Alithya Group Inc. (ALYA) Earnings Call Transcript & Summary

Good morning. My name is Emily, and I will be your conference operator today. At this time, I would like to welcome everyone to Alithya's Third Quarter Fiscal 2025 Results Conference Call. [Operator Instructions] Thank you, and you may begin your conference.

Thank you. Good morning, and thank you once again for joining us for Alithya's third quarter fiscal 2025 results conference call. The press release and MD&A with complete financial statements and related notes were issued this morning and are now posted on our website. The webcast presentation can also be found on our website in the Investors section. Please be advised that this call will contain statements that are forward-looking, and which are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated. These statements include our estimates, plans, expectations and statements regarding the future growth, operations, results, performance and business prospects that do not solely relate to historical facts. These statements may also refer to future events, including expectations around client demand, business opportunities, leveraging our services, IT, AI and expertise to meet client needs, excelling in a competitive market, achieving our 3-year strategic plan and deploying our smart shoring capabilities. For more information, please refer to the cautionary note in our presentation and to the forward-looking statements and Risks and Uncertainties section of our MD&A available on our website. All figures discussed on today's call are in Canadian dollars, unless otherwise stated, and we may refer to certain indicators that are non-IFRS measures. Please refer to the cautionary note in our presentation and to the non-IFRS and other financial measures section of our MD&A for more details. Presenting this morning are Paul Raymond, Alithya's President and Chief Executive Officer; Bernard Dockrill, Chief Operating Officer; and Nicolas Lavoie, Chief Financial Officer. I will now turn the call over to Paul Raymond. Paul?

Thank you, Benjamin, and good morning, everyone. Thank you for joining us today. I have the privilege of beginning this call by highlighting our notable third quarter achievements, some of which were new records for the team. I will then turn things over to Bernard Dockrill, our Chief Operating Officer, to break things down further, followed by Nicolas Lavoie, our new Chief Financial Officer, who will provide the financial highlights. That said, I would like to take this opportunity to introduce you to Nicolas, who joined Alithya this past December. Nicolas is a CPA and CFA with nearly 30 years of experience in finance, having worked with public and private multinational companies operating in entertainment and technology, media, mining and manufacturing. He has also led several local and international acquisitions. Nicolas will lead Alithya's finance function, acquisition initiatives and Investor Relations as we continue implementing our fiscal 2025-2027 strategic plan. So please do not hesitate to reach out to Nicolas after the call. Now back to the results. We are proud to disclose that the Alithya team delivered a record quarter on several fronts, including posting the highest adjusted EBITDA margin since going public, which is a key milestone of our 3-year plan. Q3 was also a high watermark for gross margin as a percentage of revenue, reflecting the outcome of our focus on delivering higher-value services to our clients. In addition to very strong third quarter bookings, which Bernard will address shortly, we are also pleased with the sequential organic growth that we all experienced in all our geographies. I would also like to mention our satisfaction with the early contributions gained from the XRM Vision acquisition completed on December 1st. That acquisition is contributing to scale of our Microsoft and smart shoring capabilities, and the development of cross-selling opportunities has already shown great promise. We are delighted to welcome Felix Robitaille, XRM Vision's leader, and the whole XRM team to the Alithya family. This acquisition aligns with our strategic plan to integrate companies offering high-value complementary services for our clients. By bringing in XRM Vision's talented Microsoft-focused experts, we unite 2 top Microsoft Dynamic partners, strengthening our asset-based solutions and our smart shoring capabilities across North America and Morocco. This integration expands our talent pool and reinforces our ability to capitalize on global market opportunities. Additionally, XRM Vision's accelerators designed to streamline financial reconciliation between finance and project teams are a valuable complement to our existing solutions. So I will now turn things over to Bernard to provide some specifics of our third quarter performance. Bernard?

