G8 Education Limited (GEM) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the G8 Education Limited Full Year Results Investor Call. [Operator Instructions] I would now like to hand the conference over to Pejman Okhovat, Managing Director and Chief Executive Officer. Please go ahead.

Good morning and welcome to the 2023 Full Year Results Call for G8 Education Limited. My name is Pejman Okhovat. I'm the Managing Director and CEO of G8 Education and I'm joined today on the line by the group's Chief Financial Officer, Sharyn Williams. Sharyn and I will take you through the investor presentation that was released to the ASX earlier this morning. Following the presentation, we will open the line to provide time for some Q&As. I would like to begin by acknowledging the Gadigal people of Eora Nation, who are the traditional custodians of the land on which we are conducting this presentation today. We respect their spiritual relationship with the country and we pay respect to the elders, past, present and emerging. I extend that respect to any Aboriginal and Torres Strait Islander people joining us today. I would also like to acknowledge the commitment, expertise and passion for G8 of the entire G8 Education team and for their ongoing partnership with families to support children's outcomes. This morning, we will cover a summary of full year 2023, update you on progress made, outlining the operational and financial performance for the year, and we'll conclude with a brief current trading and an update on our view on the medium-term outlook. Turning to Slide 6. We are pleased with our year's achievement. I'd like to call out several key takeaways from where we have focused the group's activities over the past 12 months. Firstly, the group's financial results reflect solid earnings growth compared to the prior year, driven by higher revenues and margins. Pleasingly, both halves delivered growth year-on-year, which is also reflective of our ongoing discipline in relation to costs. During the year, we narrowed our focus on addressing our team's retention, lowered agency usage and reduced vacancies. While sector challenges around availability of staff remain, we, as a business, are pleased to have continued to alleviate the impact within our network. As a result, there are no capped centers due to team shortages within our G8 network, and our usage of agency has significantly reduced. Occupancy continues to be supported by a positive trend in increased frequency, which is -- which measures the average number of days per week that a child attends a G8 center. Progress continues to be made towards improving the experience for G8 families. The 'always on' customer voice survey implemented earlier in the year continued to provide us with a regular center-specific feedback loop that our team responds to, allowing improvements in our family experience. The decision to shift external call center in-house has significantly improved our responsiveness to new inquiries. This has also been an important element to increasing frequency, as they support our families to navigate the very complex CCS affordability improvements. Strong operational cash flow was a feature of the results and has been used to enhance shareholder value through a share buyback, dividend payments and further optimization of the network. The approach to CapEx was also more targeted. We continue to invest in center resources, IT and property, but reduced the full year CapEx to $44 million, including software development, contribution to net debt levels reducing year-on-year. As a group, we are delivering on our purpose to create the foundations for learning for life, while improving our business capability to continuously find better ways to execute. Now turning to Slide 7, which outlines the stronger financial performance versus '22 calendar year. This is the result of the combination of 9% revenue growth and solid cost management, particularly in labor-related areas such as agency usage and network support office cost. From a strategy perspective, net profit after tax increased 53%, including nonoperating items as outlined on Slide 16. This improved earnings profile, coupled with buyback program, resulted in a 57% increase in earnings per share and the payment of full year dividend of $0.045 per share, representing 65% of reported NPAT. Occupancy for the year of 70.4% was flat on prior year. Pleasingly, this year has started stronger. Our spot occupancy as of 25th of February 2024 is 66.3%, up by 1.7 points on prior comparable period and the corresponding year-to-date occupancy is 66.9%, up 1.2% on pcp, reflecting a better enrollment and transition period. Now on to Slide 8. We continue our commitment to drive a sustainable future through our ESG journey. G8 achieved an 8.4% reduction in Scope 1 and 2 emissions and the first phase of solar electricity installation in our network has commenced, with over 950 kilowatts of solar energy powering 45 of our centers, with an estimated saving of $330,000 annually. Playing a leading role in the early childhood sector, G8 has opportunity to make a meaningful difference in the lives of our team and families, particularly in the areas of child protection, well-being and reconciliation. In these areas, G8 achieved a number of milestones. Our Reflect Reconciliation Action plan was completed and endorsed by Reconciliation Australia for publication in December. G8's Education Advisory Committee commenced and G8 has in place extensive ongoing training on child protection and mandatory reporting obligations. Moving to Slide 9, our balanced scorecard. We've narrowed our focus on improving operational execution, initiatives relating to IT and further enhancing the quality of the network and services we provide to enrich our family experience every day. In 5 out of our 6 strategic focus areas, we have made positive progress through the year, with early positive signs on occupancy in quarter 1 2024. We are pleased with our solid team retention outcomes, up 4% to 74%; and a 29% reduction in vacant roles across the G8 network. On the back