Banca IFIS S.p.A. (IF) Earnings Call Transcript & Summary

Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the Banca IFIS First Half 2023 Results Conference Call. [Operator Instructions] At this time, I would like to turn the conference over to Frederik Geertman, CEO of Banca IFIS. Please go ahead.

Thank you, Madame, and good afternoon, everybody, and welcome to our third quarter 2023 results call. I'm joined this afternoon as usual, by our Investor Relations Executive, Martino Da Rio, and by our brand new CFO, Roberto Ferrari, who we welcome to the bank and to this call, and you might hear a little bit later on. I'll go straight to the presentation, Page 4, where we have the executive summary. So we have net income in third quarter of 2023 of EUR 34 million over 9 months, we posted EUR 125 million net income, that's plus 18% year-on-year. Loan loss provisions are at EUR 15 million. That includes EUR 6 million on a structured finance position that's gone to UTP. And we have stable management overlays at EUR 65 million present in the bank, untouched until now. The Board today deliberated to allocate the windfall tax to non-distributable reserves. So there is no consideration due. We are following the path that most banks in Italy are following. And we post a core Tier1 ratio at 15.5%, that's calculated, including the net income year-to-date, net of the interim dividend and net of the foreseeable dividend that we will pay in May. We have also deliberated in the board today, EUR 1.2 per share interim dividend to be paid on November 22. And the next dividend date is November 23, and the record date is November 21. So let's go into the buildup of these numbers. Page 5, net revenues. We have net revenues at EUR 164 million. That's, as you would expect in Q3, slightly lower than Q2, minus 5% due to the typical August seasonality. And if we look at the breakdown of the numbers in Q3, Commercial Banking revenues, EUR 84 million. excluding capital gains on equity and private equity investments that are a bit lumpy. The revenues would be stable Q-on-Q and would be up 7% year-on-year because in the previous quarters, we had a bit of contribution from those elements. NPL revenue is very resilient, EUR 66 million in Q3 despite the inflation and the rate scenario noncore G&A at EUR 40 million, confirming a recurrent and stable contribution to revenues. First 9 months revenues year-on-year, plus 5%. Commercial activity, Page 6, reflects the market and a bit of typical Q3 seasonality. So factoring turnover, the market did minus 4%. We did plus 2%, excluding the pharma portfolios we always do or remember that. We see some signs of macro slowdown, slightly lower invoices, slightly lower credit demand. We grow above market, and we're compensating those trends commercially. On the leasing side, new leasing equipment and technology, that's the underwriting market is minus 14%. We posted plus 3% year-on-year in the quarter. Since August, we saw some evidence of delays in CapEx decisions of SMEs we are expecting in Q4, maybe a little bit of assistance from the Sabatini law, the law that gives some tax incentives to CapEx. So we might have some leasing acceleration in Q4 dedicated to that. But as you see, we underwrite a little bit better than the market in equipment and technology. In automotive, the opposite is true. We have, in terms of underwriting, slightly less than a year ago. Market is still growing. Two reasons for that. One is focus on premium luxury segments and not volumes in combination with very rigorous price and margin discipline. Keep in mind, when we say that in Q3 2023, the average spread was 3.92%, and that's 30 basis points up year-on-year. So if you take a base rate increase of roughly 400 basis points on top of that, you see that this is quite an increase in price and enterprise, and we are maintaining that policy, as we said, because we want to protect margin rather than volumes. Page 7, NPL. Very good quarterly collections considering Q3. So we have once again EUR 100 million cash collection, 52 judicial, 48 tides. If we look at revenues, Q-on-Q slightly up versus Q2 and up EUR 3 million versus last year. So very resilient NPL portfolio. What we need to keep in mind there is, first of all, that on the extra judicial side, so the voluntary plans, we have seen some initial slowdown. We're expecting that to remain a little bit softer than the judicial side, and we're planning for that. And another thing to keep in mind is that we have for very modest profits, but still some profits, we sold some gross book value of sales of portfolio for, I would say, housekeeping purposes. But value integration costs will be booked upfront in the fourth quarter. Going to costs, Page 8, third quarter 2023, EUR 93 million. That's a very nice performance of the EUR 31 million that's exposed to inflation. So what's happening is that the bank is able in terms of managing both its consumption and the prices to offset inflation effects by contract renegotiation and demand management. We keep investing in IT and in the positioning of the bank in branding and advertising. So we have 23 million IT expenses year-to-date, and that's just the execution of the plan. Then we have minus EUR 7 million Q-on-Q linked to NPL recovery typical of the cost being shut down in August, so that's legal fees going down a bit. Finally, stable cost of personnel. Next year, that's expected to increase due to the renewal of the labor contract at the national level is quite well known. The rest of the difference between EUR 105 million and 93 million is connected to the Fed and FRF costs. I would take you to Page 9, asset quality. So we have provisions of EUR 50 million. We've stopped adding to the overlay. So that's stable at 65%. We have here some more normal, I would say, cost of risk that you would expect from a bank like us of EUR 50 million. We have one pretty large file where we took EUR 6 million, which was classified as UPP. As mentioned, the asset quality is protected by 1.2% of exposures, management overlay. It's one of the highest that we see in the system. In fact, it's a multiple of what we see in other institutions, this level of overlay. NPE ratios grows 6.1%, net 3.9 million. If we take out the past due of the final portfolio a well-known issue is 4.6% and 2.5%, respectively, not a lot to add there. We always get questions on macro. So on Page 10, we thought we would maybe share with you some data that can help us reflect on credit risk in the country. In this quarter too, we don't really see signs of macro credit risks materializing in our book. If you look at the payment days in factoring, you can see that we are actually below 2022 levels. So companies appear to be quite liquid. If you take a look at Stage 1 and Stage 2 loans, the mix, the Stage 2 is still at 8%, so we don't have a significant deterioration there. If we look bottom left, at the rating migrations, we see a very physiological mobility. So no rating deterioration within the clients. And if we look at the bottom right, the probability of default, it's really flattish. So no