ICL Group Ltd (ICL) Q2 2016 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by. And welcome to the ICL Analyst Conference. At this time, all participants are in a listen-only mode. A presentation will be followed by a question-and-answer session. [Operator instructions] Now without any further delay I'd like to hand the conference over to your first speaker today, Limor Gruber, Head of Investor Relations. Please go ahead.

Thank you, Keith. Hello, everyone. Welcome and thank you for joining our second quarter 2016 analyst meeting and conference call. Earlier today, we filed our second quarter report to the Securities Authorities and the stock exchanges in the U.S. and in Israel. The reports as well as the press release are available on our website. For your reference, this meeting is being webcast live at www.icl-group.com. There will be a replay available a few hours after the meeting and a transcript will be available within 48 hours. The presentation that will be reviewed today was also filed to the Securities Authorities and is available on our website. Please don’t forget to review Slide number two with a disclaimer. Our comments today will contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations, and are not guarantees of future performance. Today, we will start with a presentation of our CEO, Stefan Borgas; followed by Kobi Altman, our CFO. In addition, ICL’s executive committee members are here, and we will all be happy to answer your questions following the presentation. Stefan, please.

Thank you, Limor. And good morning, good afternoon, good evening, ladies and gentlemen around the world. We are joined here also for the last time by our outgoing chairman Nir Gilad. Nir, so happy to have you at the table even though it's very, very sad that it's the last time. Let me make a few comments to the quarter. And I'll start with slide number 3. In the deck that you have hopefully all been able to download or follow in the WebEx. Under the circumstances this has been an excellent quarter for ICL. I am saying under the circumstances because the commodity business which we have subsumized mostly in our essential minerals division continues to be under severe pressure. Prices in both potash and phosphate as well as volume pricing is in excellent business because our specialty solutions division has had 15% growth year-over-year and this we think at least in the order of magnitude is sustainable growth rate for the upcoming quarters as well. We have also despite the severe pressure in the commodity markets been able to deliver again three positive cash flow, our CFO since he has joined ICL more year and half ago has put big emphasis in cash flow delivery, the organization is starting to understand this everywhere. We can see it in working capital behavior. We can see it in CapEx. We can see it in maintenance. We can see it in the other balance sheet items. I think we owe very special thank you to Kobi on this one because this is truly a capability that ICL is now building to become a world class company. Slide 4, gives you a little bit more of visibility on the two different businesses. In Essential Minerals business the market environment continues to be very, very competitive. Potash volumes remained relatively low. We shipped little bit more than a million tons of potash. Mostly in the western world, Europe was quite satisfactory and also Brazil was okay. But of course nothing in China, almost nothing in China and India in the second quarter because of the contract negotiations. It seems to us now that after the contract have been signed in India first and then in China that there is a little bit of relief in the potash market, materials are flowing very nicely now, stocks are quite low in the supply chain all around the world. And we can also see positive pricing trends although it's early to make full judgment but in Brazil we can see $20- $30 improvement in the US. We can see $10-$20 improvement in Southeast Asia. We can see the same so it seems like this has relieved some of the pressure. On the phosphate side, there is no volume issue but there is continues pressure on prices, 30% to 40% lower prices depending on the product and depending on the regions. Initiated rethink by a reaction of the global market leader to the very strongly increased Chinese prices -- Chinese quantities, export quantities in 2014 and much more in 2015. As a result of this our joint venture in China also ran into difficulties. It made an operating profit loss in the second quarter. But that loss was almost entirely attributed to April, in May and June, the restructuring measures that we have introduced very aggressively at the beginning of this year when we saw the environment deteriorating and starting to grip. So that we expect no more losses in this operation in the second half of this year. In the Specialty Solutions, this is much more fun to talk about this business in ICL at this moment in time; we have very strong performance in the industrial products business unit which is the bromine and the phosphorus business. Higher volumes, lower raw material cost, efficiency gains from all the measures that we have done last year, new good contribution from new products. Much is going well in this business. We see good, stable, bromine prices throughout the rest of the year. Maybe one or the other increases here or there. In China, there was the expected summer downturn in the prices but by a much lesser extent than in previous years. And the trend has already turned now in recent week so nothing to worry about at least we think. So the phosphorus part of the flame retardants business is more difficult here, there is more of a competitive environment around the world due to again pressure from China. The specialty -- the advanced additives business unit, this is the downstream first phase that are going into the industrial market and our specialty minerals also had a very, very good quarter. The specialty minerals were very strong. Fire safety business was very strong and oil additives business also was very strong. Here very happy on how this works despite the fact that there is a quite a bit of price pressure in the commodity phosphate salts or a more commoditized phosphate salt, both in North America as well as in Mexico -- as well as in Europe. The Food Specialty business continues to have a very good growth trajectory. Unfortunately, margins are not yet moving up. Profit also increases but margins are not yet moving up because the growth of the top line and on the portfolio gets counterbalanced to a certain extent with price decline on the more commoditized phosphate salt. Similar effect and we see in advanced additives area. We think this has come to the bottom but we are not very sure when this will increase. So we are careful about the production on this part of the food business. But food business as a whole had a good quarter. Russia very strong, CIS very strong. The food growth trends new solutions, tailor made formulations, protein enrichment, wishes of customers, clean label, wishes of our customers, more natural, more simple, less processed food, non-allergic, all of these trends help our business and this is what driving it. Our Specialty Fertilizer business is the fourth business unit in the specialty solutions area had some light and shadow. It suffers of course under the dramatic down price decline in the commodities. This makes it much more difficult to sell specialties to farmers because the values add is smaller and it's tougher to prove that a more expensive product is adding value. So this leads to decline in prices in some regions. But the operational and the sale stability that we have in this business unit is quite amazing. There is some geographic expansion that starting to happen especially in China. But also their resilience in the home market is quite good wherever we have to specialty offering. If we translate this now into the balance of the company, you can see that we are now half specialty half commodities on the sale side. On the profit side, we already went too far. Our objective is to have 50% of our profits come from specialties by 2020. We are already at 64% this quarter. Quite frankly this is for wrong reasons because it's not for the expected long-term strength of the specialties business yet because we wanted to grow more. It is for the weakness of the commodities. So we like the numbers but we don't like the reasons behind. On the next slide number 6, you can see actually the value of our strategy. The red line on both sales and operating income shows the stabilizing effect of the ever growing specialty business in ICL to the entire franchise. And the blue line shows the commodity volatility that we have which is in the downturn right now. In my last slide today, we have summarized again our projections for both of the parts of ICL -- sorry for the specialty solutions business we expect this to continue to grow with an average CAGR of 5% to 10% per year over the course of the next five years and within above with higher growth and profitability of course because we are starting to get the lever effect of the SG&A structure that have adopt over the course of the last one or two years. And we get also here some benefits from new product portfolio which are higher margin and from efficiency measures which give us a little bit better operating margins. So overall our strategy is working. I am happy with the quarter and we are looking forward to a second half year which should have relatively similar pattern in the second quarter that you have seen. Maybe with the exception of phosphate in China which will look better but on potash the volume growth will come for sure that everybody expects. Most of it will be eaten up by lower pricing unless this careful trend that we are seeing now will continue and then of course we have some upside. We will be very happy to report upside. But in our internal expectations we expect flat essential minerals profitability and continued rise in specialty solutions profitability. Kobi please give us the details of the breakdown in the businesses.

