Haci Ömer Sabanci Holding A.S. (SAHOL) Earnings Call Transcript & Summary

Hello, everyone. Welcome to Sabanci Holding's Second Quarter webcast. Please refer to our disclaimer before we begin our presentation. Today, I have our group CEO, Cenk Alper, and Group CFO, Orhun Kostem with me. I now would like to leave the floor to our CEO for opening banks. Orhun and I will be talking about our financial performance more in detail in the remainder of the call.

Thank you, Karen. Hello, everyone. Welcome to our second quarter webcast. I'm Cenk Alper, Sabanci Holding's CEO. I'll start by talking about the major events that affected our group in the first 6 months of the year. Orhun and Kerem will provide more details on our financial performance. The first half of the year was exceptionally challenging, resulting from the devastating earthquake, high volatility in local macro environment together with uncertainties around elections as well as difficulties in the global markets due to the recession in major economies. Although is in the beginning of the second half, global recessionary environment in the first half had made a slight impact on the volume performance of our export-oriented portfolio companies, such as cement, tire composites and tire reinforcement businesses. Yet those companies benefited from robust demand in the domestic market and offset the slowdown in the export markets and maintained their earnings growth momentum. In terms of local macro environment, high inflation continues to affect our businesses, especially on the wages as well as sharp price increases on local materials and services. In addition to inflationary pressures, demand volatility in different businesses was another important fact that was experienced in the first 6 months. Moreover, rapid changes in the regulations had a major effect on our group companies. Yet, we managed to act proactively and in an agile manner to better position our group against such challenges, owing to our close monitoring of regulatory landscape. Thanks to these efforts, we managed to sustain our profitability to further maximize shareholder value. All these macro challenges that I mentioned that even more stretched up until May as the country was under the influence of long-awaited elections. We, as a group, continue to remain cautious in this extremely volatile period but stick to our investment plans and capital allocation strategies that we have been addressing since mid-2021, which we define as the new economy. We have reviewed multiple options and investment opportunities, both in Turkey and abroad, that fit our capital allocation criteria to continue to deliver on our group purpose that we have been highlighting at the very beginning of our strategy house. We unite Turkey and the world for a sustainable life with leading enterprises. In this volatile and challenging local and global macroeconomic backdrop, I'm happy to see that we have managed to improve our numbers at every level and even performed better than last year's numbers, which was a period that had marked by hyperinflation. Our earnings quality prevailed in the first 6 months as our 50% year-over-year net income growth comfortably exceeded 42% EBITDA growth in the same period. Our operational cash flow surged 8x compared to previous year. Our ROE in the first 6 months reached 38%, driven by both bank and nonbank businesses. The group's balance sheet remains strong, and our favorable FX position benefits any currency volatility and reinforces our healthy balance sheet as evidences at the first half. Our liquidity, especially at the holding level, continued to be solid even after adjusting for the dividend payment, which has more than doubled compared to a year ago. I'm confident that we'll continue to reap the benefits of having a diversified portfolio of companies that is enabling solid and sustainable financial performance despite local and global economic volatility. This, I believe, will continue to be a major competitive advantage for Sabanci Holding. Aside from strong financial performance, we continue to bank our building an ecosystem within Sabanci Group. In addition to investments in core and new businesses, we are also aiming to sustain our -- building a sustainable ecosystem team with our venture capital investments as well. In that respect, Sabanci has completed 2 new deals in the first half of the year, including, first, APAC-based investment in a green hydrogen equipment company and reached a total of 9 investments and a total investment amount of $10 million. These are all separate from our other venture investments in Energy & Climate Technologies. Corporate Venture capital investments are an essential component of our growth strategy as well as an instrumental tool to foster innovation and create value in our existing businesses as it helps us build synergies and commercial collaborations across Sabanci Group. We are also increasing our global footprint with 4 of our last 5 investments being headquartered abroad. While concentrating on strategic priorities and financial performance, we also kept our focus on ESG as it is an integral part of our group strategy. We have been prioritizing