Energizer Holdings, Inc. (ENR) Q2 2024 Earnings Report, Transcript and Summary

Good morning. My name is Ludy, and I'll be your conference operator today. At this time, I would like to welcome everyone to Energizer's Second Quarter Fiscal Year 2024 Conference Call. [Operator Instructions] As a reminder, this call is being recorded. I would now like to turn the conference over to Jon Poldan, Vice President, Treasurer and Investor Relations. You may begin your conference.

Good morning, and welcome to Energizer's Second Quarter Fiscal 2024 Conference Call. Joining me today are Mark LaVigne, President and Chief Executive Officer; and John Drabik, Executive Vice President and Chief Financial Officer. A replay of this call will be available on the Investor Relations section of our website, energizerholdings.com. In addition, a slide deck providing detailed financial results for the quarter is also posted on our website. During the call, we will make forward-looking statements about the company's future business and financial performance, among other matters. These statements are based on management's current expectations and are subject to risks and uncertainties, which may cause actual results to differ materially from these statements. We do not undertake to update these forward-looking statements. Other factors that could cause actual results to differ materially from these statements are included in reports we file with the SEC. We also refer in our presentation to non-GAAP financial measures. A reconciliation of non-GAAP financial measures to comparable GAAP measures as shown in our press release issued earlier today, which is available on our website. Information concerning our categories and estimated market share discussed on this call relates to the categories where we compete and is based on Energizer's internal data, data from industry analysis and estimates we believe to be reasonable. The battery category information includes both brick-and-mortar and e-commerce retail sales. Unless otherwise noted, all comments regarding the quarter and year pertain to Energizer's fiscal year and all comparisons to prior year relate to the same period in fiscal 2023. With that, I would like to turn the call over to Mark.

Good morning, and welcome to our second quarter earnings call. While we are pleased to report on a solid second quarter, we are even more excited to discuss what's ahead. More on that in a moment as we will start with Q2. We once again made great progress on our priorities for the year: margin improvement, free cash flow generation and debt paydown. Our top line benefited from our continued recovery in the battery category and another strong performance in auto which, along with significant improvement in gross margin, drove 13% adjusted earnings growth in the quarter. Strong free cash flow generation year-to-date has enabled us to pay down over $60 million of debt in the quarter as against these priorities has reduced our leverage, which we expect to be below 5x by year-end and fueled our growth initiatives, which will help deliver top line growth in the back half of the year. Let's review the current state of the businesses starting with batteries. Battery organic net sales were down roughly 4% in the quarter. The decline was consistent with our expectations with improving trends from the prior quarter primarily driven by improving category dynamics and distribution gains. Looking at the category. Global Battery volume and value both showed growth in the latest 3-month data. Importantly, Global Battery volume grew nearly 3.5% during that period. This represents a significant improvement from the prior year, where volume was down 5.5% in the comparable period. U.S. category volume increased 2.8% in the latest 13 weeks. In addition to the healthy trends we are seeing in measured channels and online, we have also seen improving trends in nontracked channels as we lap softness, which began in the spring of last year. Our performance within the category remains strong. Consumers are selecting our brands, driving a value share gain in the U.S. in the quarter. Private label value and volume share declined globally in the quarter. And while private label is growing across many consumer categories in the U.S., we have seen battery private label value share declines in each of the last 3 quarters. Within our Battery business, we have maintained a prudent approach to pricing and promotion ensuring that we engage with consumers and drive demand while improving overall gross margins. That discipline will continue as we leverage the strength we have reestablished in our P&L to drive future growth with ongoing margin improvement. As we look ahead, our improved margins, the inflection in category volume, the strength of our brands and a stable pricing environment reinforce our confidence in returning to growth in the back half of the year. Turning to Auto Care, which is another bright spot in the quarter. Organic net sales increased over 2% following a 5% organic increase in the prior year quarter. Our appearance business had a particularly strong quarter, increasing nearly 9% organically year-over-year. The investments we are making are working. Exciting innovation and increased investment to connect with consumers are driving much improved business performance. In the second quarter, segment profit expanded by nearly 600 basis points. We have returned the Auto Care business back to pre-pandemic profitability and expect further improvement going forward. The day-to-day execution by the teams has been outstanding particularly when you take into account the progress also being made on Project Momentum. The program generated $20 million in savings in the quarter, taking total program savings in nearly $100 million to date serving as a key factor in margin expansion and earnings growth in the quarter. We launched Project Momentum over 18 months ago to restore the health of our P&L. And thus far, it has exceeded the ambitious goals we set at the time. Even more encouraging, we have uncovered opportunities for additional savings. We now have both of our categories returning to pre-pandemic levels of profitability with line of sight for ongoing improvement this year and next providing us the flexibility to invest for future growth. The organization has worked tirelessly to reach this inflection point, and we have the business poised for growth, all while remaining focused on continued margin improvement, free cash flow generation and debt reduction. Beginning next quarter, we expect to see the combined benefits of top line growth and further margin expansion with Q3 adjusted earnings expected to increase 20% year-over-year at the midpoint of our range. While the work around Project Momentum has been at the forefront of much of our presentations in the past, we have been working to reenergize what we do best, invest in innovation, build our brands and drive distribution gains across our categories around the world. Over the balance of the fiscal year, you will start to see the results of that effort. And as we approach FY '25, they should become even more additive. To provide some context around this confidence, let me break down the areas of focus. First, we have discussed our investments in e-commerce capabilities many times in the past. And after assessing the current landscape and opportunities, we have made additional significant financial and organizational investments to ensure we capture the growth available to us in each of our categories, not only in the U.S. but in many other markets around the world. Second, the investments we have made in our digital transformation provide much improved data and analytics to our pricing and revenue management teams, which allow them to read and react in a more dynamic way to capture opportunities and mitigate risk in mix management and strategic pricing. Third, improved visibility and distribution of our brands across major markets will drive top line growth in the back half of this year and beyond. Fourth, we believe that we have strategic market expansion opportunities in attractive international markets. By leveraging our distributor market group, we gather insights into markets which may initially be to subscale to warrant significant investment. Ultimately, we are able to identify certain markets, which we [Technical Difficulty] and allow us to accelerate growth further and faster. And fifth and finally, we have been investing in our innovation pipeline and partnership opportunities to deliver exciting new products which meet consumer and customer needs better than anyone else. The innovation pipeline in both Batteries and Auto Care is the strongest we have had in many years and we are excited to introduce many new and improved products to consumers over the next several years. These growth opportunities have been made possible by the tremendous work in restoring the margins in our business and now allow us to invest in a cycle of growth going forward. Having set the stage for what's ahead, let's take a step back and turn it over to John to talk about the progress made in the second quarter and provide some details around the balance of the year outlook.