Thank you, Stefan. Good day, everyone. The second quarter performance demonstrated again how valuable our backward integrated value chain strategy is. Our Specialty Solutions division provided a balancing effect to the challenges our Essential Minerals division faces. Another important contribution to this quarter operating income came from our operational excellence initiative. We are pleased to show improvement in practically all parameters in this quarter versus the first quarter of this year. Although, the business environment is not less challenging. Please note that in these two bridges as well as in the following bridges and following slides, we separated the 2015 strike impact on sales and operating income in order to simplify your analysis and make the picture clearer. Lower potash and phosphate prices negatively affected our financial. We didn't sell potash to China in second quarter and that impacted the overall volumes we sold. Lower volumes also on phosphate fertilizer and the non core businesses we sold since the second quarter of 2016 will also a factor but to a lesser extent. The negative impact of prices was will partially compensated by lower cost base. Some of it due to external factors such as lower sulphur prices in some and more importantly result of efficiencies and cost saving effort. G&A expenses increased this quarter compared to the second quarter of 2015 by less than 5% due to the newly added expenses at our Chinese joint venture. Net of this item, the actual comparable expenses decreased by 4%. We are working to continue the strength and our target is to reduce overall G&A in 2016 by around 10% versus 2015 with further reduction target for 2017. Our CapEx level this quarter is consistent with our target of approximately $650 million for this year. We have another quarter of solid positive cash flow generation supported by stable operating working capital requirement despite the higher sales versus last quarter. And by our cash flow optimization efforts. We expect cash flow to be lower next quarter but for all good reasons as we are selling higher volume and our receivables will increase accordingly. Moving to the next slide, slide 10. And in this quarter we are reporting you in the new structure of a two divisions. We filed few weeks ago comparison figure that you can see in our website that will give you also comparison to future years and future quarters and not only the last quarter as we've in the report. This slide, slide 10 presents the result of our essential minerals division. The rough upstream market conditions in which we operated during this quarter, as well as the first quarter of this year are reflected in a negative impact of prices as well as volume. The negative contribution of prices, volumes and the joint venture loss to the operating income was partially offset by lower energy, raw materials and by our continuous for saving efforts. It is important to mention though that commodities market prices are seasonal, volatile and subject to down cycle. And are expected to bounce back in a given time period. While most of our efficiencies and cost saving measures are expected to linger through up cycle as well. The next slide, slide 11 talks about specialty solutions division. On the other end this division the specialty solutions recorded an impressive growth this quarter mainly supported by higher volumes, sold in most of our specialty businesses. Such growth was slightly offset by lower prices especially in advanced additives and in specialty fertilizer. Moving to the profit side. You can see the price headwinds only partially offset the notable increase in operating income, which enjoyed the positive contribution from higher volumes, lower energy and raw material, mostly in our industrial products business line. And efficiency measures in our bromine operation in Israel. With that I concluded my remark and let's open the call now to Q&A.