Thank you, Paul. Good morning, and thank you for joining our call today. Q3 was a strong quarter for Alithya, and a positive step forward as we continue to execute on the priorities we set forth in our 3-year strategic plan. Our organizational change initiatives are driving profitable growth and we're seeing promising trends in our targeted industries, and continue to build on the progress we have made over the past quarters. Despite some headwinds in our industry, we delivered sequential growth as a result of our disciplined focus on the initiatives outlined in our 3-year strategic plan. Q3 was one of our strongest booking quarters since April 1, 2021, when we signed a very large 10-year engagement with 2 major clients. Our Q3 bookings of $138.4 million represents a book-to-bill ratio of 1.2x revenue, or 1.34x revenue when adjusting for the large commercial agreement signed in April 2021. Our book-to-bill ratio over the trailing 12 months was 0.97x revenue, or 1.1x revenue when adjusting for the same commercial agreement. As a result of our Q3 bookings, our backlog is now approximately 17 months of revenues based on our trailing 12 months revenue. We are also encouraged by the fact that our bookings are fairly consistent to the proportion of our revenues across our geographies. Additionally, over 1/3 of the $138.4 million in Q3 bookings came from wins in financial services and insurance, including strong bookings in banking, highlighting a return to growth in this vertical after several slower quarters. Finally, a higher proportion of our Q3 bookings were a result of sales of high-value enterprise transformation engagements including in the Canadian market. We continue to focus on expanding our smart shore capabilities. And as of the end of Q3, 9.3% of our professionals are based in our smart shore centers. As Paul mentioned, the acquisition of XRM Vision broadens our smart shoring capabilities in Morocco. Although we are still early in the integration, we have identified several opportunities for leveraging these new capabilities in delivering our client services and our back-office support. Our acquisition strategy continues to be a driver for increasing our smart shoring delivery and such immediate contributions underline the importance that acquisitions play in our overall business strategy. As I discussed during our last Investor Day in September, one of our 4 pillars and a differentiator for reaching our strategic targets is to leverage our industry-first strategy. Over the past several months, we have been acting on that front to further leverage our subject matter expertise in our target industries. This included a realignment of our business structure in Quebec, creating closer collaborations between our sales and delivery teams in each of the industries we serve. These industry teams are supported by our strong practices and partnerships with Microsoft, Oracle, AWS and others. Most importantly, the greater effectiveness of that realignment has been embraced by our clients. We have greater visibility and confidence in the depth of our consolidated expertise and our commitment to their mission. Q3 also saw the signing of multiple proof of concepts for IP and AI or GenAI-based initiatives. These included several application modernization POCs with our Rapid Suite IP, intelligent document processing, our mailroom automation efforts with Rapid Capture as well as several digital adoption initiatives for expanded use of Microsoft Copilot. Many of these copilot initiatives originated from the copilot academies we ran for our clients in past quarters, and we are now helping our clients take the next step. Switching to enterprise transformation, where we have seen a strong demand for our services. Specifically within our Oracle division, Q3 was a strong quarter with revenue, gross margin and EBITDA all exceeding expectations. And our client satisfaction rate remains very positive at 9 out of 10. The positive impact in our Oracle division was driven by the successful implementation of 5 large ERP and HCM payroll projects that all went live at the end of Q3. This included a regional medical center, where we completed the first implementation in the world in a health care environment of Oracle's new workforce scheduling application to manage nurse scheduling. This successful implementation positions Alithya well for future opportunities in this space. Our Oracle Enterprise Performance Management or EPM business also contributed to the strong results within our Oracle practice. Many of our largest Q3 bookings in the Oracle division included EPM initiatives with larger organizations. We remain focused on diversification with our new Oracle practice and have adopted a hybrid industry and functional competency go-to-market model targeting health care, professional services, manufacturing and financial services. We have seen positive early results from this model within our pipeline and bookings, including signing our largest Oracle managed services contract to date, and we expect to continue to see dividends from these investments in our next fiscal year. I will now turn things over to Nicolas to provide financial information regarding our Q3 achievements. Nicolas?

