Fourlis Holdings S.A. (FOYRK) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you for standing by. I'm Costantino, your Chorus Call operator. Welcome, and thank you for joining the Fourlis conference call to present and discuss the first half fiscal year 2021 financial results. We have with us today Mr. Vasileios Fourlis, Chairman of the Board of Directors; Mr. Apostolos Petalas, CEO; and Mr. George Alevizos, CFO. [Operator Instructions] The conference is being recorded. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Fourlis. Mr. Fourlis, you may now proceed.

Thank you very much. Good evening, ladies and gentlemen, and thank you for your attendance. As it is obvious from our results, the group is slowly and steadily bouncing back from the initial and severe consequences of the pandemic. We are cautiously optimistic that the recovery will continue. Additionally, our expansion plan and our continuous investments in systems and people, place us in a unique position to take advantage of the market comeback. Specifically, the next 4 years, IKEA is planning to open 4 new medium-sized stores, 5 city stores and continue the upgrade of its e-commerce infrastructure. INTERSPORT is making major e-commerce investments in logistics and also upgrading our network and customer service infrastructure. Before passing to Mr. Apostolos Petalas for analyzing our first half results more, I'd like to make some extra comments regarding our new activity in the real estate sector through Trade Estates Real Estates Investment Company or IR as it is called in Greek. Since July 12, 2021, Trade Estates has been operational and approved with management and functioning BOD. The focus of our IR of Trade Estates is on big box retail and supply chain infrastructure, e-commerce included. We have a lot of experience in these categories and we will play a leading role in Greece and the surrounding countries. The initial gross asset value of EUR 185 million and net asset value of EUR 175 million, give us a leverage potential of minimum EUR 150 million in additional debt, which will be used before the IPO during the next 12 to 18 months. We have a signed pipeline of close to EUR 200 million and plans and discussions for additional EUR 100 million projects. Thus, by the IPO, we will have a gross asset value plus pipeline totaling approximately EUR 0.5 billion. Also, by that time, for lease-operated businesses will be a minority in the total tenant mix. The focused nature of our REIC gives us the ability to have streamlined operations, thus streamlined operating expenses, thus higher net profitability than the market average. We are creating a streamlined, strategically-focused real estate investment company that will operate in an independent fashion but at the same time, add value to our group through its various projects. And now I am passing to Mr. Apostolos Petalas, our Group CEO, for more information on our first year -- on our first half year results. Thank you.