Thanks, Mark, and good morning, everyone. I will provide a more detailed summary of the quarter, an update on Project Momentum and some additional color for our expectations for Q3 and the rest of fiscal '24. For the quarter, net sales were down 3% with organic revenue down 2.7%. Volume improvement and distribution gains contributed to organic growth of 0.6%, offset by planned strategic pricing and promotional investments of 3.3%. The results were in line with the outlook provided on our first quarter call of an organic decline of between 2% and 3%. Adjusted gross margin increased 260 basis points to 40.5%, driven by Project Momentum savings of approximately $11 million as well as lower input costs, including improved commodities pricing and lower ocean freight. These benefits were partially offset by the planned strategic pricing and promotional investments. Adjusted SG&A decreased $2.6 million, primarily driven by Project Momentum savings. A&P as a percentage of sales, was 3.2%, up from 2.7% in the prior year period and consistent with our focus on increasing investment behind our brands. Interest expense decreased $3.3 million as we continue to focus on reducing our average debt outstanding year-over-year, offset by higher average interest rates. Our strong operational performances in both Battery and Auto Care, along with significant margin recovery over the last year, resulted in adjusted EBITDA and adjusted earnings per share of $142.5 million and $0.72 representing a 13% increase in adjusted earnings year-over-year. Throughout the first 6 months of fiscal '24, we have generated $163 million of free cash flow or 11.8% of net sales. This is within our long-term algorithm of between 10% and 12%. Our strong free cash flow generation has allowed us to pay down $141 million of debt during the first 2 quarters. We have also paid off $425 million of debt in the previous 7 quarters and reduced our leverage by nearly a turn during that time. Our debt capital structure remains in great shape with a weighted average cost of debt of around 4.6% which is 96% fixed and with no meaningful maturities until 2027. As Mark noted in his comments, Project Momentum continues to be a driver of significant efficiencies and benefits for our organization. As we announced last quarter, we expect the 3-year program to drive savings of between $160 million and $180 million. This quarter, we saw savings of approximately $20 million taking total savings generated since the start of the program to $96 million. Lastly, I would like to provide some additional color for Q3 and the rest of the year. For Q3, we expect to return to growth on the top line with organic net sales up approximately 1%. We anticipate gross margin in the quarter to improve by roughly 150 basis points year-over-year, and adjusted earnings per share to be in the range of $0.62 to $0.68, up 20% at the midpoint. For the full fiscal year, we continue to expect Project Momentum savings of $55 million to $65 million. We expect to pay down between $150 million and $200 million of debt and if ends fiscal '24 below 5x net leverage. We are reaffirming our outlook for organic net sales to be flat to down low single digits. Adjusted gross margin improvement of over 100 basis points, adjusted EBITDA in the range of $600 million to $620 million and adjusted earnings per share of $3.10 to $3.30. With that, I will turn it over to Mark for closing remarks.