of these significant improvements, we were able to reduce our capped centers to 0 and reduce the use of high-cost agency fees down to a more normalized level of 1.8% from 4.6%. Quality assessment ratings of meeting or exceeding have increased to 90% for G8 long daycare centers, now 1% ahead of long daycare sector average. From a family perspective, NPS has increased to 44% following the implementation of an 'always on' NPS and family voice survey. These surveys provide us with regular feedback center by center, thereby providing real-time visibility on performance of our centers. Now Slide 10. Our results and our team metrics have been a highlight for the year. From our reduction in vacancies, our strong retention improvements and enrollment participation numbers in our development programs. While the early childhood sector is still experiencing challenges, there have been easing of this pressure across the G8 network during 2023. G8 efforts to be an attractive employer through team recognition, flexibility, benefits, professional development and incentive programs, as well as incremental recruitment resources, have yielded results, with vacancies significantly lower than the prior year. G8's talent strategy is also yielding results, with enrollment numbers across all programs increasing year-on-year. The multifaceted approach to improve our team experience is showing in positive retention outcomes, achieving a 12% lift in early childhood teachers retention and a 3% increase in our Centre Manager results versus CY '22, was particularly pleasing against the sector backdrop. Turning to Slide 11. The experience of our families is critical for improving our occupancy performance. The trend in NPS has been positive since inception of our 'always on' NPS program in June 2023. Weekly surveys of families enable constant center-specific feedback to be leveraged to improve the experience. Focusing on new families experience through the enrollment and settling-in period, both critical moments that matter to our families' journeys with us. Supporting occupancy this year has been an increase in frequency, particularly noticeable post-implementation of higher Child Care Subsidy funding for the sector aimed at improving affordability for families. The G8 team has worked diligently to help families understand the CCS changes and also improving the everyday experience. Both factors have contributed to this result. The final experience measure is family retention, a key reflection of a family's relationship with G8. Family retention is the outcome of a number of focus areas such as improved team retention, higher quality and educational programs, all enriched with our team is a stable [ and ] relationship with our children and families can deepen. Now Slide 12, delivering better outcomes for our children, families and team is critical to our being and success. Our continued focus on quality has resulted in another year of improvement in our national quality ratings to 90% of our long daycare centers, meeting or exceeding NQS, which is now 1% better than the long daycare sector average. Our team's dedication to safety saw a 10% reduction in child safety incidents in CY '23. Professional development of our team is critical to delivering high-quality execution and team retention. We continue to strengthen this support through our Study Pathways Program, where over 1,500 team members are studying towards their next qualification, and through our targeted support for our ECTs and educational leaders across their network. We are committed to establishing Australia's early learning framework across our network whilst delivering differentiation and inclusivity programs and digital literacy. Slide 13. Group occupancy gained momentum late in the year as we focused on retaining our families leading into the enrollment transition period. This saw us close the gap to CY '22 in December. This momentum was a key to the strongest start we have seen in quarter 1 to date. Our CY '23 occupancy finished at 70.4%, flat or minus 0.2% on pcp and 2.2% down on CY '19. The increased frequency throughout the year helped our occupancy growth and we observed that our largest states finished the year in line with or above CY '22, with opportunities in the smaller states remaining. Assisting our team's ability to execute better, we worked on a number of fronts, simplifying work routines, providing our operation leaders with more time in centers, introduction of digital tools for our CMs and AMs to assess the performance in real-time and improved workforce planning, delivering better team utilization and reduction in agency reliance. Slide 14, our financial stability. We are pleased to have finished the year with a strong operating cash flow and balance sheet. Our capital allocation framework resulted in a reduction of CapEx year-on-year. We aim to maintain a lower capital envelope for CY '24 of circa $40 million to $45 million. Our discipline in cost management, particularly in variable costs, combined with our procurement strategies and initiatives to lower CODB resulted in delivering better earnings for the year. Optimizing the center network remains an important element of the group's strategy and its fundamental basis of creating a profitable portfolio for G8. We exited 11 underperforming centers and opened 3 new ones in CY '23. In quarter 4 last year, we indicated our intention to divest 31 of our centers through a sales process. This exercise has been slower than anticipated due to complexity of multiple landlords and state-based regulators, plus a significant holiday period in the middle. We have completed 8 divestments to date. An additional 8 centers have in-principle agreements with the landlords, 2 of which will complete on 1st of March, with the remainder awaiting New South Wales government approval to transfer the approved licenses. All other states have given their approvals. We will provide a further update at either the half 1 results or at our AGM. I will now hand over to Sharyn Williams to take us through the financial performance information.