mix deterioration in the book. So all in all, it appears that even though we are witnessing a slowdown of growth, we're witnessing some contraction of industrial production in Germany, which is a key market for Italy. And as you can imagine, our SMEs are exposed to it. Even though we see these things, we read them in the macro statistics, there is no materialization yet of risk inside the bank's book. Page 11, funding. The plan that we have together to reimburse the TLTRO, which expires in September 2024 is being executed. We're slightly ahead of schedule. Remind you, we have EUR 2 billion TLTRO expiring, and we have a senior bond expiring in June. Here, you see Page 11 in the middle, the management actions that have been carried out. So remarketing of securitization notes of leasing books of the leasing book, ramp-up of the NPL unsecured portfolio of EUR 400 million, senior bond issue we executed in September 2023. We took a window, and we're quite happy that we took it, considering how the market developed afterwards. And finally, we remind you that we have 700 million bonds maturing, mostly dogs that we don't expect to reinvest. So if you add the ongoing management actions that we will still do in the coming months, and if you add that we have potentially 1 billion potential repos with institutional counterparties, which is currently being posted at the ECB against the TLTRO, you see that we have an encouraging situation in terms of the TLTRO repayment. And the available cash after the TLTRO repayment is projected north of EUR 1 billion Today, the available cash is EUR 1.7 billion. That's an extremely liquid situation for our bank, slightly inefficient obviously, but necessarily given the profile of next year and the repayment of the TLTRO. So this was according to plan. Page 12, capital ratios evolution. We add 52 basis points to the capital. So there you see the ability of the bank to generate profits. This is consistent with the new dividend policy. So what's not included here is the interim dividend that we deliberated to pay today in the Board. And what's also not added is the piece of foreseeable dividend that we expect to pay in May on the basis of the profits that we already made because as you can imagine, with EUR 124 million net profit, with the new policy, we would have paid out more than the amount that we did and the EUR 63 million interim dividend if we had applied it already. So we have a payout ratio in Q3 of 50.5%, but we're not computing the remaining piece into the CET1 ratio. And 13 and 14, a couple of considerations to round up. What's the bank doing? Well, the bank is executing its business plan, growing the core business, providing attractive dividends. You see the net income evolution of our bank from 2019 pre-COVID EUR 76 million core and EUR 47 million PPA. We posted EUR 133 million in 2022 with a little bit of PPA. We reiterate our guidance of EUR 160 million this year, of which only 8 are PPAs. So you can see the progression in terms of recurring industrial profits being generated, marginal reliance on extraordinary revenues, maintaining CapEx and OpEx investments to ensure operational excellence. We are a challenger bank. We need to be very good at what we do. If not, we would not be able to outrun the market. So we keep doing that, and that's both investments in tech and investments in the positioning of the bank. We reiterate the guidance, as we said, at EUR 160 million, which would mean that we delivered just like last year, the 2024 target a year in advance, new dividend policy if this would happen. So in case of confirmation of the guidance, which, of course, still needs to be executed. We would pay EUR 110 million, which would be in aggregate more than EUR 2 per share, EUR 63 million in interim dividend paid on November 22, and we've computed a potential dividend yield if the guidance would be met. And if we took the price as a reference of November 30, it is, yes, but you can work out the numbers based on the latest data. We have a dividend yield that's in excess of 12.5%. So by all means, relevant, dividend yield. Page 14, with a qualitative outlook, and I'm sure you will ask what's the macro scenario in Italy? So we have a GDP slowdown, in the presence of high interest rates and gradually reducing inflation. We expect corporates to be a bit more cautious on CapEx and loan demand. We're already seeing it. I mean, credit in the country is contracting. Admittedly, after a very, very significant credit distribution phase of all the banks, lots of companies taking money just to be safe given that it was so cheap and readily available. So credit is contracting. We expect and we're planning for increased cost of funding that's true in all channels, retail, institutional bonds. No sign as you saw of widespread asset quality deterioration. First anecdotal issues appearing. First, conversations of SMEs may be looking to reschedule some of that sporadic, but first elements appearing. So on the risk side, it's still an extremely benign scenario. I would say, probably because we still have a lot of liquidity in the market and in the companies. How the bank reacting in this scenario? Well, first of all, trivial, obviously, but focused on running the core business well, maintaining its investments in some transformation, continue the emphasis on short-term lending with attractive risk return ratios, so keeping the balance sheet short. I cannot stress this enough. I'd like the market to appreciate the fact that commercially, it would have been entirely possible to lend very significant amount in terms of long-term lending with government guarantees, 5 to 7 years' duration, locking of spreads, locking of rates, assumption of a refinancing risk. The bank did not do that. Our long-term lending approach has remained selective in terms of risk, demanding in terms of price. The combination of that leads to long-term lending with government guarantees that is not even EUR 1 billion, I think about EUR 700 million. And that is the philosophy of the bank. So we focus on factoring, we focus on short-term leasing, we don't do multiple leasing. We don't do real estate leasing. We don't do the longer stuff. We like to remain nimble also in terms of balance sheet structure. And that has consequences for liquidity, obviously, and for our risk profile. I can't stress that enough. We completed the funding requirements of the TLTRO payments in the sense that we're ahead of our plan, so we still need to execute a couple of things. But compared to where we are now, it's ahead of the plan that we have. For instance, the senior bond we would have issued it in Q4, I believe, according to the original plan, we did it in Q3 as soon as we saw the window. Management overlay is still there and CET1 increasing. So that's the way we approach this slightly more uncertain market situation that is ahead of us with a lot of confidence. This ends the formal part of the presentation. So I would stop here, and I would gladly take your questions together with Martino Da Rio and with Roberto Ferrari, who are here with me.