Thank you, John. To summarize, this organization deserves a lot of credit. We're delivering a long-term plan, which started with an incredible effort to restore margins and enable us to invest for growth. Having reached that point, we very look forward to delivering the return on those investments in the quarters ahead. With that, let's open the call for questions.

[Operator Instructions] And your first question comes from the line of Robert Ottenstein from Evercore.

Congratulations on the progress. Certainly hearing a lot of optimism on the Q3 and the second half of the year. I was wondering if you could just give us a little bit more details on your visibility into the third quarter? What's driving your confidence in terms of returning to growth? And maybe kind of put into perspective the role of promos, both in this quarter and how that impacts the second half?

Robert, I'll kick this off and then John can provide some color as well. We're really positive and optimistic about where we are in the year. We've -- over the last couple of years, we've really attacked the issues the right way with a long-term view in mind. We started with restoring stability in the supply chain. We then move to restore margins and working capital discipline and free cash flow generation. We've done that with the assistance of Project Momentum, which has been very successful for the organization, and now it allows us to invest for growth. Having that flexibility allows us to deal with the external environment. I mean the external environment sort of it is what it is and we're well positioned to manage our way through it. So it feels great for us and the organization to be turning the page to growth going forward. And we highlighted some of those areas in the prepared remarks in terms of areas that we would look to. But that visibility is really designed to reinforce the confidence and provide some visibility to you all for that low single-digit algorithmic growth, which we expect going forward. The underlying category trends are healthy. We're seeing stability and improving trends in home center and nontracked channels. The areas of growth that we highlighted in the prepared remarks around distribution, we're expecting distribution gains in the back half of the year in international as well as pretty broad-based distribution gains in the U.S. E-commerce continues to be a source of growth going forward. Pricing and mix management is an increasingly sophisticated discipline we have in the organization, allowing us to drive growth. You also have market expansion opportunities, and we're really excited by some of the innovation that we're bringing to market, both this year and next. Having multiple levers to pull really allows us to drive growth in the right way. It allows us to be choiceful about where we're going to drive that growth because then it will allow us to continue to expand margins along the way. So I think we're really well positioned in terms of going forward, and we're confident in the back half of the year as well as heading into '25. Anything I missed there, Robert?

No, that's great. I was just wondering if you could talk just a little bit about your thoughts around the promos, both in the quarter and how that may play out in the second half of the year?

You are seeing a slightly elevated promotional environment. It was one that we expected given the macro environment that we're in, given the pricing that's occurred over the last couple of years. I wouldn't say it's anything problematic. You're seeing a stable pricing environment, a healthy promotional environment. It's driving real volume growth in the category, both internationally as well as in the U.S. The depth of the promotion is up a little bit. The frequency is up slightly. But overall, an on balance is consistent with what you would have seen pre-pandemic 4 years ago. So nothing overly troubling from an unhealthy promotional environment.

Yes. For the back half of the year, I think we're looking at kind of pricing and promotional levels consistent with what we saw in the second quarter. So kind of offsetting some of the volume that we're seeing, but still ending up with about a 1% top line organic growth rate back half.

Your next question comes from the line of Lauren Lieberman from Barclays.