Thank you, Vasileios. Well, evidently, from the pandemic point of view, the first half was really much more challenging than we expected. We had several periods of lockdowns. And during the course of the semester, we had significant limitations in the visitorship in our physical stores. Here, restaurants were closed throughout the semester actually. And from the geographic perspective, most shipping restrictions -- shopping restrictions were imposed in Greece compared with other countries. And for that reason, our performance outside Greece was really exceptional, but also in Greece was better than we expected. So looking to the first semester results versus a year ago, we grew our sales by 16%. And actually, that reflects an increase in both of our concepts, about 139 in the sporting goods business and 105 in our IKEA business. Even if we compare the sales performance of the first half versus 2019 was -- which was a normal year and that may be the best year in our retail history, our index was 90. Now of course, the drivers of this, I would say, good performance in sales, given the circumstances, were a number starting from our online capabilities. The last several years, especially the last 2 years, we are increasing our capability and we're developing our systems and our organization and our logistics and our last miles in order to increase online performance. And for the first half of the year, about 23% of the total sales arrived from the online sales, namely EUR 43.5 million. But another element that really proved very exceptional for our group was the agility of our people to really adjust fast in the changing environment with lockdowns or click away or click into the store or online only, et cetera, et cetera, et cetera. Now also the logistic capabilities that we have developed the last several years were very beneficial in our efforts to really cover the needs of the consumers. We are blessed to have great global partners, IKEA International, Nike, adidas, all of them were very supportive to us for their supply chain management. So during the course of that period, we never faced significant issues in terms of our ability to service from the out-of-stock perspective. And also, we have to recognize that as several activities in the life of people was completely closed, like in the payment, traveling, et cetera, et cetera, maybe our sectors were benefiting from that, especially the sporting goods sector. Now looking to the gross margin. Overall, we really achieved a healthy gross margin, about 42.1%, flat versus a year ago, and about 1.2% below 2019. The only exception in that period was IKEA during the month of June, where we did after the opening of the stores and the significant restrictions imposed, we did really a campaign that was followed by extraordinary promotions in the month of June that helped our visitorship, but it put some pressure in the IKEA gross margin for the -- for us. It was about 1% lower for the semester in IKEA. But again, I want to emphasize that, that was a one-off. From July onwards, the gross margin in our IKEA business was back to the very healthy levels again. In INTERSPORT, you have seen we increased our gross margin during that period versus a year ago by also 1%. And yes, as you know, online sales normally have a little bit lower margin, of course, equally good EBITDA performance, but on the gross margin line, as consumers online look more for promo activities that reflects and translates to some pressure on the margin. Now the line that we really did exceptionally good was the operating expenses line. We realized versus a normal semester about EUR 14 million in operating expenses savings mostly as a result of subsidy programs, especially from the Greek government for leasings and for labor for those employees that were out of operations during the lockdown periods. Another big project that I will talk a little bit later, very important for the long run of our business was the project to rightsize our IKEA stores in Larissa and Ioannina. During the course of the semester, we did materialize a voluntary program for employees to reduce the number of employees in those 2 stores by 100 heads, and that cost us EUR 2.3 million that is reflected in the operating expenses line of the semester. And this is a one-off that will start giving the payback from the 1st of July. So that project was completed in terms of the voluntary headcount reduction program. And now we are in the process of doing the construction part of the stores. As you know, effective January 1, 2021, we also had a change in our accounting process. So the credit card fee from this year is part of the operating expenses line. And certainly, that also need to be in perspective -- in some perspective one if somebody compares year-on-year numbers. Now overall, we have to recognize, though, that this semester was benefited by some, I would say, nonrecurring savings in the operating expenses line by about EUR 10 million to EUR 12 million as a result of the special subsidies from the government. Now our EBITDA, operating EBITDA was EUR 13.3 million, index 253 versus a year ago. And if you look at the EBIT line, our EBIT line was EUR 8.6 million, and that line compares not much better versus a year ago, but if you compare any EBIT line for our first semester in the last 6 years for our group. The financial expenses were flattish, although our gross debt is significantly higher, and this is the result of the substantial reduction in the cost of debt for us. Now all in all, our PBT was positive in the first semester, EUR 0.9 million, about EUR 9.2 million better versus a year ago. Now looking to the net debt. The net debt was really exceptionally good as reported, EUR 95.9 million, but one has to take into consideration that as a result of special settlements during the lockdown period with IKEA International as well as from the benefits offered by the Greek government, we have about EUR 43.5 million deferred payments in working capital. So if we take that into consideration, our net debt for the time -- for that time would have been EUR 140 million, which is not abnormal because the reasonable level of net debt for us, given the seasonality of our business for that period is around EUR 135 million. Now this is pretty much our performance in the first semester. July and August that followed that period was really in line with our expectations or maybe a little bit better than our expectations, and we do have challenging expectations for the remaining of the period. Of course, we do not anticipate significant restrictions or lockdowns for the remaining of the year. Now we opened last week, actually, the IKEA restaurants across the region, but also very very strict [Audio Gap] fully vaccinated people can be -- can enter the IKEA restaurants in our operation for the time being. And we believe that this will continue in the foreseeable future. We are optimistic about the second half of 2021. Following the good performance in July and August, we see that although vaccination process has been slowed down a little bit, is still improving. It looks like the touristic industry is smiling our countries. Greece -- especially Greece and Cyprus experienced better touristic rates versus the expectation, and that will help the economy for sure. It will create jobs and incomes. The European recovery fund is also in place. As you know, in Greece, the first installment was realized during July, and we believe that we will be seeing more installments and improvement in the economy from that source. The bank deposits are also reported increased versus normal period. So that means there is cash availability for the households. And most importantly, we are very, very confident about our ability, our organization's ability and capability to operate in this challenging environment and really deliver exceptional customer service to our consumers. Of course, there are threats as we go. The Delta version of COVID, it is increasing in terms of infections, and that is something that really is worrying us. There are some supply chain issues. I mean, supply chain issues that are in many respects in the Western world, especially from Asia. We did expect some issues in that. But at this stage, those issues are a little bit higher, although we have commitments from IKEA International, Nike and adidas and the big suppliers of ours that this issue will be easing as we go for the remaining of the year. So the fact that we had a significant improvement in our PBT by EUR 9.2 million in the first half and we look for another good improvement versus a year ago in the second half. We are really optimistic, and we are preparing from now for a much, much stronger 2022. It is important to notice that our key projects, strategic projects are progressing quite well. I already referred to the rightsizing of the 2 IKEA stores. The cost-saving project was completed in the first semester. We completed also the drawing and the licensing for the construction part of the 2 stores. Those 2 stores actually will be reduced by half in terms of size. And certainly, that will impact significantly the operating expenses. Also, our projects to rationalize the operation of INTERSPORT in Turkey. With all the challenges that we experienced the last several years, and we're still experiencing, is also progressing quite well. We closed about 10 stores so far in Turkey. We plan to close 1 or 2 more in the remaining of the year. And for the stores that are in place, we already agreed very special terms. And also, we look in Turkey some improvement -- I would say, substantial improvement in terms of sales per square meter in all of the remaining stores. And this is, again, the result of our ability to operate the concept in a very challenging economic environment. In addition to that, we launched e-commerce sales in Turkey, and this is the another 1 store already, although we did that about 3 months ago. Our retail expansion program is also in good progress. We opened 3 new INTERSPORT stores, including 1 outlet during the course of the first semester, and we plan to open 2 new INTERSPORT stores in the remaining of the year, 1 in Bulgaria and 1 in Cyprus. We also are in the process of refurbishing in an impressive manner with several digital capabilities 12 INTERSPORT stores here in Greece and some stores outside Greece. And the other plan for -- to open 2 small IKEA stores in 2021 is in good progress as well. In 2 weeks from now, the small IKEA store in Sofia, Bulgaria will open its doors, downtown Sofia. And before the end of the year, most likely in November, we will open the store in the best performing mall in Greece, the Athens Mall as we announced yesterday. The logistics project that will help us increase the automation, the efficiency and the capacity of our logistics system is also under development. It is a project that will cost us in total EUR 11 million for our sporting goods and EUR 3 million for the IKEA operation is in very good progress. The sporting goods operations will be up and running actually before the end of this year. And as Vasileios stated, our real estate company, Trade Estates is up and running as of 12th of July. And certainly, this project, the real estate company, will benefit our group in the middle and long run, as Vasileios stated, again, in many respects from the profitability point of view, cash flow point of view and also from our strategic expansion point of view. So with that, I would like to thank you, and we will give you the floor to you for questions and answers.