The first question is from Manuela Meroni of Intesa Sanpaolo.

The first one is on the asset quality, the overall asset quality of your loan book has been stable in this quarter. I'm wondering if you have seen some sign of the separation of the asset quality in some specific segments or punt? And what do you expect in terms of cost of risk in the fourth quarter 2023 and in 2024? The second question is on the cost of funding. The cost of funding can increase quite significantly during 2023. Is this increase in line with your estimates and your guidance? And how much do you expect in terms of cost of funds in the fourth quarter of this year and in 2024? And finally, could you please give us also the cost of deposits? So I guess that 33.1% TPA of 2023 is the overall cost of funding. So I'm wondering if you can just provide us with the cost of deposits. The third question is on the TLTRO. Thanks for providing us with your funding plan for the reimbursement of the TLTRO. It's clear that you have several ways to fund this repayment between bond issues, deposit repos and maturing the procurement bonds. So could you please elaborate a little bit on the split between the different source of funding for the repayment of the TLTRO? And if you plan to issue bonds in 2024 and finally, I'm wondering if you could consider to reimburse the TLTRO in advance compare the September 2024 maturity. The last question is on the NPL business. I saw no acquisition in the third quarter. It's clear that with the purchase of Revalea you already achieved your NPL acquisition target. But I'm wondering what are you seeing on the market just you do not have any appetite for NPL acquisitions or there is no market or you think that the market is too risky right now in the current environment?