Merci, Bernard, and good morning, everyone. I'm very happy to join this conference call for the first time as Alithya's CFO and to highlight some of the company's significant achievements this past quarter. These past 2 months since I joined the company have been very rewarding, and I've had the privilege of meeting highly skilled colleagues and witnessed firsthand the opportunities ahead for Alithya. That said, let's begin with a review of our consolidated revenues. In the third quarter, consolidated revenues came in at $115.8 million, down $4.7 million, or 3.9% on a year-over-year basis. On a sequential basis, revenues were up $4.3 million or 3.8% versus the second quarter of this year with organic growth in all of our geographies. XRM Vision was reported for only 1 month in our results and contributed approximately $800,000 in revenues for the quarter. Client recurrence remained very high with approximately 87% of Alithya's Q3 revenues coming from clients that we had in the same quarter last year. That is an excellent indicator of the trust our clients have in us, and a good indication of long-term stability. Looking at profitability, we are reporting another quarter of continued improvement on gross margin as a percentage of revenues. Gross margin reached 32.3%, a record level for Alithya in the quarter, up 100 basis points from 31.3% last year, and up 170 basis points from 30.6% in the second quarter of this year. On a sequential basis, the increase in gross margin came from all geographies of our business. This performance comes from increased efficiencies in our continued evolution towards a higher-value business mix, 2 key priorities identified during the September 2024 Investor Day presentations. I will now turn to a review of our performance by region, starting with Canada. Revenues in Canada reached $61.7 million in Q3, down $6.3 million, or 9.3% on a year-over-year basis. The decrease in revenue was primarily due to one client's major transformation project reaching maturity and a reduction in revenues from certain government contracts, partially offset by a recovery in the banking sector and the contribution of XRM in the quarter. Of note, while down year-over-year, revenues in Canada were up sequentially from the second quarter by 3.4%. Looking at our gross margin in Canada, we saw improvement compared to the same quarter last year due to higher efficiencies and hourly billing rates, a greater proportion of higher-value services and a proportionately larger decrease in the use of subcontractors compared to permanent employees. In the U.S., revenues increased by $1.7 million, or 3.8% to $48.8 million. The increase is due primarily to organic growth in enterprise transformation services, support revenues and a $1.3 million favorable exchange rate impact between the 2 periods. Our U.S. gross margin as a percentage of revenue decreased compared to the same quarter last year, primarily due to a decrease in digital adoption subscription revenues, which historically had a higher gross margin percentage. In our international business, revenues were slightly down by $200,000 versus prior year with a lower gross margin as a percentage of revenue, mainly due to the end of a project in the U.K. Overall, from a geographical perspective, we saw a higher proportion of revenues in the U.S. versus the prior year, which positively impacted our consolidated gross margin and is in line with our strategic plan. Now looking at SG&A expenses, we are continuing to focus on optimizing our cost structure to ensure greater efficiency and long-term performance. In the third quarter, SG&A expenses amounted to $28.8 million, a decrease of $700,000, or 2.4% year-over-year. The decrease in SG&A expense was driven mainly by decreases in professional fees, occupancy costs and recruiting fees, which have been partly offset by an increase in employee compensation costs, resulting primarily from higher variable compensation, and the addition of the XRM SG&A. SG&A as a percentage of revenue was 24.9% in Q3 compared to 24.5% in the same period last year due to revenue deleverage. Looking at our adjusted EBITDA, as Paul mentioned at the beginning of the call, adjusted EBITDA margin reached a record level of 8.9% in Q3. That's up compared to 7.8% last year, and up sequentially from 8.3% in the second quarter of this year. Our third quarter adjusted EBITDA amounted to $10.3 million, an 8.7% increase year-over-year. Again, this reflects the progress we made on our operational performance and on cost optimization. Our adjusted net earnings came in at $5.7 million, representing an increase of $1.4 million, or $0.02 per share year-over-year. Finally, let's take a look at our cash flow and financial position. Net cash from operating activities remained strong, reaching $11.7 million in the quarter, a decrease of $3.9 million versus the prior year, which was essentially due to working capital variegations. As of December 31, 2024, net debt amounted to $108 million and our leverage ratio reached 2.6x net debt to trailing 12-month adjusted EBITDA, all within Alithya's targeted leverage levels. The sequential increase in net debt of approximately $12 million reflects the acquisition of XRM and the unfavorable FX impact on our U.S. dollar-denominated debt, which has been partially offset by the positive cash flow generation in the quarter. Therefore, liquidity remains strong, with cash on hand and availability under our credit agreement amounting to $63.7 million. Our goal is to continue deleveraging by managing our net cash from operating activities in order to focus on debt reduction, as deleveraging will continue to position us well for capital deployment for the right business acquisition opportunities. In terms of financial flexibility, I would like to conclude in highlighting that we extended the maturity of our $140 million senior credit facility from April 2026 to April 2027. We obtained good support from our banking partners as we remain well positioned for future growth. I will now pass it over to Paul for concluding remarks.