Thank you, Pejman. Focusing now on our financial performance. Increased revenue, disciplined cost management and lower net finance costs resulted in operating and statutory NPAT growth and margin expansion. We delivered growth in earnings and margins in both halves, with the first half substantially stronger, cycling the impact of the 2022 Omicron and flooding quarter, and the second half benefiting from lower agency and wage costs as a percentage of revenue, a consequence of improved team retention and lower team vacancies. Support costs were well-managed, being lower by circa 2% than the prior year even after inflationary impacts in compliance, cyber and risk-related costs, reflecting reduced headcount from 2022, procurement benefits, some easing in insurance pricing and cost disciplines. As flagged previously, the temporary government funding stream relating to apprentice wages reduced during the year by about half. The combination of stronger center performance and lower network support costs resulted in a 25% increase in operating EBIT and further recovery of margin. Net finance costs were circa $10 million and a reduction on the prior comparative period, as net debt levels were lower based on strong cash conversion of 108% and lower CapEx spend. In terms of our nontrading items, they predominantly are driven by software development costs, portfolio optimization-related movements, AASB 16 carrying value adjustments and provisions for restructure and historical regulatory and legal matters. Firstly, the net impairment reversal. We regularly review our carrying values on our centers and investments, including AASB 16 right-of-use assets on a center-by-center basis. You will recall in 2020, we undertook an impairment on a number of assets which resulted in the right-of-use assets being written down. Given the portfolio optimization work being undertaken and improved performance in a number of those centers, some of these centers have been reversed. And when netted off, resulting almost $9 million after tax in nontrading income. These movements in the right-of-use assets will be a continuing theme post the implementation of AASB 16. Offsetting this are some loss on disposals and surrenders, where we exited 11 underperforming assets during the year and incurred a loss on the right-of-use leasehold or PP&E assets in those centers after we paid a surrender fee in some cases. We also increased our provisioning for a number of restructuring and historical regulatory and legal matters, resulting in a net expense of circa $7 million. Software development costs reduced in the second half as expected and reflect the development costs for cloud-based Software-as-a-Service programs, which are now expensed and not capitalized following an accounting interpretation clarification. We're pleased with the completion of our procurement system, which is providing benefits in terms visibility of our supply chain and unit costs and are providing a better experience for our Centre Managers. Software development expenses were $5 million after tax but they are expected to be minimal in 2024 as the HRIS and procurement systems exit their development phase. The result of these net nontrading expenses are slightly below the prior year. Turning to Slide 17, where we focus on center performance. You will note similar to the first half, this is reported on a total center basis, including new centers, and the prior period has been restated to allow for a like-for-like comparison. This is the format we will adopt in future reporting periods. The center network delivered a higher revenue and earnings than the prior year and experienced some recovery in margin. While occupancy was flat, revenue increased circa 9%, largely reflecting the January and July fee reviews, both a necessary response to considerable inflation within our cost base, particularly in our wage rates. The impact of this inflation is most evident in our employment expense, where we saw an increase on prior comparative period of circa 8%. However, this was partially mitigated by the lower agency usage costs. This 8% uplift reflects the annual award increase of 5.75% that was effective in July 2023. Increases in pay rates as our team increased their qualifications, and additional [indiscernible] costs such as the superannuation rate increase of 0.5% and certain state-based payroll tax increases, such as the Queensland well-being levy and the Victorian temporary payroll surcharge of 1%. A highlight of the year, as Pejman outlined, was the reduction of agency usage to 1.8%, down from 4.6% in the prior year, a 2.8 percentage point decrease, offsetting some of the internal wage rate increases. This result is an outcome of a range of factors, including those touched on earlier, relating to improved team retention and lower team vacancies. Other factors driving the lower agency outcome were the central roster management support and the new HRIS system, also pooling our team resources to create efficiencies across local areas and providing our team with flexible working arrangements. Rent is another material cost base for our business. Rent expenses increased 5% on the prior period, reflecting the composition of our network, where we have a combination of CPI and fixed annual increases and our active approach we're taking to rent reviews and renewals. Depreciation increased as expected, reflecting CapEx investment in the prior year, where the spend was above depreciation. Other costs such as direct cost of servicing our bookings were managed well and in line with occupancy levels, while lower expenditure in property, utilities and maintenance reflected positive procurement initiatives. With overall center expenses increasing 7.6%, center margins improved to 16.6%. Similar to the half result, the full year continued the benefits of reduced external labor usage, effective cost disciplines and an active response to inflation. As a group, we will maintain cost focus and discipline, particularly given that inflationary pressures are expected to continue, not only for our cost base but also for our families who are feeling these pressures. Turning to capital allocation on Slide 18. The group declared a $0.03 final dividend, resulting in a 50% increase in the full year dividend to $0.045. The group has a strong balance sheet with a conservative leverage level of less than 1x and ample liquidity. Cash flow generation was strong, with cash conversion of 108% and free cash flow of $58 million after interest, tax, CapEx and dividends paid. These funds were used for debt reduction, share buybacks, software development and lease surrenders to exit loss-making centers. The group maintained a strong balance sheet with net debt coming down in the second half from $103 million at June to $59 million. We have access to a further $171 million of committed bank debt facilities. Capital and cost management discipline will continue to be a focus as the group builds capability towards a more consistent and efficient operating model. Pejman will now talk through the current trading and outlook.