[Operator Instructions] And your first question today comes from the line of by Yonah Weisz from HSBC. Please go ahead.

Hi there. Good afternoon, Stefan and Kobi. I'd like to ask two questions if I may one on potash and one on bromine. For the potash side, and you can correct me if my calculations are wrong, but it seems like you have had extraordinarily high price and a fairly, fairly low cost per ton. So some of your Canadian peers for example, reported prices implying around selling -- implied selling prices around $200, $210 per ton on international markets, whereas you seem to be selling at $240 a ton. At the same time, with a third less volume than the fourth quarter of 2015, you seem to have reached a cost equal to 2015 per ton on an EBIT basis. So I'm wondering first of all, could you tell me what led you to get this very, very high price? And can this premium or difference to the rest of the world or rest of your peers continue out into 2H 2016? And also a bit more on the cost side, is this fantastic cost base, even when you have low volumes -- excuse me, when you have low volumes, will that cost base continue on or even improve your volumes increase in 2H 2016?

All right. I mean the answers pretty simple. We have great marketing people and great production people. Therefore we have better prices and lower cost. The price effect is mix effect really. We have an older proportionate quantity of sales in Europe where we are selling in many cases little bit more specialties potash mix with other products PKs and NPKs but also we are selling directly to farmers. So we are getting higher net backs here. And because of the lower volumes and usual you see this mix effect. On the cost side, this is mostly the effect of the ICL production network. Because sales and production are not the same. You know that when we produce in Israel we have the ability to store the produced volume therefore our production costs are not depended on the sales quantity. So when we have lower sales quantities like this quarter, we can still produce relatively at full capacity in Israel and that helps us to equalize -- to still balance out the full fixed cost. And that's what happened here. The Israeli asset of course is streamline now since last year. You saw it in the last quarter and you see it again. So this I think shows that the cost that we have is sustainable, the lower cost is sustainable. We also had good performance of our Spanish operations. So we are little bit lower in cost. This is not dramatic but it is still contributing a little bit and also the UK had a record production preparing the exit there in one to two years. So that also helped fixed cost dilution and polysulfate had a relatively good quarter or relatively good first half of the year so that also helps to the fixed cost dilution. So all of these things contribute and if you add them all up and then you get this picture. Kobi, some additions?

Yes. Just to add two parameters in order to make sure that the comparison to potentially you are doing to peers is correct. And we are also providing in our report the average sale price on FOB basis and not CIS, this I think will enable you to do maybe a better comparison to others. So this is just one thing that I wanted to mention. The other item relates to last year, the comparison to last year on the cost last year, we had a strike in the potash business for most of the quarter. And as a result of that the cost due to the fixed expenses that were embedded in our cost structures contributed to relatively high cost per ton. And I just wanted to highlight this one as well when you are comparing to this quarter.

