GFT Technologies SE (GFT) Earnings Call Transcript & Summary

Thank you very much, ladies and gentlemen, good morning. And welcome to our Q2 or H1 call for 2020. The presentation is available on our website in the IR section. But at the same time, we are sharing it as a webcast and flipping through the slides online. So there are different ways how you can follow. Let's move to Slide #1. In a nutshell, overall, Q2 came in a bit better than we had expected 3 months ago. The pipeline from Q1 and before was quite robust. And very important, our COVID-related move of 6,000 people to the home office did not affect our delivery capabilities. And this led in the end to revenues up by 5% or 4% organic. We saw further dynamic growth outside our top-2 clients. To remember top-2 clients inside GFT is Deutsche Bank and Barclays, who stood for a strong reduction in revenues over the last 4 years. So outside the top-2, we grew by 19% in the first 6 months of 2020. Our earnings figures are significantly burdened by COVID-19. We will look at that a bit later. Insurance grew by 32% year-over-year, and it now stands for 14 percentage points of our overall revenue. Our target for the year was 14% to 15%, so pretty close already. Cloud business, as always saying in these calls, is contributing to our growth. It now stands for 8% [ or ] 8 percentage points of our revenue, and it goes across all our industries. So from banking, insurance to the industrial sector itself. EBITDA adjusted is impacted by COVID-19, mainly we see that in underutilization and restructuring measures, and therefore, it's down 16%. Strong operating cash flow, driven by positive working capital effect. So overall liquidity and debt covenants, anything of that sort is no issue at all. Outlook 2020 confirmed our revenue, we see with further growth at EUR 440 million. And we also confirm all of our earnings guidance numbers. We have given roughly 6 weeks ago, as I remember. But we will come back to that on the last slide. Let's move forward, Slide #3. The numbers itself, we see the revenues up to EUR 221 million. That's the 5% of revenue growth I already mentioned. Our newly acquired in-GmbH in Germany, contributed EUR 2.2 million to this. We acquired the company at the first of January of 2020. So they are in only in this year. So organic growth stood at 4%. When it comes to EBITDA adjustment versus previous year, we see a decline of 16%. And we have highlighted on the right side and the bullet points. There are 3 main reasons for this. We do see operating improvements mainly in our Americas and U.K. business segment of nearly EUR 2 million. But at the same time, we saw heavy underutilization mainly in our Continental European business, which contributed minus EUR 3.8 million. Last year, after 6 months, it stood at minus EUR 1.4 million. And on top, we had restructuring measures, and we now had to book most of them in the second quarter, and therefore, it amounted overall to EUR 5.7 million versus EUR 2.9 million a year ago. Both numbers sky high for GFT standards. Usually, we have like EUR 800,000 in a half year, EUR 700,000 of standard restructuring costs. 2019 was already very high for us EUR 2.9 million, leading to EUR 4 million throughout the whole year of 2019. 2020, we already see EUR 5.7 million, and we believe it will be EUR 7 million at the end of the year. So a main reason for the Q2 EBITDA numbers. Then the last 2 points of FX effects and IFRS 16 are minor, but also contributed a bit to the change. When we look at the EBITDA, it's a bit burdened by the new M&A deal in in-GmbH because we have to include the earn-out for that deal. The earn-out is scheduled for 2 years, 2020 and 2021. EBT margin stood at only 2%, but mainly burdened by the EBITDA effects already mentioned. Let's get back to the tax rate on a later slide. So let's move forward to Slide #4. The revenue and EBITDA adjusted by quarter and when we look at the second quarter and compare it to the first quarter of this year, where we do see that we have a COVID impact, we had hoped before Covid to grow in the second quarter versus the first, but COVID prevented that. And on top on the profitability side, we had the restructuring measures, which shows EBITDA adjusted Q2 versus Q1 is significantly lower. Comparing to a year ago, we see that we're up 3% in revenues. While the top-2 clients, Deutsche and Barclays, were declining by 25% in the first -- sorry, in the second quarter versus the last year's second quarter. We saw all other clients grow by 15%. So the growth outside of our top-2 is still ongoing. Moving forward, Slide #5. Revenues by business segments. Looking at Americas and U.K., we do see overall 7% of growth, all of it organic. However, offset somewhat by lower FX rates in our main growth