[Operator Instructions] The first question is from the line of Draziotis, Stamatios with Eurobank Equities.

A couple, if may, please. Firstly, on free cash flow, which was very strong in the second quarter. You talked about the deferred payments, obviously boosting working capital. I was just wondering what all this means for the remainder of the year? And where you're seeing this shaping this year. So effectively, I'm asking which [indiscernible] would you feel that underlying free cash flow can mitigate the drag from the reversal of the deferred payments? And the second question, it's interesting because looking at your Q2 performance, you actually managed to deliver EUR 1 million higher EBITDA than in the second quarter of 2019 on the same sales base, of course, on lower gross margins. So OpEx were lower than in the second quarter of 2019. Just wondering aside the underlying cost containment, what exactly was the amount of nonrecurring items affecting the second quarter OpEx specifically, please, so that we can see the extent of the underlying cost base in the second quarter.

Okay. Stamatios, in terms of the working capital deferrals, this amount was EUR 43.5 million by the end of June of 2021. And the majority of that is related with our IKEA business. Now if there is no other lockdown during the course of the year, this amount will be fully paid until the end of the year because the agreement with IKEA is that from the month that is no lockdown, we will pay the entire amount in 6 equal installments. Now if there is lockdown, the whole amount will be postponed for next year. But we assume and we wish that there is no lockdown period for the remaining of the year. Now we can give you an estimate for the year-end, but that reflects sales performance for the remaining of the year, yes? So I mean, we cannot assess exactly the sales, but we do not anticipate for the operation of Fourlis retail substantial change versus a normal year by the end of this year in terms of cash flow, again, assuming some sales expectations for the second half. Now we do not anticipate any nonrecurring cost operating expenses savings for the second half of the year because we do not anticipate any subsidy or any sort of labor subsidy or leasing subsidy from any of the governments that we -- so for us, it's business as usual.