Just wanted to tackle -- just want to say a little bit Auto Care. I think it's the launch you guys posted in New York, you talked about the division getting back to pre-COVID margins in fiscal '25 and now you're there. So -- just kind of curious, I guess, just in the short term, sequentially, is this a high watermark we can maintain and build from here or anything just sort of timing wise to be aware of? And then also, I'll preempt my follow-up and just ask also about Auto distribution gains. I'd just love to hear a little bit more color on that element of the growth strategy that you guys have had, but lead by the macro and the environment, just what you can tell us kind of about the specifics on some of the distribution wins. It'd be great to get more color.

Yes, Lauren, we did a really nice job recovering margins in that business. I know we said we were working to get there by '25, and this quarter was a testament to the hard work that a lot of people have done. So we were able to get segment profit up 600 basis points in the quarter. That really wasn't timing. It's input cost. It's taken cost out of the system. It's continuing to hold the pricing. So I would say that has gotten us to a good run rate. We expect to continue that as we go forward throughout the rest of this year and into next.

And Lauren, on the distribution gains, as you know, when we bought that business, it was a fairly mature distribution set at the time, but we've been able to provide incremental distribution opportunities, expanding some of the distribution, our innovations being well received. Some of our partnerships are being well received. It's not necessarily unique to this year. But in years past, we've had wins in home center as well as club, which those continue. On the international side, we continue to expand that business. And year-to-date, we're up 4.2% in that international business. So a lot of great things happening in Auto Care on the top line as well as with the margins.

And your next question comes from the line of Bill Chappell from Truist Securities.

Just first on Batteries. Maybe a little more detail on what you're seeing. It seems like the category is normalizing post-COVID and just trying to understand, I think you talked about private label was starting to recede. But what are you seeing on like the premium on the lithium side? What are you seeing in terms of Rayovac? Is that gaining holding, losing share? Just kind of more color around the consumer as they're looking at the category today.

So Bill, on the Battery category globally, we're seeing volume and value growth globally. You're seeing volume growth in the U.S. as well, an important data point. You are seeing a little bit of value declines in the U.S., so that's related to the pricing and the promotion that John talked about in terms of our Q2 and Q3 results that we expect. All in all, seeing the positive volume growth is a great sign, both globally in the U.S. private label share, you're seeing volume and value declines globally. So stable -- shares are stable. Overall, our shares are roughly consistent with where they've been. So not a lot of disruption among trade down. Within Rayovac, you are seeing share gains in the U.S. It was up 0.3 value points in the latest reporting period. So that brand is playing its role within our portfolio and catching some of that demand is maybe looking for lower price points.

Got it. And then on the lithium side, I'm sorry.

And lithium, you're seeing some positive trends on lithium as consumers are settling into higher price points. I think with that one, you're continuing to see maybe a bifurcation from consumers where sort of higher-income consumers are continuing to spend more freely than middle or lower-income consumers are. And I think as the macro environment cooperates and some of the pricing settles in, we continue to be optimistic in the role that lithium is going to play in our category.

Got it. And then just one follow-up on Auto Care. I mean what is kind of the March quarter tell us? I mean you said appearances were up strong, but I thought appearance kind of segment was more of a mid-summer type category. So -- and I assume that means if it was up 9% and the overall business was up to that something else lagged, how does the setup look for the category as we're going into the key summer months?

I would say, Bill, we're off to a good start. And I wouldn't take too much of a read on what happens in March in terms of April, May and June. We're off to a good start. We've had good early shipments. Appearance is off to a strong start. Some of the innovation that we've launched is off to a good start. Refrigerants tends to be a little uneven in terms of its demand just because of the weather dynamics that it plays. Performance Chemicals is flat. Fragrance was down a little bit.

Yes. And just to tidy up a little bit on the third quarter, I think we -- some of the volume that we planned in Auto, we now expect to see hitting the fourth quarter and that is a little bit of an impact to our third quarter call top line consolidated.

Your next question comes from the line of Andrea Teixeira from JPMorgan.

So my question is on the commodities outlook. I understand that you're still benefiting from pricing and commodities going in favor to you, but also how we should be thinking as we progress thinking of commodity, some of the commodities are going the other way and how we can normalize and if you should normalize to 40% level or we should be seeing some reinvestment in the gross margin as we go forward? And then my follow-up is on the cadence, if I can, on the second half, going back to your comment about 1% in the second half organic sales growth. It seems that you're implying Q3 will be slightly above that and then potentially Q4 being negative. Just want to make sure that we understand the cadence given the puts and takes in comps last year.