Okay. Thank you. Just before bromine, just one more question on cost is that, if your volumes let's say in second half increase with contracts signed, is there potential for costs to even fall even further, or is this kind of a stable plateau slightly below $200 per ton?

No. This is kind of the stable level because as I've explained, sales and production are decoupled because of this Dead Sea characteristic.

Okay. Super. And just a quick question on bromine, on clear brine fluid. I'm wondering if any of the slight stability which we're now seeing in the oil price and perhaps a bit more stability in terms of drilling activity have translated into any more volume, higher volume, and/or higher pricing for your clear brine fluids.

The biggest thing that we've been struggling within the clear brine fluid business since already the fourth quarter of last year was the forecastability of this business because the first time in 10 years we didn't get a forecast from our customer. So there is relatively high level of uncertainty still in this business. But the oil prices at $50 or even little bit higher that maybe in the next one two years are expected to slightly increase rather than decrease, are giving a little bit more confidence to our customers. We've received forecast from one of our customers that actually indicated there is stability. But it's early now in the third quarter so I don't want to be too enthusiastic about it. It looks a little bit more stable than we would have seen it three or four months ago.

Thank you very much. [Operator Instructions] Your next question comes from the line of Matthew Korn from Barclays. Please go ahead.

Hey, everyone. This is [Justin Wheelon] filling in for Matt. My question is on the China JV. And how much progress are you all seeing on your cost-cutting and efficiency programs that you've announced before? And is the transition to specialty moving as planned and on schedule? Thanks.

Okay. The cost cutting is going much better but we are much more aggressive as well because of the pricing environment. You saw that we have a $15 million loss for the joint venture as a whole in the second quarter that we booked. But this is the 100% number. This is almost entirely occurred in April. So May was red zero, June was black zero in this joint venture; we don't expect any more losses in the second half. So the cost cutting measures have actually helped quite nicely. Also some optimization on the sale side there. To move specialties, of course takes longer because it requires new facilities, our Board of Directors yesterday has approved our the core investment that has to be done in this joint venture, the new white phosphoric acid plant. Our partner has already approved this as well. So we will start construction here and this takes the better part of two years until this comes online. And then we have the super-clean phosphoric acid that we can sell in China. Of course, we are not waiting with the transformation to specialties until this is done. But that will be the key tool in order to move large portion of the portfolio. We have in the beginning of the second quarter approved the construction of the water soluble specialty fertilizer plant and of coating specialty fertilizer plant in China which takes material from here and diverts into the specialties as well. We've had very good success on the sale side in the industrial phosphate area. We are now the Chinese market leader in calcium phosphate for the toothpaste industry in China. We are very proud about it. It's not a massive market but it is an indication that the new competence that we bring here on the production side for product quality, for customer service, for technical support and for sales excellence is starting to work also in this market. We have the opening of our food laboratory in Shanghai in Monday in a week. So this has been completed as well. This will also help. We have just increased the number of research projects in the R&D center that we have together with YPH. So I am quite pleased to see the momentum there. And bottom line results will follow no doubt.

Thank you. And your next question comes from the line of Joel Jackson from BMO Capital Market. Please go ahead.

Hi, good afternoon. So a few questions. Stefan could you now tell us the mine plan of the UK? What should we expect for MOP and polysulfate production in the second half of 2016? What should we expect in 2017? What was it before? And then can you also give us an update on how polysulfate prices, sales, and costs are going?

Yes. UK second half of this year on MOP should be pretty much the same than the first half. We are--in light of the market environment looking at whether we should change the exits of MOP from the UK even earlier than 2018. Maybe already finished the production next year. This is under evaluation now we will publish this in a few weeks from now. It's -- we are pretty close but we are not quite ready. Polysulfate is doing very well. We sold more than 100,000 tons in the first half of this year. This is doubling the quantities of last year. We expect to sell more than that in the second half of this year because we have an acceleration and then again growth of 150,000 to 200,000 tons a year thereafter so that we reach 0.5 million ton by the end of 2017. Maybe we can do a little bit more here. It is a lot of moving pieces. Average sales price of polysulfate now is still over $100 per ton. And this is FOB the UK so you have to add freight then until you get to customers. But if you measure FOB then I think this is the better guidance for you.