Thanks, Sharyn. We are pleased with our improved occupancy at the start of this year as a result of better enrollment and transition from quarter 4 last year to quarter 1 this year. Our spot occupancy of 66.3% is 1.7% higher than pcp, with year-to-date occupancy of 66.9%, up 1.2% on pcp. Frequency continues to be positive and further 3- to 5-year-old fundings will assist with affordability of kindergarten programs for parents. We have implemented a 4.5% fee increase to address cost inflation across the areas of control whilst we await the outcome of [ NEB ] to see when the federal government will work with the sector for any support for a wage subsidy later in the year. Our disciplines in operational effectiveness and cost control continued to be maintained. Now turning our attention to medium-term outlook. Overall, the sector fundamentals for long term remain as strong as we have indicated previously, reflecting mainly on women workforce participation, growth in net migration and liberal policies working towards a universal access for all. We are optimistic looking ahead. At the same time, we remain cautious on the macro environment, particularly around whilst inflation is easing off, cost of living is a real issue for our families, challenges with the workforce and high level of regulatory interest in the ECEC sector. Demand has encouraging trends in the early part of the year, supported with a further funding in the 3- to 5-year old kindy programs, such as the new, free kindy program in Queensland. The regulatory focus continues. The ACCC final report had a more balanced outcome in establishing no price gouging, no excessive profiteering and no real requirement for price regulation. The Productivity Commission interim report has many positive aspects that we support and we remain very engaged in working with them whilst they're finalizing their report and recommendations over the next 6 months. Multi-employer bargaining has continued to progress, be it slowly, and the federal government is working with the involved parties and we continue to advocate for a government-funded wage subsidy. In the meantime, we at G8 continue to do a good job in addressing workforce challenges that the sector faces. We have a clear strategic focus on delivering a Fit Core for our business. Our operational execution and rigor in cost and capital control remain firmly in our sights. Now I'm going to pause there and open the lines for Q&A.

[Operator Instructions] Your first question comes from Tim Plumbe from UBS.

Hi guys, can you hear me?

Good morning, Tim. Yes, we can.

Excellent. My 1 question is around that agency spend. So reduction to 1.8% is pretty impressive -- sorry, I was trying to multitask badly during that call -- was that the fourth quarter exit run rate, as a 1.8%? And I guess, how should we think about agency as a percentage of revenue in a business-as-usual environment and what sort of EBIT benefit would that have given if it was down at that level for the whole of the year, please?

So Tim, that number is a full year number, that 1.8%. So if you just focus on employment costs as a percentage of revenue, we are, as you say, at a more normalized level now of agency.