markets, which are Brazil, Canada and Mexico. All these 3 currencies have declined versus the euro and this has burdened the overall revenue growth. It would have been 11% if we would not have seen any FX effects. Continental Europe, we do see a decline with the top-2 clients, which is more or less compensated by the other business, and therefore, organic plus 1%. And we do see the M&A contribution of the newly acquired in-GmbH, which I already mentioned, contributing 2% of growth to our numbers. Now let's dive one step deeper, that's Slide #6 and differentiate between our top-2 clients and all our other clients and focus on the group that we do see that client concentration has again reduced. It's now 22% with the top-2 clients, and it was 32% a year ago. And we also see that the top-2 clients have declined by 25% overall as expected. I have to say it's as expected. It was mainly in the U.K. and then second in Germany. So it's distributed between the 2 business segments above. U.K. is part of Americas, U.K. and APAC and Germany is part of Continental Europe. At the same time, we see an unbroken trend in our other clients. So after 6 months, we're up 19%, maybe you remember in Q1, the numbers stood at 22%, and we were not able, because of the COVID impact on pipeline building to maintain the number above 20%. So it was 15% growth with all other clients in the second quarter. And together with the Q1, the first half showed 19% of growth with those -- with that client group. So still going strong despite the COVID crisis. Let's move to Slide #7 and profitability on business segment level. Here, first, I have to mention that in the last year first half reporting, we were still learning the IFRS 16 [ adoptions ]. They were brand-new back then. And we did a mistake. We allocated the IFRS 16 not accurately to our business segments. So the overall number and impact from IFRS 16 was, of course, correct, but we didn't allocate correctly to the 2 business divisions. We now corrected for that. So if you compare to last year's numbers, you do see that the EBITDA adjusted of Continental Europe reduced by EUR 1.8 million and the 1 of Americas in U.K. increased by EUR 1.8 million and now we can compare to the right numbers, apples with apples. And now let's look at the table. Americas and U.K., we do see is up EUR 3 million versus previous year, and I'm focusing on EBITDA adjusted now. EUR 3 million up, roughly EUR 1 million comes from a better utilization and EUR 2 million from higher earnings contribution. So a strong trend for Americas, U.K. and APAC. Despite we all hear every day in the news, the COVID impacts on the U.S. and Brazil those 2 markets for GFT are quite resilient. U.S. growth intact. Brazilian growth strongest in the group. Only one where we are a bit hit on pipeline building is in Mexico where the new client sales is a bit disturbed at the moment. It's not as good as in the other 2 markets. But Brazil and the U.S. going very strong. Canada going very strong as well. And this leads to the improvement on the profitability side, we have picked up in margin. Looking at Continental Europe, well, it's the other side of the coin. Here, we do see a decline of nearly EUR 8 million of which EUR 3 million comes from more restructuring and EUR 4 million from underutilization. So that's the main effect for Continental Europe. Not much on margin, they are more or less in line with previous year, but it is restructuring and underutilization. We have to get that back to normal, and we will see Continental European numbers pick up again. All right. So the homework is clear. Let's move to Slide #8, revenue by country. Here, we see some countries with a negative if you look at the ones in the middle and the percentage points, it's Spain, U.K., Germany and the U.S., they are all impacted by reductions in our top-2 clients, mainly in Deutsche Bank revenue reductions with GFT. And in these markets, we were not able to completely compensate with the growth in all other clients. Looking at the growing markets, we do see that Italy was intact after 6 months despite being hit by COVID very early but the business is going very, very steady. Strongest growth we do see in Brazil, 50% up on euro basis versus previous year. And last year, we already saw the same growth rate. So that market is still going strong for us and I think for the overall industry as well. We do see growth in Canada. We see strong growth in France. We see some growth in Mexico. Hong Kong doing well, a new market to GFT. So these are the growth markets for the time being. Let's move forward, Slide #9, what companies, what clients stand for the growth mostly. Well, these are the top 30 inside our portfolio. We have 7 new entries if we compare to the first half of 2019. Both