fuel prices. For the quarter, our effective oil and fuel price averaged $2.35 per gallon, an increase of almost 33% versus the $1.07 per gallon that we averaged in Q2 2017. Our total fuel expense for the quarter was $61.6 million, above Q2 2017, of which $47.4 million are related to a fuel price increase. However, we were able to offset some of these increase with our continued saving initiatives, specifically our cost per available seat mile, excluding fuel, ex-fuel CASM, came in at 5.1% low year-over-year, coming down from $6.3 in Q2 2017 to $0.06 in Q2 2018. Consolidated operating earnings for the quarter came in 27% lower at $57.1 million, resulting in operating margin of 9%, 4.7 percentage points lower than the 13.7% generated in Q2 2017. Looking at non-operating income and expense, the second quarter generated a net non-operating income of $162,000. In terms of net results, net earnings for the quarter came in at $49.9 million, earnings per share of $1.18, 15% lower than the earnings per share reported in Q2 2017. Turning to the balance sheet, we closed the quarter with the very strong financial position. Assets totaled $4.4 billion, owner's equity totaled $2.2 billion, debt plus capitalized leases totaled approximately $2 billion and our adjusted net debt-to-EBITDA came in at a very strong 1.3x, by far the lowest in our peer group and one of the best in the industry. We closed the quarter with approximately $1.2 billion in debt, more than 60% of which is fixed with a blended rate including fixed and floating rate debt of approximately 3.3%. In regards to cash, short and long-term investments, we closed the quarter with approximately $1 billion. Our cash balance at the end of the quarter represents approximately 38% of last 12 months revenues. In terms of fleet, as we mentioned during our last earnings call, we took delivery of our last Boeing 737-800 during Q2 2018. Ending the quarter with the 101 aircraft, 82 Boeing 737s and 19 Embraer-190s. For the rest of 2018, we expect to receive our first Boeing 737 MAX 9 later in the month of August, fall by four more MAX 9 deliveries during the latter part of the year. We expect to end the year with a total of 106 aircraft. It is important to know that we have already secured the financing for all the aircraft we will take delivery of in 2018. Finally, I'm pleased to announce that our Board of Directors as ratified the third quarterly dividend of $0.87 per share to be paid on September 14 to all shareholders of record as of August 31. So to recap, the second quarter performance was affected by the weakness in some of the currencies in the region as well as the increase in the price of jet fuel. During the month of April, we also faced the suspension of our flights to and from Venezuela. However, we continue to deliver industry leading unit costs and we continue pursuing our cost savings initiatives. Our network continues being the most convenient for travel within the Americas with world-class operational indicators. We have one of the strongest balance sheets in the industry and we continue to return value to our shareholders. Today, we’re also updating our guidance for 2018 based on our operating plan and expectations for the year. We’re lowering our capacity growth in terms of ASMs to approximately 8%, driven by the capacity adjustments we’re making during the second half of the year. And given to continued softness in the yield environment, which we are seeing into the third quarter, mainly driven by the weaknesses in currencies in Brazil and Argentina as well as the current expectation for fuel prices, we now expect our operating margin to be in the range of 14% to 16%. Our 2018 full year guidance is based on these following assumptions; low factor of approximately 84%, RASM of approximately $0.107, CASM ex-feel of approximately $0.062 and higher effective fuel price per gallon including into-plane of approximately $2.30. Thank you. And with that, we’ll open the call for some questions.

Thank you. [Operator Instructions] Our first question comes from the line of the Duane Pfennigwerth with Evercore ISI. Your line is now open.

This is actually Ray on for Duane. Earlier you mentioned lower unit revenues, especially in 3Q. Should we expect a larger year-over-year decline than 2Q is 0.6% or should we expect some kind of modest sequential year-over-year improvement?

I think for the third quarter what we’re seeing is a decline, I think I want to say in the low-single-digits for the third quarter, mostly based yields. And so it’s basically -- they’re actually, yes, it’s been very, very low-single-digit decline for the third quarter. And then for the fourth quarter, we are seeing, again, it’s too early to tell, but it’s more flattish on a year-over-year basis.

And how much of the lower RASM guide you attribute to competitor capacity and what levels do you see from 3Q to 2Q? And if you have it, can you break that up between Argentina and Brazil?

I think that the majority of the RASM trend that we’re seeing is related to the weakness in Argentina and Brazil. So that’s basically the big driver that we’re seeing. From the standpoint of competitive moves, there’re some movements in certain parts of the network, there are some movements into the Caribbean and between kind of the Northern parts of South America to Central America. But that’s less significant. I think that actual weakness in the currencies in Brazil and Argentina, which is the main driver for the RASM guide that we have.