Great. And...

Second quarter, or second, I'm sorry.

With regard to the second quarter, yes, well, it's...

Okay. Well, the total subsidy we received during the semester was EUR 12 million, EUR 8 million in the first quarter and EUR 4 million in the second quarter.

And if Apostolos, if I'm not wrong, we anticipate a net debt close to EUR 130 million by...

Yes, EUR 130 million to EUR 135 million. But again, that reflects sales performance of a certain level for the second half of the year.

Including -- my understanding, this is your projection is pretty much in sync with what you had in mind like a few months ago, if I remember correctly.

Yes.

That's correct. That's correct.

No change. No change. No change.

That's correct.

Yes. No change.

That's great. And just wondering, I mean, I guess no one knows exactly what will happen with the development regarding the pandemic and the extent to which winter will affect consumer behavior or whatever. But just wondering, you actually managed to have -- to get to well, close to normal top line in the second quarter based on what you've been -- well, what you've been seeing, let's say, in -- so far in July and August. Is there other trends similar or broadly similar in the third quarter?

Well, the reality is that the situation of the economies of the market and even from the restrictions in terms of shopping are not normal, yes. But despite that, we do everything possible through our physical stores and online operation to really achieve 2019. But again, it's not a comparable situation. Even the economy is not the same like 2019. I mean, the countries we operate experienced a decline in GDP versus 2019 of 7%, 8%, so the market is not the same. But for us, this is the objective. This is the target.

[Operator Instructions] The next question is from the line of [indiscernible] Securities.

I was just wondering if you have identified any third pillars of your future retail growth, either in the existing businesses that you operate that is athletic sport goods or furniture through IKEA or in third pillar and third sector perhaps?

Right. Thank you for that. As I have mentioned in the past, since our divestment from the electrical appliances, our intention was and still is to develop a third retail pillar besides the 2 existing ones and the new activity of real estate. So we are working on that, and we hope that quite soon we will have certain results. It's just that something that can -- that is not ready to be announced yet.

The next question is from the line of Memisoglu, Osman with Ambrosia Capital.

Just wanted to follow up on your comments regarding July and August sales. Where are they versus 2019? That's my first question. And then regarding competitive environment, I appreciate it's quite soon after the reopening relatively. But any color there? And was that a reason why you introduced the promotions in June. Just wanted to get a bit more behind the rationale for IKEA?

Okay. Well, I mean, having the stores closed almost until April, certainly, some of the shopping moved to the next month, June, July and August. So in June -- in July and August, we really got very, very close to 2019 figures. But I mean, we cannot anticipate that, that will be the situation until the end of the year. So for those 2 months, yes, we reached actually that levels. Of course, one have to take into consideration the seasonality level. September itself as a market is very high compared with July and August and is critical for the third quarter. So I think a good indication as to how the year will evolve in September and October. Now for the extraordinary promo, well, the IKEA stores were closed. In fact, there were some significant restrictions for the visitors when the stores opened. And I mean, just to give you an example, for every 50 square meters in an IKEA store, we could only have one consumer. Normally, we have 10 for every 50 square meters. So -- but the low set one. And also, the restaurants were by low, closed. As a result of that, we wanted to really motivate significantly our visitors, our consumers to start visiting IKEA despite the significant restrictions. So for that reason, we organized the campaign, and we gave very good reasons for the consumers to get in. And several of them came in. Of course, financially, that cost us. That cost us about EUR 700,000 to EUR 800,000. But that -- the benefit of that, we looked in July and August when the visitorship was increased substantially. So it was a one-off promo.

If I may, I'd like to add a point that is quite significant in the development of IKEA sales this year. IKEA was really handicapped compared to INTERSPORT in the sense that all the restrictions applied in excess to the larger stores, as Mr. Petalas said. In addition, as Mr. Petalas said, the food court has been closed, but one important point also is the shortage in certain products due to the backlog from the Far East. This situation, as you know, is valid, not just for IKEA, but for many durables retailers. And we believe that in 2022, this situation will be alleviated to a large degree -- will be improved to a large degree.

Just add on my previous comment, the promotion of IKEA in Greece and Cyprus in June, it was a 1-month event. I mean July 1, we went back to the normal situation. And actually, the realized margin in July and August was business as usual.

Got it. And any comment you can share on your market share trends lately on both?