So you started with a question on asset quality and what we expect. So we don't see, and it's quite hard to predict. A deterioration in terms of probability of default and new flows to default. So we're not seeing it, and it's kind of difficult to predict. What I would say is Q4, expect something similar to Q3, maybe slightly less, but something similar to Q3. Next year, it will really depend on 2 factors: one being the macro situation and how it develops. The other being what we do with the overlays because as you know, the overlays can't remain there indefinitely. The overlay they have a reason to be there. And the reason is that we were preparing for shocks after Ukraine supply chain, inflation shock, energy shock. As these shocks at some point, do not materialize, then at some point, you have to ask yourself what the justification for the overlays. So there, we have an element that will contribute 2024 will contribute in a positive way, obviously, if we're going to touch it. So I'll stay away from making specific forecast on 2024. We haven't done the budget yet, and we prefer not to be so specific because it's also really difficult. But what I would say about Q4 is expect something similar to Q3. And in 2024, we don't expect a horrible scenario at all. But we would expect you to the slowdown the normalization of cost of risk. We have been saying this for quarters. We have been saying this, I think, for a year now. And every quarter, we keep finding that the problems aren't materializing yet. But that's not a prediction. It's just a statement that until now, we seem to be in displays where we don't have neither in is nor in other banks in Italy, the real credit risk issues appearing. Cost of funding. Is it in line with expectations? I will say a few things, and then I will let our new CFO, make a comment. So also, it's a way to make you here in an his new role. If you ask me in line with expectations at the start of the year, I would say no, worse than that because at the start of the year, we were expecting the aggregates, interest costs, interest rate expenses to increase by, I think it was 2.5, 2.7, roughly. What's happening is that they're increasing by more than threefold. If you ask me if it's in line with the expectations we had last quarter yes, because as the year went on, we mature review obviously on the conditions. And so we feel in control of it. But I think the increase has been faster than we had imagined a year ago, for sure.

Yes, in terms of cost of funding, we do expect on the last quarter of 2023 to be in the area of 3.3%. And now our planning of 2024, we do expect our average cost of funding to be close to 3.6%. And on trend mass, where we have a cost that is close to 2%. On short-term deposits that are 25% of the total amount, we are still around 1%. So actually, the cost is still much lower than the severe. What is our strategy in terms of the repayment? It is important to say that we already have EUR 1.7 billion unencumbered capacity, posted unencumbered capacity would be higher than EUR 2 billion, so we have plenty of room also to define the strategy. We are working to increase the retail and corporate deposits. Clearly, we are competing with big banks where the cost of funding is still very low. So we are trying to actually to increase this source of funding. And also, we are planning to issue a senior bond next year, clearly subject to market conditions, but actually, we are very, very flexible to actually exploit window of opportunities.

I'll go to your third question, Manuela. So you're asking a bit of details on the bonds curing and the repayment strategy if I heard it correctly. So as I confirm, we have about EUR 700 million proprietary portfolio maturing by September 24. We don't expect to reinvest that, we're going to contribute to the TLTRO repayment. We expect to further increase the retail funding, yes, that's ongoing, slow level of build up slowly but surely, a couple of hundred million is probably going to come in there. We want to go with a reasonable pace because we don't want to be the price leader in terms of retail funding, it would be unwise for us given our size. Roberto already mentioned to you, yes, market if the market conditions are right, we might issue a senior bond, but we don't really have to strictly, but definitely, we like to be an issuer. So we will keep exploring that. Would we repay the TLTRO in advance, we might repay some in advance. Don't expect the bulk of it to go in advance. We might repay some of [indiscernible] it's really tactical. Let me give you an addition after just thought that part of the carry of the govies today is negative. So part of the stuff that expires was yielding rates that are below the 4% that we would get a DCB, so you can see that having EUR 1.7 billion of cash, additional govies maturing at some point, it might become economically beneficial to we pay a bit of TLTRO and advancing us one of the earlier windows, but do not expect most of it to happen before the transaction before the September 24 deadline. NPL business. You asked about our appetite and what the market looks like. So we see in market. We have a report as you probably know [indiscernible]. We gave a lot of insight there and how we see the market. So we expect the market to decrease a little bit from EUR 30 billion to EUR 20 billion roughly of transactions per year on aggregate with an increase of the secondary market, a decrease of the primary market, obviously, given that most banks have significantly delevered already. So those stocks have been fundamentally transferred to a large extent. Secondary market is actually quite attractive for us because prices are very good there. So that's not in itself of that thing. Secondary markets driven by, for instance, gas-backed portfolios that underperformed as many today are underperforming. So they want us to do something to support their business plan. Sales by players who historically are buyers, including us, by the way. You see that we sell those of portfolios so slightly more a mosaic in the market. You asked about the Revalea I believe that I heard you ask about Revalea, so Revalea, we did the closing on October 31. Revalea is going to contribute in 2023, roughly EUR 6 million revenues, roughly same amount of costs, and we're going to book some integration costs upfront to the tune of roughly EUR 10 million. So as we like to upfront costs and have benefits that appear later expect us in Q4 to have a net minus EUR 10 million impact and that's reflected in the guidance.