Okay. And so I'm just confused, Stefan, by your language. So if I read your press release verbatim, it says the company has decided to accelerate the transition from extracting and producing potash at the UK mine. But you're saying second half-year volume will be the same, and you still haven't made a decision on whether you would actually accelerate the slowdown of potash production at the UK. So can you just reconcile that please?

The plan that we have to exit the UK would be that in the middle of 2018 we end the production there. We have made the decision to accelerate that just can't tell you whether it will be June next year or end of next year or three months acceleration or so.

So if I interpret that, what you're saying is the acceleration right now will be -- you will stop producing potash at UK maybe 3 to 12 months earlier than the middle of 2018 you thought before. Does that sound right?

Yes. That's fair to say. And that one of the major drivers for this is because this will support the built of the polysulfate franchise because it frees up capacity for polysulfate in lot of the equipment that we have would have needed otherwise. And of course polysulfate has the priority here.

Okay. And then my last question would be, as we now have re-segmentation, so we're trying to understand the businesses a little bit differently here. On the specialty solutions segment, can you give us some color on the seasonality of earnings and maybe relative margins percentages that business should experience sort of in a run rate year? Thanks.

Yes. Usually the second and third quarter are stronger than the first and the second quarter that has mostly to do with the end customers demand which is weak at the beginning of the year because the year is starting after the holidays at least in most countries in the world. And it is usually weak in December because most customers are reducing inventory for their end of the year account. But other than that the whole division is less -- much less seasonable than the essential minerals division. The specialty fertilizers which make up about quarter of this division follow the Ag cycle. So same that then you would expect in the essential minerals. The other businesses are much more stable over the year with this second and third quarter strength. And margins are pretty comparable from one quarter to another. It don't vary so much.

Thank you. And your next question comes from the line of Stephanie Bothwell from Bank of America. Please go ahead.

Yes, thanks for taking my two questions. Firstly, Stefan, in your opening remarks on specialty fertilizers, you said it was tougher to sell the value-add products in your portfolio to farmers in the current commodity pricing environment, which should mean pricing pressure in some regions. Could you perhaps put a bit more color on that in terms of the products that you're referring to and also the geographies? And my second question is on the balance sheet. Net debt was broadly flat sequentially versus Q1. You said earlier that higher volumes in the second half will be largely offset by the impact of lower pricing and that cash flow will be down in the third quarter. It looks like you still have around 50% of your CapEx budget left to spend in the second half, which on my numbers means that de-leveraging is probably going to be relatively limited this year and, if I assume flat pricing into 2017, probably relatively limited in 2017 as well. Therefore my question is what additional levers do you have to pull on the CapEx budget or in terms of incremental cost savings to begin to reduce your leverage? Thanks.

Okay. Let me ask -- answer the specialty fertilizer question and then turn the balance sheet question over to Kobi. My comment on specialty fertilizer was much more general comment than to specific regions because you sell specialty fertilizer which is a complex nutrient granule sometime coated, sometime it is water soluble product at double, triple, quadruple the price than a commodity product. And if you do this the savings for the farmer are in the labor cost, in the energy cost, in the machinery and in the yield. But if the crop -- if the commodity prices of the -- if the price of the commodity fertilizer is lower then obviously that leverage is much more difficult to show. It's simply an agronomic calculation of the farmer. And this is what we see. The second effect that we see this is very specific to MAP water soluble MAP which is one of the single products in the specialty fertilizer, this specific product is under significant price pressure from China in line with all the other commodities because the Chinese don't differentiate so much between water soluble products and other products. But that's more of an exception than anything else that's why I didn't put this in the foreground. Balance sheet?

Yes. Stephanie, in terms of the debt and the balance sheet, I'll start with a capital allocation principal that we are following very, very carefully and we are trying to balance between three dimensions. The first dimension is to ensure the long-term sustainability of growth in the company and the creations of the growth engines for the years to come. The second element is our debt structure or debt level. And the third element is to provide strong shareholder return via dividend and other measures to our shareholders. This year we will not experience a reduction in debt. We do plan to start to see reduction in the debt level in 2017 coming from the fact that we are going to keep as we said last quarter that CapEx at the same level of 2016 and as a result of that the growth in the company that we are expecting to see in 2017 will serve the reduction of the debt. But again this is a 2017 thing.