Well, because of the distortion of the market and the pandemic and the online and the -- I mean, very low visibility of really reliable data. At this stage, we cannot assess what...

The end of the year. Yes.

Maybe by the end of the year, we can have better figures. Our feeling, though, is that this year, the market is better than last year. And of course, evidently, that is part of our performance. I mean, INTERSPORT was plus 40% versus a year ago. Of course, a big portion of that reflects market improvement, but we cannot say figures at this stage.

The next question is from the line of [ Lee May with Neon Capital ].

Hello, can you hear me?

Yes.

Sorry, just going back to the real estate, the new real estate business. Can you talk about how much more rightsizing of your existing IKEA stores will potentially contribute additional real estate space for the new company to develop this investment income versus what you have? Or is it just potentially what you have on hand after the previous years of closures?

Right. No. There is no more rightsizing to take place. It's just a minimal space that will be freed in the Northwestern Greece but it is not significant. It's the [indiscernible] store. It's a nonsignificant space. So I would not say that we have in front of us an important factor in that sense.

Okay. And also, you mentioned that you are planning to opening up another 4 stores. We've seen around -- globally, basically, some of the IKEA format stores are significantly smaller, as you probably know, right? They're really kind of small showrooms and they heavily rely on building the online business from the catalog. Can you give us a sense of the change in the square meter format for the new stores?

Sure, sure. Let me give you just a summary on the sizing of the stores. Traditionally, most IKEA stores were between 25,000 and 35,000 square meters. This format is still valid for large customer areas. The new formats that are being introduced are the medium-sized stores, stores that are between 8,000 and 15,000 square meters. In these stores, the selling area and the restaurant is more or less the same as the large ones. However, they do not have large self-serve warehouses because of the omnichannel design. And the third type of stores are the city stores, which are more or less showrooms, as you mentioned, but also selling certain small items. Now what I said before was that we are planning to open 4 medium-sized stores, in medium-sized cities in Greece and abroad plus another 5 city sized stores. Is that clear?

Yes, it is.

The next question is from the line of Achilles Porfyris Hellenic-American Securities.

First of all, I would like to congratulate the management for the great results. And another thing is that you guys know exactly what you do. I have been asked to ask you this question, which is a little bit out of the ordinary, and it has to do with the future. [ Marko ] a great mathematician have said that the future depends on the past through present. And if we take that under consideration, I would like to ask you how do you guys see the management, the group revenues in 3, 5 and 10 years, briefly in a very short answer, if it's possible?

Much better. You said a very short answer. So -- it's a short answer, much better. No, I'm just joking. Of course, thank you for the question. Listen, we live in a very fluid and fast-changing world. And the changes between e-commerce, physical stores, omnichannel is something that we're going to see in front of us. So what we are trying to do is to keep up with the development, the development of technology, the development of data management, in order to be able to foresee where the consumer is going to end up. At this point, taking into account what we learned from our suppliers, from our partners, we believe that the next 5 years is going to be a combination of physical and online stores. But it's something that it's easier said than done to really have a seamless journey for the consumer. There's a lot of work to be done. But we believe that we will be successful. And we hope that we will be on the winning part of this market. That's all I can say.

[Operator Instructions] The next question is from the line of Polycarpou Polys with ResearchGreece.

You mentioned sourcing that you expect things to get better in 2022. Can you please elaborate on that? And why do you expect that to happen?

That's a very good question. As you know, there are huge backlogs in Chinese harbors. And the supply chain problem is globally very severe. The reason why I mentioned that about IKEA is because IKEA has very high leverage with all the transporters. And from what we know and from what we have been informed is that a lot of actions are taking place at this point so that the specific IKEA backlogs are alleviated in 2022. Now this is what we believe. This is what we have been informed. And we hope that it will be the case.

Okay. So with the group basically buying directly, let's say, from IKEA, have you seen any price increases with regards to your products as we speak today or let's say, in the next shipments to come through?

Well, actually, we have been informed from IKEA International that all this commodity pricing and the transport increase in terms of cost will not affect IKEA for the next 12 months. I mean the IKEA retailers will not affect. Of course, it is affecting IKEA International. But they are trying to find ways to make sure that the affordability to the consumers will continue. And IKEA will have a benefit from this ability to really keep the prices as low as possible, which is part of the concept. So we do not anticipate for the next 12 months substantial increases in the costs based on what IKEA has been informed to us already.