sustainability in all our investments, not only for the future of Sabanci Holding, but also for the future of the world. Let me talk about our successful implementation and execution on ESG principles. With the aim of being pioneer in sustainability as a business, we continue to accelerate our investments in the areas that support the United Nations' sustainable development goals. With our projects and new economy-oriented businesses, we aim to reach net zero emissions by 2050 as our ultimate target. In that respect, we have already defined our interim Scope 1 and Scope 2 emission reduction targets in line with the science-based target initiative, a major step towards our net zero goal. According to these science-based targets, we will be decreasing our Scope 1 and 2 emissions by 42% as of 2030 with 2021 base year. As of 31st of December 2022 last year, we have already reduced our Scope 1 and Scope 2 emissions by 11% comparing to 2021 with group efforts and sustainable to dedicated projects. Specifically, our Building Materials and Energy Group companies played a vital role in reducing scope 1 and 2 emissions. We aim to attain a 15% reduction, not later than end of 2025. Let me give you some additional facts and figures about our ESG performance. We reduced our energy consumption by 12%. We increased our renewable electricity consumption 3.3x compared to 2021. On the other hand, we produced 31% more renewable electricity in 2022. We reduced our water consumption by 9% comparing to 2021, and we increased our water recycling rate from 23% to 31%. So to sum up, 2022 has marked the reversal of a business-as-usual trend in which companies are expected to increase their footprint while growing their businesses. This was not the case at Sabanci in 2022. Moving forward, in the next 4 years, energy continues to be the major driver of our low carbon growth strategy as 1 out of 3 wind and solar power plant investments in Turkey will be made by us, Sabanci Group. This also means adding 10% in Turkey's existing installed wind power capacity. Through our businesses -- through our business strategy and ESG integration into our capital allocation decisions, we manage our new investments on the excess of sustainable to related areas. In this regard, we project our CapEx and OpEx in the activities associated with the United Nations sustainability goals to reach $5 billion among 2027 year-end. I try to give you a color on our investments, financial performance and ESG initiatives. Now let me hand over to Orhun to speak on our financial performance more in detail. Orhun?

Hi, everyone. Good morning and good afternoon, wherever you are. This is an Orhun Kostem speaking. I'm happy to report we had a great set of results at the end of the first half 2023, especially I'm sure you must have seen that our second quarter results have been much better than what we have reported on the first quarter, and I would be more than happy to touch base some of the details around that. I won't go into any detail in this page, except for the fact that we're looking at -- in summary, an NAV growth of 43%, still NAV discount of about 29%, and our CapEx to sales ratio have been gradually improving, and this has come to 8.6% from 7.4% compared to the first half of 2022. Now on next page. As far as the macro backdrop is concerned before we move into the details of the financials. We're looking at a relatively better environment when it comes to commodity and energy prices compared to last year, when we take reference of Bloomberg index as we have seen an easing on the cost of commodities and energy in general. In Turkey, obviously, one of the things that we have been following, and I'm sure you must be looking at is how the minimum wage has been increasing with a recent increase after the reporting date of our first half results. But obviously, from the first half of 2022 to first half of 2023, if you take the end of 2021 as an index, we're looking at about 280 compared to 100 index at the end of 2021. Now the consumer price index at the end of June has been recorded at 38%, that's roughly half of what it was a year back, still high, but nevertheless came down. And the FX, if you look at the basket -- how the basket has changed in the first 6 months, is 36%, pretty much in line with the top line inflation. As I'm sure, going forward, we still look at a lot of volatilities and again, I'm sure you must have noted, in the month of July, the inflation has started to pick up again. Now in this macro backdrop and a relatively still volatile environment, I'm happy to say that we have grown our top line by 59%. Our EBITDA by 42% and our net income by about 50%. And I'm also quite happy to say that our net income growth has been contributed both by the bank and the nonbank businesses. I'm going to talk about the banks, but later when I talk about the details in the quarter. But as you see, the return profile of the bank is normalizing as is in the general banking sector, whereas I'm pretty sure you must see that [ how bank ] does did announce a great set of results compared to its peers and sector in general. However, I would also like to draw your attention to the fact that in the