I think just to perhaps expand on that...

So how should we think about -- sorry, Pejman. I was just going to say, how should we think about -- like that was a progressive improvement throughout the course of the year, right, so how do we think about business-as-usual?

Yes. It's hard to predict the future. Whilst the sector still has challenges, Tim, it hasn't alleviated. We believe we've done better than the sector quite a bit in terms of actually reducing our team vacancies. What I would like the number to be for this year is sub-2%. Now we'll continue to do our best to manage it as best as we can, but whilst the sector has still significant workforce shortages, I think we've just got to kind of be a bit balanced in our view.

Your next question comes from Marni Lysaght from Macquarie.

Good morning, Pejman and Sharyn. I just think to focus on early calendar year '24 trends, so as you pointed out in the slide deck, the reduced agency usage and some of the other streamlining you've achieved and also reducing capped centers, like kind of, could you maybe provide a bit more color on what's driving the early calendar year '24 occupancy growth, considering that this time last year, you were cycling flood, the Omicron impact, which provides you with a pretty easy base.

Good morning, Marni. A couple of things to perhaps maybe just establish first. The quarter 1 impact in Omicron and flooding that you're talking about is actually 2 years old now, not last year.

Yes, that's right, yes. But you were cycling...

We're not cycling -- we're not cycling against a soft quarter.

Yes. What I mean, like this time last year, you were cycling that. And then you've obviously put yourself -- like you reduced the capped centers, there has been some, you call out improvements in process and also -- and this is despite lowering agency usage, because -- just be good to have some color maybe on what you've been seeing in enrollments and other in the uptake with the subsidy, et cetera, to drive the early calendar year '24 expansion in occupancy versus the prior year.

Yes, it's -- it's a combination of all of those, Marni. If you recall, as we spoke a little bit in October and then a little bit towards -- we had a small update in December. We put a lot of focus in ensuring we get our team situation more stabilized. What I mean by that is recruiting and reducing our team vacancies, because that's one of the key critical factors in having a stable team that families can then engage with. Number of other factors that we've talked to as part of the presentation, bringing our call center in-house so we are able to deal with our families quicker, faster and we're owning that relationship into -- on that. Putting more focus and rigor around our operational execution, providing our Centre Managers and Area Managers with better information, real-time digital tools so they can see their performance on a daily basis and reducing some work routines so they can actually focus on running their businesses better. The other areas where, as part of this combination of activities or initiatives, Marni, have been more focus on targeted marketing activity in ensuring we are kind of delivering inquiries that are of higher quality that allows us to also improve what we call our conversion. So better-quality inquiries that come through our network, we're able to convert at a higher level. And the other area that we have been focusing, in making sure the experience of our families, particularly the new ones, because that first 3 months is really important for our families, as the child settles, their parents are happy and engaged and feel trusted and confident in what we do, is really important. There's a lot of things that have gone into having that continued improvement as we came out of November, we were really pleased with how we finished December and that was our aim, to finish December quite comparable, to actually slide over '22, which has now led us to have a really good start in early '24.

You have a follow-up question from Tim Plumbe from UBS.

Sorry, guys. My follow-up question, and apologies if you answered this already, but when you look at your existing customer base, your families, can you talk about any trends that you're seeing in terms of average days per family this year compared to last year?

Yes. If you kind of look at same time last year, like January, February, the average was 3.4 -- 3.04. The average now is about 3.09. So we've seen, Tim, almost right the way through '23, that frequency continued to steadily increase and we're seeing the same patterns this year. Part of that, I think, if you recall, we talked at half 1 and a little bit at quarter 4, was around the fact that the impact of CCS changes always takes a bit of time for families to really evaluate what does it actually mean to them, to their pockets. And those who have evaluated their own individual budgets and going, "Actually, it's probably better for me to increase my child's frequency and probably work." So we've seen some of that come through. Certainly, some of the states, typically the ones who are more generous like Victoria, New South Wales and now Queensland, putting more funding for families into 3- to 5-year old programs, has started to see an increase in that space, too. The nursery room, so the birth to 3, continue to be really popular and continuing to have that early growth. So therefore, our focus is trying to really ensure that we bring in children as early as possible in that -- in those birth to 3s, whilst working in our specific estates to also increase that kinder -- kindergarten program. Hopefully, that answers your question.