of them have been on the list in Q1 already. Let me point out 2 new ones, which were not on the list in Q1, who now made it to this list. And it's on retail banking, the Volkswagen Bank in Germany, a new client or an upcoming and growing client for our German portfolio. And in industry and others, we have another not disclosed private equity company. You see one on the capital markets already that was there for a long time. We may not give the name of that private equity firm. And the same is true on the industry and other side, where we serve a portfolio company of one of the big private equity funds of the world, where we do classic IoT business, it's oil drilling company, and therefore, we support them in connecting all the oil rigs and building a data lake and analyzing how the rigs are doing. So that is a classic IoT business linked to the cloud, the growth business, we always talk about. When we look at the bottom right, we see by sector that Financial Services stood for 76% of our revenues, insurance stood for 14% and industry and others for 10%. Industry and others currently for us as it's still -- especially on the IoT side in Europe very young, and we're early stage here. And we have a hard time in 2020. COVID here impacts us most. Sales and banks and insurance companies is working quite well, but with industrial clients who partially have sent people home, short-term leave and stuff like that,there the pipeline building is tougher. And therefore, here, we are not making as much progress or we were not making it in Q2 as we had hoped for, so that probably will only happen in 2021. All right. Let's move forward. Slide #10, P&L statement. Only a couple of comments I want to give here, the fourth bullet point on the right. Our overall ratio of personnel expenses versus revenue has declined -- well, has worsened, let's put it like this, to 82% versus 80% a year ago. Well, of course, here, we do see the underutilization we currently have in our system and it is visible in this ratio. You see other operating income and expenses have increased. We have seen a blow-up in FX effects on both sides. So nearly EUR 2 million of those increasing other operating expenses, but also operating income come from FX. So when you take that out, the expenses are more or less flat versus the previous year. Yes, we have seen less travel costs, but we are a bit bigger in team size and office need. Therefore, and we expected operational expenses to be more or less on the level of the previous year. Let me also comment on the tax rate here. It stands at 30% after 6 months, and we predict it will be between 28% and 30% for the full year as of now. We have an unfavorable profit distribution between our countries. Countries with a lot of restructuring like Germany will show a significant loss, but we will not book negative taxes here. At the same time, other countries compensate, but there, we have effective [ tax ] rate. And therefore, it is an unfavorable distribution, which we will see this year. We expect it to normalize back to the 25%. We already predicted for the year 2020, only in the year 2021 for this year, we now guide for 28% to 30% of tax rate because of this distribution of profits inside the GFT Group. It's not because any tax rates have changed or anything. It's more the distribution inside our companies. Let's move forward, Slide #11, the cash flow analysis. Well, as I said, net debt is not an issue. Operating -- overall financing structure is solid. We see a net debt of EUR 54 million -- EUR 51 million. So it even improved compared to a year ago, which is good news, despite the COVID crisis. At the same time, we had a strong operating cash flow. We had good working capital. So good news from that front. And you do see under investments a bit higher number because we have acquired the in-GmbH in January, and this is reflected in our investments. Let's move on to the balance sheet, Slide #12, not much to mention about we see that the balance sheet total has reduced. We have seen a reduction in equity too, which is mostly related to the FX effect that we have seen. All those currencies we talked about, which are -- well, nearly all currencies have been weakening versus the euro, which leads to FX compensation effects directly in the equity. It doesn't go through P&L directly to equity. When you have to adjust for your goodwill and all the other balance sheet items. Besides that, not really much to mention when it comes to the balance sheet. Moving forward, Slide #13, employees by country. Overall, we see an increase in headcount versus the first quarter, which is mainly linked to our growing delivery hubs in Brazil and Poland. Brazil as a local market and a bit nearshore, Poland being fully nearshore into London, Germany, Italy