The next question is from Irene Rossetto of KBW Inc.

Yes, hello, we wean -- 2 questions also from my side. The first is we confirm the guidance of EUR 60 million for 2023, with the rising profitability trend, EUR 90 million in H1 and 70 million H2. Can you consider the EUR 160 million of peak earnings from the third quarter? Do you confirm 7 for net income of EUR 16 million. The second is on first revenues that substantially flat year-on both in commercial banking and NPL. What is the reason of this trend? Then what was your expected the evolution of operating costs in 2024? And finally, do you sell a godown loan demand, and if yes, in which segment?

So yes, guidance of EUR 160 million profitability trend also given the Revalea impact, which in Q4 with reaching Q4 is negative, so a decrease in trend in terms of first half and second half, I confirm. So for next year, we're not touching the net income target of 2024 yet. As you know, the year 3 of the business plan had EUR 160 million as a target. It's premature to revise it in our opinion. We are currently working out the numbers and there are actually a lot of moving parts on this. Let me say a few things that will add positively and a few things that will contribute negatively, and you will see that it's really a bit early to touch the guidance for 2024, which is 3 of the business plan. So for now, I would say quite clearly that the target remains at 160 million. What are the upside risks? Well, Revalea is going to contribute. We have the negative carry of the part of the portfolio that's maturing of the proprietary portfolio that's maturing that's going to contribute. We have efficiency gains from all the investments that we made in digitalization and efficiency and effectiveness, I would say. So I expect some commercial impact on a number of projects that can be felt. We have the overlay so all those are things that are going to help us in a scenario in which cost of funding might still increase a little bit. Nothing as dramatic as this year, remotely, obviously, maybe a bit of asset quality cost due to the slowdown, the impact of the new labor contract on personnel costs, that's a negative. So you see it's a balancing act. We haven't done the math fully and therefore I can't communicate a lot more. So I would just reiterate that for now the year 3 business plan target stands and we will get back to it in the beginning of 2024. Revenues being flat each year-on-year. Well, you see what happens is you have an increase in the rate scenario that in the first quarters, mostly impacts the asset side and then more slowly impact the liability side. So what we're seeing now is the gradual increase in cost of funding as we had the positive impact of rates pickup, which preceded that. In the NPL markets mature, but still very profitable, lower formation of NPL, so focus on efficiency, but that's probably for specialists like us, that's not bad. So what would I expect in terms of revenue development, the growth that the bank showed in the years '22 and the first half of '23? That's what you can expect to slow down significantly. So yes, expect a much flatter trend in terms of revenues. And of course, commercially, we will do, given that we have capital and that we have liquidity, we will do, obviously, the management actions that can help to keep the revenues as healthy as possible. Cost evolution. Well, we have first of all, the contract negotiation going on. That's very likely going to yield an increase of personnel costs. We are quite successful at offsetting the inflation, as you saw. We have quite a lot of variable costs that are part of our transition strategy with our transformation strategy, and we expect to be able to continue financing this type of investment in the core business. So evolution of operating costs, I would say, flat to modest increase given the external factors that are in play. Do you see a slowdown in loan demand? Well, it's there. You can see it in the national statistics. Credit in Italy is contracting across most sectors. We see that the spectrum turnover is holding up very nicely, but the companies are actually paying quite early. So in terms of our loan stock is not growing as much as the turnover would suggest. We don't expect a huge CapEx boost supporting leasing. We might have in Q4 a little bit of acceleration due to the tax incentives, but nothing structural. So a slowdown in loan demand, yes. But keep in mind, this is a challenger bank. So we always have the market share and the tactical the tactical reaction to the situation. We're not a bank that had such a large market share in the country that you somehow reflect the economy, thankfully. So yes, slowdown in loan demand. Is it necessarily something that will reflect itself in the size of our balance sheet, I don't think so. We can react thankfully. It's one of the advantages of being a challenger.