nonbank business, we have been able to deliver what we call a quality growth. What we mean by that is as a top line growth, in this case, by 44%. We've seen our bottom line growing faster by about 51%, which suggests a more profitable growth on a year-on-year basis. This is also reflected in our return metrics. If you look at our return on equity, we're quite happy with the trends, where we've seen -- the basis increased by 33.6% million to 37.8% at the end of the 6 months in 2023, so above the 420 basis point improvement. Again, in nonbank case, there's a 60 basis point improvement where the bank's return metrics are, as I said, normalizing. It was quite interesting, again, on the nonbank side, if you only look at the second quarter, our nonbank businesses have delivered a return on equity of about 48% compared to 30% in the second quarter of 2022. So that base have been gradually improving and now stands at 48% in our nonbank business. And we have seen a whopping 8x growth in our operating cash flow to TRY 16.6 billion from TRY 3 billion back in 2022. But in all fairness, if you have listened to us last year as well. Actually, the TRY 2 billion was out of ordinary -- the base of 2022. This was driven by the fact that the price equalization mechanism for our retail electricity business have only normalized towards the end of 2022 and actually created this anomaly within the period. So strong operating cash flow generation, we are quite happy with 8x is great. But again, we need to be careful about the base of last year in that sense. Nevertheless, if you look at our balance sheet details, we still have about TRY 4.5 billion of net cash, that's roughly about $176 million. That's only holding company cash we're having. And our net debt to EBITDA have -- well it's come down from 1.3x to 0.5x compared to end of the first 6 months of 2022, more or less at the same level when you compare it with the end of 2022. In the meantime, as I said, but let me underline again, we continue our investments and our CapEx revenues on our nonbank businesses have grown from 7.4%. This is 2022 to 8.6%, which is the first half of 2023. So in spite of the fact that we continue growing our CapEx, as we have communicated, we still manage a fairly healthy balance sheet. And we still believe we have enough ammunition to continue investing for growth. On the next page, if you look at the second quarter results, First of all, if you look at our second quarter revenue growth has been 45%. That is a 75% growth on the bank side and 30% growth on our nonbank businesses. On the bank side, in this period, obviously, the fundamental banking returns were positive from trading income to portfolio returns, et cetera. However, what I would like to draw your attention specifically is how the digital customer acquisition has been moving forward in the bank. And you remember last year, we've reported that the bank has acquired some 2.3 million new customers digitally. On top of that base now, it has grown another 1.3 million customers. So within 1.5 years, that base has grown by a whopping 42%. And of course, that growth results in market share expansion, cross-sell opportunities and obviously, a very healthy and strong contribution to the -- performance of our bank, which we're happy with. On the nonbank side, as I said, the revenue growth was 30%. You're going to see this is actually mostly driven by the fact that in our generation business this year -- the business is mainly driven by renewable energy generation contribution together with Hydro where we're going to see what I mean in the next few pages where we have a very strong profit generation. However, the top line growth has been somewhat subdued in this quarter due to the mix, especially coming from Generation business. Having said that, we're quite happy how our Building Materials business' top line is growing, our digital segment or financial segment has been growing, all of which are contributing to our overall nonbank top line growth. If we get to the EBITDA, here again, we see a 51% growth of EBITDA in the quarter faster than our revenue growth. On the bank side, this is a 44% growth on the nonbank businesses is a 69% growth. There again, the EBITDA growth has more than doubled compared to the top line growth. As I said, the profitability in [ corrects ] itself. On the energy side, again, now this time in Generation, the shareholder renewables have been increasing, which are -- which is making us happy with positive margin and profit contribution. Hydrology in the second quarter after April became much better than what the output was in the first quarter, again, therefore, heading for the profitability despite the fact that the electricity prices are low and the output of our natural gas plants in Bandirma have been limited due to, let's say, 2 stoppages of generation in the period. Other than that, again, if you look at our Building Materials business, the EBITDA growth has been 99%, digital side 71%. Financial Services. EBITDA has been growing quite significantly. But again, you remember the base last year was low, especially for our non-life insurance business this year. Obviously, it's premium