What I should add Pedro here is that seats from our earnings out of Argentina and Brazil for the first half of the year, we're in the mid to high-teens, and in the second half the year, we see them in the mid-single digits. So the capacity growth year-over-year will be much lower in the second half of the year than what we've experienced so far.

Thank you. Our next question comes from the line of Michael Linenberg with Deutsche Bank. Your line is now open.

Hey guys, this is Chris speaking for Mike. Just wanted to ask a question about the change in the capacity growth forecast from 9% to 8% this year, where are you seeing some of those reductions in new capacity? Is that into Brazil and Argentina? I know you mentioned you are still opening new routes and markets into those areas. So just wanted to get an understanding of where some of those shifts are happening.

Right, so -- this is Pedro Heilbron. It's going to be mostly low season reductions, so starting in September all the way through November -- end of November, low season reductions; number one, and we are adjusting capacity a little bit more aggressively, mostly in Brazil, reducing frequencies in multiple frequency destinations, more than anything.

And then how are you seeing some of the -- with respect to the revenue environment, what is the transitioning into Brazil and Argentina this quarter with respect to some of the recovery and demand? If you're seeing that, is more leisure and [indiscernible] -driven? Is that business driven? How should we think about that?

I'd say it's a little bit of both from the standpoint of the third quarter. What we're seeing so far is -- there is a year-over-year drop in I want to say in the low-teens in both markets. Now having said that, in the case of Brazil, I think, the drop in RASM is mostly driven by the macro-environment. And even though there is a significant drop in the currency in Argentina, there is also, I think a bigger set of seats available in Argentina as well. So that's kind of how we're seeing it into the third quarter. It's in the low-teens for both markets.

Right. And I should add to that, in the case of Argentina, we've grown our own capacity in ASMs over 40% this year. So the way we're partly at fault, but that coincided with the currency devaluation, we're not expecting that, but long-term those are important strategic additions, and the market is still a healthy market. So we're just kind of a perfect storm that we grew a lot this year. It had been like eight years since we were able to get additional route right. It took us a long time. So we got them now. We grew a lot of our capacity and then the currency devaluation here, but medium to long-term those are all, I think great additions and we are not regretting anything. In the case of Brazil, we've grown a much less this year. We added most of the Brazilian capacity we had caught before, we added that last year. But other airlines have added much more capacity this year. So that coincide was a weakening currency, which had, however stabilized and even strengthened a little bit. So even though the third quarter in terms of unit revenues in Brazil, at least for us, doesn’t look great. We’re expecting it to get much better for the fourth quarter.

Thank you. Our next question comes from the line of Hunter Keay with Wolfe Research. Your line is now open.

How much of the better CASM-ex guidance is FX-driven versus some of those cost reduction initiatives that you've referenced?

Yes, Hunter, this is Jose here. I think that the majority of CASM guidance is -- or the CASM improvement and the performance that we had in the quarter was savings, and there is some timing involved as well. I’d say that most of our costs are actually in U.S. dollars, the vast majority of our costs are in U.S. dollars. So it is really both. In the case of the second quarter, there is sometime hinder, but in terms of full year there is a lot of savings initiatives that we’re being doing in terms of contract renegotiations, distribution initiatives, maintenance et cetera. So there’s quite a bit in there that we've been focusing on over the last couple of years.

Hunter, I’ll say it in other words, there's no FX advantage, no FX benefit in those numbers.

So the 6.3 to 6.2, that’s core, that’s pure, that’s repeatable, there is no FX around those. Okay, good. And then as I think about some of the commentary you guys have made before on 2019 being high single digits or maybe even low double-digits, I know its early, but as you think about the capacity curve, you just made in the back half, is it fair to assume that low double-digits is probably off the table for 2019 and we should think about maybe mid to high single digit growth rate?

Yes.

That’s a fair assessment.

Thank you. Our next question comes from the line of Helane Becker with Cowen. Your line is now open.

It's actually Connor Cunningham in for Helane. Just a little bit more on the expected improvement in 4Q from 3Q. Is your assumption that the yield environment kind of flattens out after the Brazilian election? Or is it just strictly the capacity just to say you’re making that gives you confidence that you're going to see sequential improvement?

Yes, Connor. There are a couple of items there, of course, we are tempering down the ASMs that we’re putting out into the market, and especially that’s going to be the case in the fourth quarter. But also what we are seeing is that, there as we -- for now we are not seeing any major expectations for major changes in currencies. I think that given that we are seeing that the yield environment should flatten out as well for the fourth quarter. So it’s a little bit of both which is involved in there.