Next question is from Simonetta Chiriotti of Mediobanca.

A few questions on the NPL segment. The first is on the contribution of Revalea in 2024. So if you could give us an indication of the growth that could come from the integration of this [indiscernible] portfolio. Second is on, you mentioned that extrajudicial settlements are, well, slowing down? Do you expect this slowdown to be even stronger in 2024? And finally, on the proposals that we found from time to time reading the newspapers like to change a legislative proposal on NPL that we have seen very different things. It has been denied by some representatives of the government, but it was on the paper also today in a different form. So I would like to have your view on this issue.

So if I read you correctly or hear you correctly, the first question was Revalea in 2024. So I think what it will contribute to the P&L is accounting-wise, as we integrate and merge it, as we put the loans on our book and on our models and as we maybe look at some pieces of the portfolio that we made this card, salon, etc. I would not want to make a prediction of the exact contribution of the Revalea acquisition in 2024. What I would say is just because we think there's value there that you should probably take into account anywhere between EUR 5 million and EUR 10 million pretax profit of contribution in one way or another. Out of a mix of things that are going to happen because accounting-wise, as we do the integration, there are going to be a lot of moving parts. There's going to be CapEx for the integration. There's going to be the portfolio put on our models. There's going to be maybe some follow-up transaction. I would keep a broad indication in 2024 of a positive initial contribution. Of what we think in any case is in the medium to long term, a very good transaction for our bank. We will be much more precise at the end of 2024 once we have the portfolio on our models, once we have our recovery approach, especially in the judicial part, which we will put in house, we will have that solid and will be market size then. Extrajudicial slowdown, yes, some slowdown but by all means, it didn't stop. It's the mix is growing slightly more towards the judicial than towards extrajudicial. I think it's 2 effects. One is inflation. I have to assume that if you take the more vulnerable part of the population and you apply food price increases to them that they will have, at the end of the month, a bit less for the voluntary repayment plan. So I think part of it is inflation, but inflation is receding. In fact, inflation is expected to go back to very moderate levels. Another fact is that slightly older portfolios, but on the secondary market, you buy them for a lot less, but they also tend to be a little bit less prone to extrajudicial recovery because, let's put it this way, the debtors have probably already been contacted previously about their ability to repay. So there, too, it's probably a little bit also a question of mix of what we've been buying. Do I see a further impact of the mix effect? No. So all in all, I would say there is no reason to assume that the extrajudicial parts come to further slowdown. It's just probably a slightly different mix that we have to get accustomed to in the recovery and the cash collection. That's how I would phrase it, and it's about as far as I would go in terms of predictions. NPL law. Well, we have to be careful if we comment this because obviously, we are not the government, and we are not parliament so I can't speak for executions that decide. From what has been said in the media and you've read it like we have, that law is not currently on the table. It is possible that some variance might be proposed, but in completely different terms and with great care not to damage the NPL market. So I think we're looking at something that's going to have a very similar trajectory that the tax had, the windfall tax. Over the summer when the first ideas were floated, we were thinking about tens of millions of euros of impact on a bank like us. We've now approved Q3 numbers with zero impact because we brought it to capital. So there was a bit of uncertainty and that's never helpful but it ended in a harmless way for us. And I think we can assume, once again, so I want to speak respectfully about things that are the government and parliament to decide and not us, but I think we can assume on the NPL side that the same has happened. I'm using the past tense. So not expecting any issues on NPLs in terms of legal framework.

Gentlemen, there are no more questions at this time.

Thank you very much. In that case, also on behalf of my team who's here, we hope it was useful. Martino, as you know, available always for additional questions. And we will be in touch again, I think, at the full year results, hopefully, with the guidance delivered. Thank you very much.

Ladies and gentlemen, thank you for joining the conference now over. You may disconnect your telephone.