and Asia. And therefore, these 2 markets are the strongest growing people markets inside GFT. At the same time, we see that Spain is reducing, and we might see that number come down a bit more. Why is that? Well, it is mainly because the nearshore business we were doing for Deutsche Bank in the U.K. and in Germany. And we talked about the top-2 client, Deutsche Bank, reducing [ their leads ] to less need for experts on the Spanish side. And therefore, it's not a local distraction from the Spanish market. It is due to our top-2 accounts reducing. At the same time, we had the same issue for German employees working for Deutsche Bank, who came back already last year and a bit more this year. We're nearly down to -- not really 0, but very low numbers with Deutsche Bank onshore in Germany. The skills that came back from Deutsche Bank. They are highly skilled people, but they don't fully reflect today's focus of GFT, very technology focused these days, and those skills were more in project management skills which currently clients are not buying from GFT. That's not what our brand stands for, and that's not what our clients are looking for. And therefore, like in every crisis, we look at our portfolio in the teams, we look at the skills and what will the market buy in 1, 2, 3 quarters' time. If the market will buy the skills, we accept the underutilization. If we believe the skill is good, but it doesn't fit to the GFT pipeline building and branding, we will do restructuring. And that's what we have done in Germany. In Germany, we have defined and agreed 50 people who will leave us, that's the main piece of the restructuring costs that we have booked in Q2. It's roughly 50 people, but you will only see them drop out of this list of FTEs throughout the second half year because that's how it works in Germany. People will leave within the next 6 months over time, legally. Utilization is at 88% doesn't look so bad versus 89%. The truth is we have better utilization in some markets like Poland and Brazil. And in the 2 big markets in Germany, and in Spain, both in Spain, we're down 5% and in Germany, we're down 8% on utilization versus previous year. And that's where the underutilization comes from. And that's why I was mentioning the underutilization on the initial slide at the beginning. This brings us to Slide #14, the outlook for the full year 2020. As already stated, we confirmed the guidance, revenue at EUR 440 million, we continue to see the decrease with the top-2 clients of around 26%. It's even a bit more stable than we had anticipated at the beginning of the year. So clients are not moving around that much during the crisis and going for new providers. It's also true for our top-2 clients. That's why it's even a bit better than we had initially expected. At the same time, we will outgrow this with all our other clients. Again, we believe it will be 14. You remember, we stood at 19% at the end of the first half. So the COVID impact will hit us also in Q3 and Q4 somewhat. We will not see the 19% continue. It will be 40% for the full year, what we expect. And again, it is mainly because of the tough COVID building, which happened at the beginning, April, May, June. I think it's now more or less back to normal or, let's say, a new normal on how to do sales, how to not meet and still sell or from clients' perspective still buy, but there is a bit of reduction on the growth that we predict. Going to the revenue -- to the earnings side, we do see the -- we confirm the numbers we have said 6 weeks ago. So EBITDA adjusted will be EUR 44 million and EBT, EUR 13 million, no changes there. We will continue to see burdens from COVID-19 underutilization and ongoing restructuring, although reducing. The main impact will be in Q3, Q4 should already look quite normal. And we will continue focusing and spending into the growth in all our other clients and the new technologies. And maybe just a bit of detail on the Q3 and Q4 outlook. In Q3, we see revenues similar to Q2. Profitability will be burdened because of the [ too ] high team numbers that we still have. So utilization will again show an EBITDA below previous year. At the same time, Q4 should be more or less back to normal. We believe the revenues will be in line with Q4 of '19, more or less the same numbers. And we would also expect to see margins come back to normal because I think we will see less underutilization in all of our markets. We will have solved the issues we have in underutilization and teams that we can't sell easily at adequate margins. And from there on, we want to do everything to support the 2021 development in 2020 to build the foundation for the next year's growth again. That's it. That's in a nutshell. 25 minutes. I'm ready to take your questions.