Okay. And then just a little bit on the rest of the network, so just, excluding Brazil and Argentina. Is it fair to assume that the rest of the market is actually -- rest of -- now work is actually performing quite well? And there is nothing bleeding from Argentina and Brazil into those markets at all at this point?

No, our network is vast. I meant it's going to be, by the end of the year, 80 destinations in 32 countries. So we think about the rest. They are all net - it's all net-net positive. And some might be maybe slightly weaker than others, but the majority is doing very well.

Okay. And then just a follow-up on the 2019 capacity comment. What's your expectation around where you're going to end in terms of fleet count? And has that changed given the items in Brazil and Argentina, like are you expecting to return more aircraft than you did before or maybe just any comments there that would be great. Thanks again.

Yes, I think that our planned costs for, again, first of all, I have to say that we have a very flexible fleet plan. So we still have some embedded flexibility into a 2019 capacity figure, but for now, our planned costs for a growth over on four planes for next year. We have flexibility, we have lease expirations next year so on.

Thank you. Our next question comes from the line of Savanthi Syth with Raymond James. Your line is now open.

I just wanted to follow-up a couple of questions and make sure I understand. So Brazil and Argentina kind of both RASAM down kind of low teens in the third quarter, is that what you were saying?

Yes.

So if I look at that and I think there, about 25% of your market, does that mean the rest of your network has been stable? Is the -- if you're kind of expecting low single-digit type declines for the third quarter than the rest of the markets are maybe flat to slightly up, is that fair?

That is fair assessment Savanthi.

Okay, great. And then just, on the kind of Venezuela items, was that all in the $15 million impact? Is that all revenue in 2Q that we can expect to get reverse next year?

Yes. There's actually revenue figure was a little higher. There's also some cost savings associated with non-operating to flights. But so, yes, the $50 million figure is a P&L figure more -- may impact earnings.

And two, maybe last question, just one. I wonder if you can elaborate on some of the ancillary revenue initiatives that you've mentioned briefly to kind of drive higher ancillary and then also just a quick update on Wingo?

Okay. So, yes, we've implemented a number of ancillary initiatives without having or without waiting for the right technology. The enhancements for CSS system are one year delayed. We started -- we're going to have them by the end of 2017, and we're going to now have them by the end of this year, by October of this year, and now we're in the final stretch. So we're very confident that all the enhancements to our CCS are going to in place by October this year. But that's later, and we couldn't wait so long. So we have implemented ancillary or initiatives such as selling a premium fees such as second bag charges in certain markets and other initiatives. Those would run again without all these technology enhancements. We feel that by next year with our new systems or enhanced systems, we're going to be able to perform much better, maybe even, increased by 50% or more in what we're doing. In previous calls and investor days, we had said that by the end of 2018, adding 2017 and 2018 together, we would be at $30 million in ancillary revenues, and I would say we’re going to be there by the end of this year. And there is that potential to increase that number again by 50% or more percent in the run rate next year with the technology enhancements. In terms of Wingo, to answer your Wingo question, we’re very happy with Wingo. Wingo’s first objective was to turn a money losing network out of Columbia into a much better network. And what I should say that even though we do not split Wingo numbers, we think that we’re right on track to deliver either breakeven or actually maybe positive numbers or positive contribution for Wingo in 2018.

Our next question comes from the line of Dan McKenzie with Buckingham Research. Your line is now open.

Few questions here. First one is really housekeeping. I’m just wondering to what extent the truckers strike in Brazil or the World Cup impacted revenue in the second quarter?

So well, the World Cup is probably going to affect mostly third quarter. And we’re pretty sure that there was an impact, but was like impossible to make sure. So we will never really know what where the impact. But there will be an impact in the third quarter due to all those people that spend their money in Russia and not in the Caribbean or the U.S., including many Panamanian, I should say. So but it’s very difficult to measure. And in terms of the truckers' strike, it did lead to a number of cancellations, but obviously the impact was much less than to our carrier line domestically in Brazil. So I will not say that it was significant.

I see. Okay. And just -- not to kick a dead horse here, but a couple of -- probably just following up on a couple of the prior questions, just looking at Brazil and Argentina. I’m just wondering if you give more clarity around what the operating margins story would look like for this year. So the rest of the network trending at 16% to 18% margins in just these two countries that bring us down or just -- or maybe if you could just provide a little bit more perspective along those lines? Yes, maybe how does the weakness breakout between business and leisure travel for example? And so just kind of talk about the more -- the impact more to the core business and kind of where you’re seeing that weakness specifically?