We do not want to underestimate the fact that globally, we see inflationary trends. And we see also energy, we see transportation, we will see law materials. I understand your question. But what we can say up to now is that the communication with IKEA for the next 12 months is what Apostolos was mentioning.

Okay. That's clear. And I have a last question, sorry for that. The net debt guidance of around EUR 130 million for this year, does it include the, let's say, a normalization of your relationship with IKEA over the next 3 to 6 months? I mean, basically, shops not closing down again?

Yes. It includes the normalization, of course. So it's not over and above. It includes the normalization. And also, I have to say it includes roughly between EUR 5 million and EUR 10 million that have already been provided to the real estate company. So when we start reporting the accounts of the real estate company separately, investors and analysts will be able to see the difference in the net debt between the operation and the real estate business because the real estate business, starting now has, as I mentioned before, a very heavy development and investment plan. So this has to be shown separately in order to be analyzed on the basis of a real estate company and not of a retail operating company.

The next question is from the line of Tremiterra, Diego with Noster Capital.

It's a very quick one. Could you just repeat the numbers for -- on the real estate side for the pipeline of the projects and the projects that you currently have conversations with?

Absolutely. As I said, the gross asset value of the starting business is EUR 185 million. And we have a signed pipeline of EUR 200 million and another EUR 100 million in discussion, all in the strategic in the sectors that we have chosen to be in.

Okay. And you said that the leverage potentially is EUR 150 million?

Well, at least, because as you know, most real estate investment companies, both in Greece and in Europe have roughly between 40% and 50% loan to GAV, to gross asset value. And today, our company is completely unlevered.

That is very, very clear. And could you talk about the competitive landscape in terms of real estate funding increase for someone that is obviously not a specialist in the Greek market?

Sure. I can tell you the following that in the Greek market, it's very difficult to find good product. And it's difficult because it is very fragmented -- the market is very fragmented, and the ownership is fragmented and there is no history of healthy real estate investment companies. So it is very important to do 2 things in Greece, to include in your activity besides the normal buying and selling development because with development, you create product. And the second very important thing is to have strategic partnerships with tenants. Now in order to do that, we have to be focused. We have to be focused on 1 or 2 activities in order to have stronger relationships with strategic tenants. This is one of the reasons why we chose to focus only on big box retail and supply chain infrastructure because big box retail is dominated by international retail players, which means very good reliable tenants. And supply chain infrastructure is complementary in the sense of logistics and city, last mile logistics with the big box retail. I hope that was quite -- that was clear?

Yes, that was very clear.

The next question is from the line of Kourtesis, Iakovos with Piraeus Securities.

You would be kind enough to provide us with the growth rates for both the home furnishing business and the sporting goods division on a per country basis for your top line for the second quarter?

Yes. The second quarter in IKEA business, total Greece was 22% up, Cyprus was 30% up and Bulgaria was 37% up. Now as regards the sporting goods, yes, Greece operation was 51% up, Romania was substantially was almost 4% up because it is compared with -- 4x up because if you compare with the period that it was basically closed in 2020 -- 400%, yes. Bulgaria was double 200% up. Cyprus is the same. And Turkey basically more or less the same in euros always. Yes, in local currency, it is different.

[Operator Instructions] We have a follow-up question from the line of Polycarpou Polys with ResearchGreece.

This is my last question, I promise. Can you elaborate a bit on your investment on the outlet at The Ellinikon area, please?

Absolutely. As you know, LAMDA Development has acquired the shares for the project from the Greek government and the project is already on its way and strong planning procedures. We were the second ones to make an agreement with LAMDA Development to subdevelop an area within the project. The first one was the hotel group, as you know, the [indiscernible] Group. And the idea of the project is that we acquire fully the land on a freehold. And we developed the retail big box park right next to the mall, the retail mall that will be developed by LAMDA Development. The retail box will, of course, include an IKEA store, medium-sized IKEA store, but also other tenants. And we believe it's going to be one of the strongest, if not the strongest commercial retail pillar in the Attica region. And hopefully, it will be operational in 2025.

[Operator Instructions] Ladies and gentlemen, there are no further questions at this time. The conference has now concluded, and you may disconnect your telephone. Thank you for calling, and have a pleasant evening.