[Operator Instructions] The first question comes from the line of Andreas Wolf with Warburg Research.

[ Andreas Wolf, Warburg Research ]. I have a couple, if I may. So the first one would be on the number of staff and its development compared to the first quarter. So obviously, we saw a sequential increase. Is it because the staff was already hired in the first quarter and we see kind of a lagging effect? Or do you already anticipate increasing business. So that would be my first question. Then the second is related to short-term work. To what extent are you still using short-term work and at which hourly utilization are employees already by now. So are you back to, let's say, 80%, 90%? Where do we stand here? And then there was an interview by [indiscernible] alluded to a new hub that might be opened in Vietnam. So could you provide some insight here how could help you, I guess, it would be an offshore hub, which would probably be demanded by bigger clients, but some insights would be helpful here. Also, the same interview there was an indication about the software platform. Maybe you could provide some insights here. Is it related to IoT, finance in general? That would be helpful.

Okay. [indiscernible]. Let's start with the staff and development. People already hired or not. Well, of course, it's a mixture. However, we do have the markets, Brazil, and Poland, which are growing. And at the same time, the reductions in other markets are not happening that fast. That is the main reason why the number is up but we do have a challenge in our Spanish and German market, as already told. The German numbers still look that high. But in the cost we already accrued now for the restructuring. So you could, in theory, deduct 50 people in Germany going forward, although you will only see it over time. And the same is true in Spain. In Spain, we're not restructuring, but this answers your second question already [ on ] short-term work. In Spain, we're using the program the government is giving with 180 to nearly 200 people at the moment. It's very flexible that we can bring back people when new projects come up, that's good news, right? So we can act flexible in being positive for us and for the employees. But that's the only short-term work that we're currently using. So in Germany, we solved our issues with the restructuring program we did. We had a bit of short-term work in the second quarter, especially for our industrial clients, but that has now stopped and we have solved via restructuring in Spain. We think we will rebound and therefore, we're using the short-term work there for this amount of people. And of course, if you take that out of the total FTEs, you would see that fundamentally, we are a bit below Q1 but the growing markets, Brazil and Poland, the growing [ bases ] are growing for a reason. And this brings me to Vietnam. Today, we deliver into Asia, mainly or nearly only out of Poland. We have started to work in Vietnam with a partner like a [ build, operate, transform -- transfer ] model where somebody builds for us a small team of IT experts because we want to grow further in Asia. And there is some pressure from the clients to have an Asian hub available to also have that pricing in the portfolio. And therefore, we now have started our own company in Vietnam, well, the problem is -- we would like to start our own company, but somebody has to physically fly to Vietnam and sign documents which is currently under the pandemic problem because it would take 4 weeks, 2 weeks quarantine there, 2 weeks quarantine here. So that's a bit postponed. But leave that aside, Vietnam will be another location for GFT. It will be our nearshore hub for the Asian market. But we will start slowly, right? So it will start with 20 people, and we will take it from there. Let's see where it goes. Our Asian business overall will contribute EUR 9 million, maybe even EUR 10 million of revenues this year. Two years ago, that was nearly 0. So we have built that from scratch. And now we are building another platform. And Vietnam is for us an attractive location. For sure, we will not go to India. There are enough IT players in India. The different story is Vietnam in this case, and that's where we -- we will put down our flag. And when [indiscernible] talked about the software platform, he meant the platform we acquired when we bought the in-GmbH, the small company in Germany, we acquired at the beginning of the year. They have a platform it's called [ sphinx open online ] so has an Egyptian touched it. And it is as he -- and all the names he gave as clients in the interview are accurate, and it is this sphinx open online platform. At the same time, what we're doing right now is we are combining all the assets we have around such a platform in GFT, all our cloud knowledge and the knowledge we have acquired within in, and we're working on the GFT asset suite, which will then be more transparent and go to market, especially for 2021. So that's the strategy there. I hope that answered the question, especially from the interview.

Yes. And one follow-up, if I may. If you look into the pipeline of new projects, et cetera, when should we expect GFT to be at full utilization again?

Full utilization, meaning will -- the Germany should be at full utilization already starting Q3 as always, there's holiday season, there will not be perfect. But Q4, we should see a very good utilization again. For Spain, if we take out the short-term work, we would be back to normal utilization. We hope to be there in Q1 next year again.