Right, we never break down operating revenues by region or country. But the yield weakness and yield softness is year-over-year, of course, comparing year-over-year, it’s in Brazil and Argentina. That doesn’t mean that the operating margins in those places are driving the whole number much lower. This is all year-over-year comparisons. So the weakness year-over-year in yield is in those two markets. In the other markets were either flat or up in terms of unit revenue when we add them all together. So I would say that there are no other markets or regions that are a worry to us right now. And obviously the big issue is that we’re not being able to cover for the increased fuel price. Thefuel was at the same where it was 12 months ago. We would be doing extremely well in terms of operating margin. So the disconnect if we're not being able right not to price in the fuel increase. Only in the second quarter, we paid over $47 million only in price in additional fuel price over a year ago.

And then I guess if you could maybe just comment a little bit about the breakup between business and leisure travel? Is that the fall off for leisure travel for Brazil and Argentina? Or is it -- have you seen a real downtick in the corporate business? And I guess the reason I'm kind of getting at that is it seems like the corporate business seems intact from what we're hearing from other carriers this morning, but just wondering maybe you can provide a little bit more granularity around that side of the business?

We haven't really seen a significant change in the makeup. As the matter of fact the traffic is still there as you see from our low traffic figures. So it's mostly a huge issue based on the currency.

Thank you. Our next question comes from the line of Joseph DeNardi with Stifel. Your line is open.

I'm going to try and ask the second half rather than question like the 37 in a different way. If you get the flat RASM in the back half of the year, that would represent a pretty big divergence between year-over-year RASM and FX, which you guys haven't really seen over the past two years. So is there anything that we should keep in mind that would support that type of divergence or do you really need to see an improvement in FX to get back to positive in fourth quarter.

Right. So we have seen a slight improvement lately in FX. And we're expecting FX to be stable for the rest of the year. I would say that kind of embedded in our forecast is that FX is going to be stable for the rest of the year. And what we need to keep in mind is that usually when fuel prices were so high, currencies in Latin America tends to strengthen. That hasn't happen this year. But we could expect currencies to be more stable than they were in the last two months.

And then a couple of years ago at the Investor Day, you guys did down there, you quantified what the EBIT contribution you're expecting or the margin contribution you're expecting from your loyalty program. You just talked about kind of ancillary contribution that you're seeing. What is the loyalty program contributing to EBIT this year? And then how does that start to ramp up a little bit more next year? Thank you.

Okay. So now that you've mentioned the Investor Day conference few years ago. So we're going to have our next one on September 20 in New York City. And I'm sure there is going to be a lot of interesting information. We will have other top BPs there especially commercial, sharing all of this. But I'll let Jose to add.

In terms of, Joe, in terms of the loyalty question, the contribution that we're seeing right now is at around one percentage point to EBIT, from the loyalty program. And so yes, there is some lead as that point continued to growing for that to accrete over the next couple of years.

Thank you. Our last question comes from the line Marcos Barreto with Citi. Your line is now open.

First of all, do you see any potential anti-trust push back from the alliance that you've mentioned earlier, specifically with the South American counterparty?

Yes, we’ll - you know, as we said in the opening remarks, we’re not going to share more information on that. There are still -- the agreement has not been finalize yet. Once it's finalized we will have to go through all the legal hurdles that an agreement like this has to go through

In the different countries.

In the different countries. So I would rather not to speculate right now.

Second, has the guidance adjustments led to - led you to rethink your strategy on synthetic fuel hedging.

No, actually, I think on the long-term, I think that our current strategy, which is not hedging is the right strategy. So we’re going to - we have no plans to tell you.

And last, looking at the strong operational cash flow, was there some strategic adjustments in your working capital strategy?

No real from the working capital strategy, no real strategic change. But again from the overall perspective of cash flow and our cash position, the Board has always been returning value to the shareholders via the dividend or buyback program. So that's something that’s really is something that the company has been doing actively over the last many years.

Thank you. And that concludes the question-and-answer session. I would now like to turn the call back to Pedro Heilbron for any further remarks.

Okay, thank you all. This concludes our earnings call. I’d like to take this opportunity, as I mentioned a minute ago, to announce that we’ll have our 2018 Investor Day on September 20 in New York City. And you should be getting an invitation and other details in the next couple of weeks. So thank you for being with us in this call. And as always, thank you for your continuous support. Have a great day.

Ladies and gentlemen, thank you for participating. That concludes the presentation. You may all disconnect. Everyone have a great day.