Thank you, Nicolas. As you can all see, our key indicators are moving in the right direction. We had record bookings and a return to sequential revenue growth. We had record gross margins and EBITDA as a percentage of revenue, and we had strong cash flow and a very complementary high-value acquisition. But the most important takeaway should be that the measurable progress in advancing the core pillars of our 3-year strategic plan. We will now open it up for questions. Emily?

[Operator Instructions] Your first question comes from Gavin Fairweather from Cormark.

Congrats on the strong results. Maybe we can just start on the bookings number. Obviously was impressive and quite strong, and you called out a bit of a rebound in banking and insurance. Maybe you can just discuss those sectors in particular, which I know had been a little bit slower for you and the momentum that you saw in the quarter and whether you think that is sustainable?

Yes, definitely, as we've talked in past quarters, there had been some headwinds in -- specifically in the Canadian banking market. We did see a rebound last quarter with some very positive bookings there. I think, as we go forward, the pipeline remains strong. I think there's a lot of uncertainties in the market. So we remain cautious, but continue to build on a pipeline that I think will generate some positive results in the future.

Great. And then maybe just on gross margins. We obviously have seen some nice strength on that front. I mean, how do you think about the gross margin trajectory from here? I mean, I know XRM Vision is accretive on that front. But if you start to see banking and insurance coming back, will that place a bit of a headwind on gross margins given that there could be more subcontracting in those sectors? How would you think about that?

Gavin, thanks for the question. If you go back to our strategic plan, I mean, the goal is to keep growing that. We're seeing it now, as Bernard was mentioning, in the mix of business and the new business that we're winning is higher gross margin. So I mean, that is the long-term goal and long-term trend that we're aiming. Our 3-year plan has us getting to 33% to 35%. So we think that's achievable within the next 3 years. So that's what we're pushing towards.

Got it. That's helpful. And then maybe we can just touch on competition. I think last quarter, you called out, I guess, some pricing pressure, in particular, in the government space. It looks like you've kind of walked away from some business there in terms of a little bit less revenue year-over-year in the quarter. Maybe you can discuss that sector and then also competitive dynamics that you're seeing elsewhere in terms of pricing trends or win rates.

Yes. Thanks, Gavin. As we look at the public sector, specifically a lot of our public sector businesses here in Quebec, we have remained disciplined on not chasing lower-margin business. So as things cool down in the market, we saw more competition in this market, and there was a lot of pressure on rates. And our focus has been on the profitable growth. So we've focused on those deals that were not just solely awarded to the lowest price vendor, but had a strong quality component and where we were able to differentiate. So kind of that second part of your question around competition, that has been driving the rate pressures. And I think our ability to remain disciplined and focus on those areas, where we differentiate with our quality of services and our capabilities has allowed us to continue to drive the margins that we're looking for. But there is a headwind on the volume of bookings because of that.

Yes. Yes. I mean, nice to see EBITDA basically sitting at a record despite that. Maybe just lastly for me on XRM Vision, you've had it in the fold for a few months here. Any kind of surprises or initial impressions, things which have proven to be better than expected or -- and integration into the business. Maybe provide a bit more of an update on that front, that would be helpful.

Nothing surprising. We're sticking to the plan, Gavin. I guess, everybody is kind of watching the radar screen of what's going to happen with the tariffs and everything. We don't see direct impacts to us, but some of our clients might be impacted down the road. But again, jury is out. Everybody has an opinion on it. So we're focusing on the things we control.

And the next question comes from Divya Goyal from Scotiabank.

I just wanted to get a little bit more color in terms of what is the longer-term plan for Canada. Like obviously, some of your peers have started seeing a little bit more positive momentum. You did notice positive bookings momentum last quarter on financial services sector. But given your strategic plan and the way things are going, where do you see Canada trending for yourself over the coming quarters?

Thanks for the question, Divya. So we saw growth in all of our geographies this past quarter. And then as Bernard was mentioning, a big chunk of that in financial services in Canada. So if you look at our long-term plan, our 3-year plan that we just -- we published and we're working towards, we expect growth in all of our geographies. However, we expect the U.S. to grow faster. So our type of business is not subject to the tariffs and everything that we're hearing, and then we're seeing -- we're seeing, as Bernard was saying, have a very strong funnel, and we're seeing a lot of opportunity out there. So I think we're at the beginning, and I mentioned this in the past, I think we're at the beginning of a trend of modernization of the larger, more legacy type systems, leveraging AI to modernize that. We have many proof of concepts ongoing in that area. So no, we're confident on the future.