Your next question comes from Peter Drew from Carter Bar Securities. Your next question comes from Cameron Bell from Canaccord.

Morning, guys. Apologies if you've already touched on this, Sharyn, but could you just take us through the cash tax result, and I guess, the cash tax outlook for this year?

So in terms of cash net debt or just specifically related to tax?

The cash tax paid, specifically tax.

Okay. So our cash rate usually is a tick over 30%, so very vanilla tax approach. In terms of the tax position at the end of the year, last year, it was a receivable; now it's payable. That's just simply our PAYG installments, et cetera. We did have some tax refunds during the year, Cam, related to wage remediation, where we were able to get the tax receivable back for those payments with some adjustments to historical returns. But for the coming year, a fairly vanilla approach with quarterly installments and the tax rate a tick over 30%.

Yes. Okay, perfect. And then I'm not sure if you can do this just yet, but so that -- the start of the year, the occupancy gain versus last year, like that's a really positive number. Can you maybe -- I think the number you've given is a group occupancy number. Is there a like-for-like comparison that takes into account the divested centers with lower occupancy?

I think it's too early to call it really, Cam, because the number of divestments has been small. What we have indicated, it's roughly about half a percentage. But I think what we -- what we'd like to kind of see a few more months through, so we can complete a few more and we'll probably provide a better outlook in terms of the impact of those divested centers probably at the AGM or maybe even at the half 1.

Yes, okay. Sorry, that 0.5%, that's the gain in occupancy you'll get from divesting the centers?

That's from -- on Slide 14, the 9 that we have exited.

Your next question comes from Peter Drew from Carter Bar Securities.

Hi, Pejman. Hi, Sharyn. I'll try again. Can you hear me?

Yes, we can.

There we go. Yes, congratulations on that result. I guess I'll keep my question on costs. Just the support costs in the second half appear to have stepped down relative to the first half. I'm wondering if you could maybe provide some sort of an indication of what we should expect this year for support costs? And similarly, for interest costs, which also came in lower because of the cash flow result.

Sure. So in terms of support costs moving forward, inflation just needs to be factored in there, Peter, for the coming year. But we certainly, in the second half, as you called out, the disciplines around headcount really leveraging off the support cost is evident in that second half. In terms of interest, there's no change to our margins, et cetera. So it's really BBSY plus margin, so fairly similar to this year. You'd expect with maybe as net debt did perform quite well at the end of the year, maybe a tick under, but just a conservatism, probably repeat this year until we give a better update at the half.

Yes. Great. And I mean if I can just sneak 1 extra in. I just sort of missed the update on the Genius transaction. Could you just go back over that from a [indiscernible]?

Yes, of course. Peter, it was a little bit slower than -- the progress has been slower than we would have loved it to be. A couple of key reasons, hindsight is a great thing, but 28 landlords, 28 agents and 28 lawyers involved in all of this. We would have hoped -- we were hoping that we would be there faster, but it has just been quite slow going forward or backwards. And kind of we really lost about 3 to 4 weeks during that Christmas and January period. So with that backdrop, we have completed 8 so far and 1 surrender, so 9 have been dealt with. We have another 8 in-principle agreements between landlords, us and Genius. Majority of 8 are in the New South Wales territory and we are waiting for the regulator to -- or Department of Education in New South Wales to provide their approval so for us to transfer -- to be able to transfer the license. All other states and territories have provided their approval, so we're just waiting for that one. There will always be a few that perhaps would never go through, but that's where we are currently. But we are working very hard. And as we said to the rest, we are trying to provide more update at our AGM and perhaps even at half 1.

Your next question comes from Marni Lysaght from Macquarie.

No. Sorry, the previous question beat me to it. I just had some questions on the landlord process and with the Genius exit. Sorry about that.

No problem.

[Operator Instructions] There are no further questions at this time. I'll now hand back to Mr. Okhovat for closing remarks.

Thank you. In closing, I would like to once again thank the G8 Education team for their outstanding work that has delivered these results and outcomes. Our team's everyday work results in supporting thousands of families and their children with high-quality education and care. Their passion and dedication and hard work allows us to live our purpose, creating the foundation for learning for life. Thank you for your time joining us on this call and we will now close the call.

Thank you.

That does conclude our conference for today. Thank you for participating. You may now disconnect.