The next question comes to the line of Knud Hinkel with Pareto Securities.

I have a couple of them. First of all, on underutilization, you gave an outlook for the full year for restructuring expenses which you see at around EUR 7 million. Maybe you could also give a hint where we stand for the burden? Or what you expect -- what do you expect for the full year also from underutilization? That would be helpful. And also, if it's possible, if you can also provide an outlook for the next year for both -- for both expenses. That would be also helpful. Second question would be on France where you have -- where we've seen very strong growth numbers. Could you provide some color, what's the reason behind it? Is it because of the strongly growing insurance business with [ Guidewire ]? Is that the background? That would be my second question. And yes, thirdly, with regard to the margin of other clients compared to the top-2 clients, you mentioned several times in earlier calls that IT service is sticky business. So can you provide an outlook or give a feeling for that -- when do you expect the margin disadvantage to get smaller over time? So when you don't need such a lot of sales expenses anymore to -- for pitches and so on and forth. So when do you see this margin disadvantaged shrink in the coming years?

Right. Let's start with the underutilization. As you've seen on the slide number, I think it was 3. It was minus EUR 3.8 million for the first half year. We expect it to be minus EUR 5.4 million for the full year. Just as the number. And the outlook for 2021, well, we believe Q4 should already look pretty much back to normal. So the main impact for the second half will be in Q3 and Q4, we would expect and hope that the underutilization is minor, and that is our expectation for 2021 again. So that is at least if the COVID crisis does not get worse again or come back for whatever reasons or has other fallout like companies going bust and hitting the P&Ls of our banking clients which then might lead to cost saving measures. If those 2 things do not happen on a broader scale, we hope that 2021 will be back to normal. France. France is today a country with mainly one client. I think it's among our top 30 clients anyway. It's the midsized French insurance company, [ Lamase ] for whom we are implementing the full Guidewire suite in its online -- in its cloud version -- and that is the full revenue in France. We're currently looking for a second client for a similar Guidewire implementation. But from today on, it's still only that single client. It's as we always said, EUR 50 million to EUR 60 million over 5 to 6 years. And as always, it's a distribution that has some peak. So the year 2019, '20 and '21 will be the peak, and then it's going to soften again. So it's mainly one client. And this client, interestingly, he's fully trusted in our delivery capacities also during the crisis. So he did not change the scope. Of course, it was discussed at the beginning of the crisis, early April, everybody discussed everything. But we did not slow down and the project is going as planned. I think that's very important. And for us, it's another success point in our COVID crisis management. Looking at margins, other margins, versus top-2 margins. Yes, you're right. I always talk about our sales cost disadvantage in all other clients or put it the other way around, big clients have a relative low sales cost versus revenue. And Deutsche Bank account, it is 2 to 3 percentage points of revenues. Our average is roughly 8% on revenues in a well distributed client mix with some bigger clients and a lot of smaller clients. So there's a gap of 5% and when we compensate EUR 30 million of revenues from Deutsche Bank being lost and from other clients being won, we lose those 5% margin. Nothing we can do about it. So what do we need to normalize? Well, we have to outgrow the effect and/or the Deutsche Bank account, the top-2 account, let's call it like this, stabilizes. This year 2020, we expect the account overall to be EUR 90 million. Of course, we do not know, and we have no clear guidance from the bank where this will go to in '21 and '22, we expect something between EUR 60 million and EUR 80 million, right? This could be where it maybe bottoms out. So we do see it slow down. The reduction is getting smaller year-over-year. At the same time, nobody has asked yet, so let me bring it up. We heard that Deutsche Bank is cooperating with Google on cloud transformation. And we are expert a, in banking; b, in Deutsche Bank; and c, in Google. That's one of our main partners. Therefore, we do see upside from that, which might be part of that compensating and we do see the [ trial ] at EUR 60 million to EUR 80 million stabilize. With this, potential business in the back, nothing has yet been handed out, right? So this will take some time, but there are opportunities, and that should help stabilizing. So that's what we're facing. Therefore, we will have to outgrow it and/or stabilize the top-2.