That's perfect. And I just had one more question. If you could provide a little bit commentary on the broader consolidation trends across the Canadian technology services sector? And how do you see yourself positioned as an acquirer and a target over, say, the coming quarters? And that will be all for me.

Yes. It's been an interesting year. We track -- we're running out of comps to track. You all saw the last 2, 3, I guess, in the last quarter that privatized. So I guess, we're going to be one of the last Mohicans, as they say. We love our positioning. I think it just goes to show that our company is significantly undervalued compared to what's happening in the market. So I think it's a great investment opportunity. We're still finding -- if you look at the type of acquisitions we've done, like the one we recently completed, we are very good at finding what I would call the diamonds in the rough or the jewels out there that these niche companies that fit very well into our platform that we can position for growth. And that's how we found XRM. It was a mutual decision. They wanted to sell to us, and we wanted to buy them. So it was really a good -- a very good acquisition. There are many others like that out there. I think it's -- we put a lot of work into finding those and identifying those. We have a very healthy funnel. So I think there's going to be a lot of noise on the larger transactions, but I think there's still a lot of these smaller niche companies out there that are looking for a platform like ours to join and to expand because they can't do it alone. So I see it as a positive. I like being the last man standing.

And the next question comes from Jerome Dubreuil from Desjardins.

The first one, maybe for Nicolas, if you can maybe tell us maybe what are the key priorities you will be working on? What are the assessments you've been given? Wondering if there's any change in terms of the financial management of the company that we should be expecting?

Well, thank you, Jerome, for the question. So as I joined about 2 months ago, so I've had the chance to -- initially, I guess, my first priority for me was to really sort of learn on the business. I'm not from that industry. I've been in multiple industries, but it's been to learn and meet the people and meet and try to like see where the pockets of value are and where the growth opportunities are. In terms of my focus, like I had the chance to come in, like right after the company like disclosing 3-year plan. So I'm really going to essentially try to focus on those metrics, which is, first of all, focusing on the internal, like analytics and like financial planning analysis to make sure that we support the management and support the organic growth targets. So I guess that's what's going to be one big first priority for me. And obviously, the other part of the plan is the M&A growth that we've put forward. So I'm going to spend a lot of my time as well in terms of supporting the M&A. And then finally, obviously supporting the team here in terms of messaging to the financial community. So, like today, it's been quite a journey for me. I've sort of seen firsthand that there's quite a bit of opportunities ahead, and I'm pretty pleased to join the team and happy to speak to you all in the future.

Follow-up for me. You did mention that you still have one big client kind of affecting the year-on-year comparison that you have. But at the same time, you're reporting very good bookings in the quarter, very noticeable there. When should we be expecting that the big clients taking off will be lapping? Is this something that's going to be gradual or -- and then all at once? Or how should we be expecting this big contract to run off?

Thanks for the question, Jerome. And yes, this is a contract that ramped up over several quarters, and it peaked and then ramped down over several quarters. I think, we'll see the effects of it. Nicolas and I were looking through this earlier this week. Another couple of quarters of stuff. But we do have a pipeline around that, that we may see some bounce back on that as well. But from that original project, there's still another couple of quarters where we had declining revenues as that project ramped down. A very large project in our portfolio.

[Operator Instructions] And the next question comes from John Shao from National Bank.

I just want to ask about the lumpiness of the bookings, because it sounds like there are a couple of large deals this quarter. So in terms of the future bookings, should we expect a smooth recovery? Or should we still expect some fluctuation in the booking numbers on a sequential basis?

Yes. Thanks, John. So I should have mentioned it earlier. I usually always do in my speaking notes. If you look -- we published 2 numbers. We published the trailing 12 months and the quarterly for the simple reason that very often, we have these large projects that can swing a quarter one way or the other. So something that was supposed to be signed in December, so get signed in January. So our Q2 looks really bad and our Q3 looks really good. So you really have to look at it on a 12-month basis just because of different quarterly ends and depending on which software companies involved, like if we work with Oracle on a given project, they have a different year-end than Microsoft, or Amazon. So whenever there's a third-party involved, usually around their year-end, there are more projects being signed. So my recommendation is to look at this on a 12-month basis. I don't know, Bernard, if you want to add to that, but...