I would say it's a little closer to 1.5% to 2% on both 1% to 1.5% kind of third and fourth quarter. They're both positive. Yes. And then it's going back to your question on input costs. So this was the first quarter in a while where raw material input costs actually turned positive for us. And we're continuing to see that kind of as we finish out the back half of the year, Andrea. So big drivers of that would be lithium, steel, R134a and zinc. Those have all been pretty positive for us in the Q2, and we expect that to continue in the back half. So full year, we're expecting materials to be like 140 basis point positive driver to our gross margin.

And then as we go ahead, do you see any of those trends shifting as you look at futures or what to expect?

Well, between inventory and sort of our visibility on what we've got fixed up, I don't think I'd see a lot of visibility in the back half of this year -- variability, I'm sorry. We've got pretty good visibility to that. So no, I think that's in pretty good shape.

Your next question comes from the line of Dara Mohsenian from Morgan Stanley.

On Batteries, you sounded fairly constructive on the category itself. It also sounds like some of the untracked channels are performing better sequentially. Can you just give us a bit more detail on the channel performance in the Battery category just given some of those untracked channels or at least in theory, more economically sensitive in a tough consumer environment doesn't necessarily sound like you're seeing that impact, but I'd love a bit more detail there. And thoughts on the next couple of quarters here, particularly as you cycle some easier comps in those channels? And then second, can you just touch on distribution gains in Battery and your shelf space as you look at both the U.S. and international over the next few quarters here?

I'll start with the second one first, Dara. I mean from a distribution wins we've had in different markets around the world, nice distribution wins that will continue to be set in the back half of the year. In the U.S., really broad-based, you're seeing some wins in dollar. You're seeing some wins in home center and specialty retailers. This is new distribution, it's expanded distribution. It's better placement in the planogram. So it's really a variety of different wins that we've been able to accomplish in the first half of this year, which will start to take effect in the back half of the year. In terms of -- the benefit of our business is the ubiquitous distribution that we have. And so we are in all channels. You are seeing some channel shifting from consumers and fortunately, we can be there to meet consumers in whatever channel they choose to shop in. In the untracked channels that you mentioned, it was roughly this time last year when you started to see some of the softness in home center. We are seeing that continue to moderate a bit as we work our way through the comps year-over-year. We are seeing some signs of life in OEM in the B2B business and that's really encouraging to see going forward. So as of now, the trends have played out about as we expected, and we continue further improvement as we get in towards the end of fiscal '24.

Your next question comes from the line of Brian McNamara from Canaccord Genuity.

While destocking appears to be largely behind us across most consumer categories, we have seen some hesitation or pause from retailers in terms of restocking in certain categories. I'm curious if you're seeing any changes in your retail partners' behavior across Batteries and Auto Care. And how that impacts your confidence for a return to growth in H2?

I would say on balance, we were confident from where inventory levels fit. We're confident in terms of how retailers are approaching investment in our categories from an inventory standpoint. The inventory discipline was something that occurred coming out of the pandemic, and we haven't seen a step change in either direction in the recent quarters. So I would say what we see in inventory today and our approach with retailers is built into the guide that we've provided. With Auto Care, it's early in the season. So a lot of that's going to depend on how does the season progress and how does the offtake occur, and that will drive a lot of the replenishment activity in Q3 and Q4.

Got it. And then if you could point to 1 or 2 surprises, either good or bad in H2 for results to materially deviate from the guidance you laid out, what would you point investors to in that regard?

In terms of the go-forward guidance or -- are you talking Q2 in the second half -- the second half, I mean I think a lot...

The H2 implied guidance.

Look, I think we've tried to take a balanced approach in terms of risks and opportunities that exist in the balance of the year. I think we've expected the macro environment to continue. We've expected to continue to see improving trends in nontrack channels, which we've seen to date. We have distribution gains, which are under our control in terms of getting those in-store and execute those with excellence. I think from -- and from a cost standpoint, with the inventory levels that we have, we're largely locked.

Your next question comes from the line of Hale Holden from Barclays.

It's been a while since I've heard you guys talk about international expansion. And I was wondering if you could talk through what the opportunity set is in some of those smaller markets and how you make sure you don't get sort of bogged down in them?