[Operator Instructions] The next question is from the line of [indiscernible] with [ Kepler Cheuvreux ].

I have 2, if I may. The first one is on the strong growth you've reported in the Americas, U.K. and APAC division. Could you elaborate a little bit on the reasons of such a strong growth in the region? And why Brazilian banks have been so supportive. Does it mainly reflect strong demand for cloud-related projects, for instance? And my second question is on your business development with new clients. In Q1, you mentioned that you find it more difficult to sign new contracts with new clients [ who ] never met given the pandemic-related restrictions. How do you see the business with new clients to evolve going into H2? Maybe it does explain some deceleration in Q2 of your revenue growth with other clients that stood at 15% compared to 22% in Q1. Maybe given governments easing lockdown measures, you've already noticed easier business conditions in this regard?

Let me -- [indiscernible], let me start with that second question. The new client sales, you're right, right? It's already -- it mainly slowed down in Q2. So starting somewhere when was it, 20th of March, suddenly clients said oops, I'm in my home office, we can't meet and canceled all dates. And so it didn't that much hit Q1, but it hit Q2 pipeline building, and it hit Q3 pipeline building. So these were the main impacts that we saw. Of course, there's a bit of fallout for Q2, but it's mainly the next 2, 3, 4 months. And everybody had to get to his home office. And first of all, [ check ], can we still deploy software in our systems from back home. So every client, every bank -- mainly banks. These are the biggest part of our clients had to check on that. This took a while. And then suddenly, they said, okay, we can deploy. So we still can include software changes, let's go back to our vendors and talks began again. And talks had to be online or digital or video conference. It's no longer in the same meeting room with the flip board and everybody had to get accustomed to that. It took a couple of months to get accustomed to set up the technique. However, I think we're now back to this, let's call it, new normal. It's not normal yet. You don't meet so much in-person as before. But you meet even new client sales with clients you have not met before has become possible again. Of course, there were 3 months where it was very tough. But now it's -- you can do it again. Is it better if you meet in-person? Is it easier if you can do a conference, a marketing event? Of course, it is, right? So that will only happen in 2021. But we already have -- we do see we can support our non-top-2 growth with the sales -- potential sales channels we have today. Therefore, top-2 growth, as explained, reducing non-top-2 will continue to increase down to 14% for the full year, which means, yes, we will see a reduction in Q3 and Q4 versus what we had hoped for because initially, we wanted to do 20% throughout the year. And that's the COVID impact on the revenue that we currently mainly see. Your other question, growth in Americas and U.K. and especially, let's call it the 2 markets, Brazil and Canada on top. So U.S. is doing okay. We're compensating what we lose in Deutsche more or less, but Brazil and Canada is strong growth from existing clients and partially from new clients. In Brazil, we're growing with a bank called Santander, which is also big in Brazil by more than 100% this year. We're growing by a client called [indiscernible] by 90%. We're growing by the local stock exchange, BOVESPA by how much is it, again, 100%. And with the insurance company, SulAmérica 60%. Despite COVID, these clients are heavily investing into digitalization. Brazil, for sure, had a backlog because they had many years of low investments. Then Bolsonaro came like the Brazilian Trump despite what we see on the news in Europe for the economy, he's opened up investments like Trump did when he became President, and this is still ongoing and strong this trend. And therefore, we see that growth in Brazil. In Canada, the growth is competency driven. It is our -- the former [ V-NEO ] companies we acquired exactly 2 years ago. Our strong positioning in the local insurance market, which drives the growth. The biggest growth here comes from the biggest Canadian insurance group called [ Desjardins ] where we do see our growth nearly double this year. So strong growth there as well. So it is different reasons but mainly new technology that is driving the growth. Does that help?

That's very clear.

At this time there are no further questions. I hand back to Jochen Ruetz for closing comments. Please go ahead.

All right. Thank you very much. As always, a lot of people in the call in summer, right, despite holiday season. Now I wish you all a good summer season and talk to you soon maybe in a digital conference somewhere or with the Q3 numbers in November. Thanks very much for attending today, and bye-bye.