The other effect in 2017 is the further continuation of cost reductions that will just simply increase margins all other things being equal. So cost reduction lever is higher than CapEx reduction possibility unless we want to compromise growth in the specialty businesses because all of our growth CapEx is goes to specialty businesses. But we haven't made that decision.

Okay. Thanks. And perhaps just one follow up. Can you comment on the potential for further non-core asset disposals going forward?

Yes. We have one process underway. This is the process on our desalination business. I think we should get to a decision point in September I hope. It's comparative process but it's in the second round so there are only two players left in this round. It's going well so that should end and should bring triple digit million dollar proceeds that of course are a source for debt reduction. This will all go into debt reduction when we make that. But I can't guarantee it because there is a process where we are only half -- where we can only influence the seller side not the buyer side.

And do you quantify at all what the earning contribution of that business has been?

It is only visible in the financial results because it is not consolidated. It is not that dramatic.

Very small.

Thank you. And your next question comes from the line of Rosemarie Morbelli from Gabelli & Company. Please go ahead.

Thank you. Good morning, everyone, or good evening, wherever you are. Stefan, I was wondering if you could give us a little more detail on your FR122P flame retardant growing in terms of the interest in North America and Asia-Pacific. What do you see going on stream next year, for example?

Good potential. We are very happy with the take off. We get some interest from Asia-Pacific but mostly from those players who are exporting into Europe. The US is not market for this at the moment in time is very, very small. So the majority of this growth is in Europe.

So when you say that you are seeing an interest in North America, so we eliminate I guess the US based on your comments. So are you seeing more of an interest in Canada or is that at this stage more wishful thinking than anything concrete?

It is so negligible. You don't want to think about this.

Okay. That's good. And could you talk about the long-term contracts that you are establishing? Are you -- are they based on volume? Do you have potential to adjust pricing; given the fact that price seems to be increasing steadily as you pointed out?

All of it. I mean we have so many customers. We have every single model that you can imagine for this product.

So how much do you think -- do you -- how much of your protection do you estimate you are going to have in the long-term contracts as opposed to selling in the spot market?

For FR122

Yes.

This is very stable business. It doesn't -- actually not so relevant whether it's long-term contract or short-term contract because this is specified material by the customers to suppliers. It is relatively clear who is supplies to whom, so it is very transparent market so the question isn't for the business, isn't so relevant.

Okay. And then looking at clear brine fluids, you saw an increase in Asia-Pacific and South America. Can you give us a little -- a better feel for that? And if the Gulf Coast -- I'll get it right -- of the US is still weak, do you -- what is the percentage of your operations going into that particular region?

We don't publish which percentage we send, we sell, where in this business but as I said before, it's more stable than it was three or four months ago.

And lastly if I may, on the electronic side, demand for printed circuit board and automotive applications you said are flat. However, everyone else talks about applications for automotive growing. So could you help me understand why you are not seeing that particular growing?

Yes. I think we were debating here about 3% growth is this consider flat or is this growing? We would consider it as flat. We've had actually good uptick in printed circuit board for TVs in the second quarter. We think it has been an Olympic effect. And it will decline therefore we are little bit more careful on this business.

And actually I do have one more question. You talked about the price of elemental bromine being up 30% versus the third quarter of 2014. What is it versus the third quarter of 2015 and sequentially versus the first quarter of this year?

It's flat.

Thank you. [Operator Instructions] And your next question comes from the line of Howard Flinker from Flinker & Co. Please go ahead.

Hello, everybody. I think I understood the opposite of what you said about prices. Did you say that prices for you include cost insurance and freight, and therefore that's why the apparent price is higher, or did you say the opposite?

Are you talking about potash?

Yes.

Yes. So the prices that we book as sales include the freight. And this is why we provide also the full average price for the quarter in a separate table. So that you will be able to make the difference.

I understood the opposite. Okay. Thank you.

Thank you. [Operator Instructions]

Great. I am very happy to see that the quarter was so clear. That we have relatively few questions this time. Thank you very much, ladies and gentlemen, to listen, for dialing in. Enjoy your day and I'll see you on road show or in latest three months from now. Bye, bye.

Thank you very much. So, ladies and gentlemen, now this concludes our conference for today. Thank you all for participating. And you may now disconnect.