Yes, Hale, I think we have a great international footprint that was a strategic advantage for us with the Auto Care business to enable to -- enable us to expand that business using the backbone that's been established with the Battery business. We were off to a great start when we first acquired that business. And then when the pandemic impacted margins, we took a deliberate step back. And so we're going to pause future aggressive expansion in order to restore margins in that business. And then reaccelerated from that point forward. That's exactly what we did. We've restored margins back in that business. We now have the ability to invest to grow going forward. And I would say there's a variety of markets we look to around the world. Some of them in the modern markets like Australia and the U.K. but then there's also some opportunities in the developing markets where we have a stronghold on the Battery category as well as so we can use that distribution muscle to drive the Auto Care business.

And you also talked about expanding Battery into smaller markets? Or did I miss that?

That was part of the -- in the prepared remarks, we did talk about -- we have a -- we serve roughly 100 markets in our distributor market group globally. That gives us real insight into those markets, a lot of markets around the world, and we can analyze that footprint that we have with distributors and determine if there are markets which we could drive additional growth that we were to serve directly. And there's a handful of markets we see an opportunity to do that with. Obviously, we don't want to get into which markets those are. But it is a bit of an incubation for us within the markets to be able to understand and learn and gain insights into those markets and determine which ones would be better served by us serving directly as opposed to through distributors. So there will be market expansion and future growth going forward.

Your next question comes from the line of Jenna Giannelli from Morgan Stanley.

I appreciate all the color and work you guys have done on the balance sheet. I know you said you expect leverage to be below 5x by the end of the year. I guess just maybe update or refresh us on the longer-term outlook of where you want that to be over time. If the right cadence is still about a 0.5 turn a year, maybe we see some acceleration on that. And any shifts or thoughts on debt that you want to target within the structure as you continue to bring that leverage point down?

Yes. So we're making good progress against the debt reduction. We're still anticipating to get below 5x or below by the end of this fiscal year and half a turn is probably what we are targeting over time. I think that for us, 4x leverage probably makes more sense. We don't have a target per se, but I think we'll continue to keep pushing to get leverage down from here. As far as what we're targeting, I think we'll continue to balance. We have been focusing on term loan, but we'll look at term loan versus bonds and just look at the best economic decision depending on how those are trading.

And your last question comes from the line of William Reuter from Bank of America.

I just have to -- the first is there are very few categories in the U.S. where I think we're seeing volume growth. Do you think that this is expansion of the number of devices that are using Batteries? It doesn't seem like the economic environment is getting better. So I wouldn't expect there to be a lot of restocking. And then kind of following on Jenna's question about leverage. I guess what do you think that the bigger, longer-term strategy here is in terms of you've been so focused on debt reduction for the last several years. Now maybe you would consider some strategic options even though in the near term, kind of it might be debt reduction.

I think on that last question, we'll continue to focus on debt reduction. As John said, I think we want to achieve the objective of getting below 5x by the end of this fiscal year. Longer term, getting the leverage levels down below to 4 and below, then it opens up more strategic capital allocation decisions where you can be -- you can create optionality going forward in terms of share repurchase, continue to pay down debt or strategic acquisitions that may pop up. But for now, the focus and the disproportionate effort is going to be on paying down debt. In terms of the volume growth, again, it's very positive. You had to work your way through a lot. You had the COVID normalization period. You then had pricing increases. You've also had a pretty tough macro environment seeing that volume growth globally and in the U.S. is really encouraging. You have a very large installed base of devices already in people's homes, between -- call it, between 50% and 60% of the devices people have in their house take our Batteries, new devices and roughly the same percentage. So that's healthy installed base. Consumers are reengaging with the category. It also shows the balance that we're executing from a promotional strategy is keeping consumers engaged in the category. You're continuing to see consumers disproportionately migrate to the premium end of the category, the promotional strategy is working because we're able to drive volume growth going forward, we're going to drive sales growth, and we're also going to drive margin improvement. So it's all about that calibration between those different variables that we're trying to optimize and drive the right results. Thus far, we've been really successful in doing that.

And that concludes our Q&A session. I'd like to turn it back to Mark LaVigne for closing remarks.

Thanks, everyone, for joining us today and your interest in Energizer. Hope everyone has a great rest of the day.

Thank you, presenters. And ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.