No.

That makes perfect sense. In terms of the -- those new bookings this quarter, how should we think about maybe the margin profile and whether your strong gross margin -- EBITDA margin could be maintained in the next 1 or 2 quarters?

Yes. No, I'd say, our focus has been on changing the mix of the work that we're going after. So our bookings aligned to that priority of going after higher-value services. So I think, our goal is to continue the trend. As Paul mentioned before, our gross margin target for a 3-year plan was 33% to 35%, and we're tracking to that. And the bookings that we have in our pipeline are supporting our priorities to get there.

Okay. And in terms of the future acquisitions, given the completion of the XRM, what are some of the areas of interest where we think the future acquisition could come from? In other words, like what are some of the capabilities you look to acquire or enhance?

So yes, thanks for the question. There are many. My recommendation is if you have a chance, it's on our website. We actually have our strategic plan. We published there, and we explain in a lot of detail, what we're looking for by geography, by business mix, by vertical, by technology. Really, I mean, we go to market by vertical, right? So we have a financial services practice, a manufacturing practice and so on and so forth. So we're in close conversation continually with our clients in terms of what they need and where they're going and where they see that, they need help in the strategic and mission-critical systems that they need to deploy. So for example, the ERP side. So every organization has an ERP, they have a need to renew it, improve it, leverage the data from it. So today, we're a premium partner to Microsoft and Oracle in some key verticals. There are other verticals that we could go in. There are complementary services around that, especially around leveraging the data. So the AI type stuff that we do. So again, a lot of opportunities there. We are not in SAP today. That would be an interesting area to get into. And a few others, I mean, that you know that are brand names out in the industry that our clients are looking for that we would be glad to add as a practice. So that's part of our shopping list. These are things that we're out there looking for and trying to get done for the right price.

Maybe one last question for me. I know, Paul, you mentioned that the tariff situation is not going to impact our business. That makes sense to me as well. But at the same time, I understand there's also an ongoing trend from a lot of Canadian like businesses to source from Canadian providers. Do you think that's going to create some growth tailwind for you?

I hope so. I hope so. I guess, you got to be careful with that, because we also have a very strong U.S. customer base and European customer base. So we like to believe we have a strong proximity model. So our local clients buy from our local people, and then we figure out how to deliver the best cost-effective way possible. So yes, whenever things like this happen, we've been through this in the past, and we've managed through it. So if it does -- if it helps us, all the better.

And we have a follow-up question from Jerome Dubreuil from Desjardins.

Just a follow-up, almost the same question as John, but more on the government side. We've been hearing governments talking about favoring more of the local suppliers. And correct me if I'm wrong, but I think your government business is much bigger in Canada than in the U.S. I'm wondering, if you've had maybe starting to hear some green shoots or maybe some easier conversations with your government counterparts. There are no worries. It's just the same answer as to John's questions.

I can give you some color, because I'm part of other -- unrelated to Alithya. I'm a member of QG100, which is an organization of CEOs here in Quebec, give you some color. I know, there are a lot of discussions between the business community and the local governments across Canada in terms of how to better use local companies. The speed at which they can do that, I mean, is anybody's guess, but there is some desire to -- but that would mean changing procurement laws, changing many things and how the government buys and how government agencies buy like Hydro-Quebec, for example, how they buy. I don't know, if you saw in the news this morning about changing construction codes, so you can use more wood for higher buildings. You go to the Scandinavian countries; they can build an 18-story building out of wood. So Canada is going to have a lot of excess wood with these tariffs. But in Quebec, for example, you're only allowed to do 5 stories. So they would have to change the construction code and the laws. So I think there's a desire. There's a lot of talk around it to change these things in many different jurisdictions. I think between the desire and the actual changes happening, we'll see. It's a lot simpler on the -- in the private sector of making those changes. Then again, maybe the tariff situation is going to be resolved in a few months and all that stuff goes away. So it's anybody's guess right now. But yes, there is some talk about that in many areas.

At this time, we have no other questions. I will now turn the conference back to Paul Raymond for any closing remarks.

Well, again, thank you, everyone, for joining us today. And I invite you, if you have any additional questions, not hesitate to reach out to Nicolas after the call. Thank you.

Ladies and gentlemen, this concludes the conference. You may now disconnect your lines.