generation of our insurance businesses as well as the EBITDA contribution has been much, much better. If we get to the net income for the quarter. Here, the growth is 73%. Now again, much faster than how the top line has been growing [indiscernible] whereas the nonbank businesses net income growth. If we exclude for the, of course, one-off items in the period, is 108%. Now the energy business contributes the fastest 137% growth, Building Materials 174% growth and Financial Services over 300% growth. And the Industrials business net income is not growing in this quarter. It was not growing in the first quarter either. You remember that was due to the fact that in [ Kordsa ] global footprint and global markets, there's a very serious demand and price competition, A, because of the economies, either slowing down or contracting, impacting the overall demand. And secondly, of course, given China has slowed down considerably. There is now a lot of Chinese products in the market, which creates a lot of pricing tension. So you'll see a decent cash flow from[ Kordsa ] results pretty much in line with our plans for the year. However, compared to last year, we see some slowing down in the overall Industrials, although business continued to be doing quite well. With that, I'll move on to the next page and talk about our NAV growth, which was at 43% on a dollar basis. compared to the same quarter of last year. Again, compared to the same quarter of last year, we have some 6% reduction in our NAV discount. If you look at the last 3 to 5 year averages, obviously, we're looking at 40% to 42%. So we have now stabilized our NAV discounts in a much healthier level. If you look at the contribution to our NAV, that you see on the graph on the right-hand side of this page, obviously, it seems that the banking and financial services has the highest contribution which of 36%, followed by our materials businesses, mostly industrial and building materials is 29% and then followed by energy, which is 22%. Now if you look at this page and if you turn to the next page, you see the pretty much the same breakdown on your pie chart on the left-hand side. However, as you will all -- I'm sure you must have all noted and seen, and if we haven't noted and seen we must have reached that to you and told you that given our initiative around merging our subsidiary, [ Agesa ] with Sabanci Holding on an integrity to simplify our structure basically. So there is much clarity on businesses like Sabanci's group joint venture that produces electric buses, which we are hopefully going to have a direct ownership now and not through [ Agesa ]. Through that process, we have -- by regulation, we have had to produce an independent evaluation report, which was produced by Eva at the time. And if you look at some of the valuations for our non-listed companies, in particular, Enerjisa rating. On the right-hand side of this page, you see a much more balanced breakdown of NAV, where the energy businesses now account for about 40% banking and financial services from 27 advanced materials technologies from 21. And digital is up and coming. It's quite small. We started last year. As you've seen the top line has been growing quite satisfactory. However, it's still coming off a small base. And even though NAV growth was quite nice, and we have been able to grow still over the best in the last 12 months. So if you look at since the start of the year, we are pretty much in line or maybe slightly above this 30%. This is hardly reflected on our price-earnings ratios, especially if you compare to our historical levels, there is a slight improvement. However, it seems there is much, much more opportunity for us to move forward. Now with that, I will leave the floor to Kerem so that he could take us through the details of our business segments. And then I'll talk about our midterm guidance again.

Thank you, Orhun. Let's start segment discussion with energy. As for the generation business as a result of lower spot prices and lower natural gas volume due to stoppages in natural gas plants, revenues dropped by 55% compared to last year. Despite low natural gas profitability, because of production stoppages and low spot prices, EBITDA was up by 65% compared to last year with positive contribution from renewable assets, thanks to higher water inflow, higher dark spreads at core plants and positive asset wide contribution on higher trading activities of Enerjisa commodities. In addition to positive EBITDA performance, higher FX income supported bottom line and net income more than doubled in Q2. With regards to Enerjisa Enerji, operational earnings driven mainly by strong growth from distribution business as well as Retail and Customer Solutions segments. Distribution business generated growth both from its return on assets and investment activities as financial income increased on the back of higher inflation and investments as well as the IFRIC financial income calculation methodology change, which has incorporated in Q3 last year. Further on, please note that the negative impact stemming from the [ 780 million ] OpEx booked in Q1 related to the earthquake have now been classified as pass-through non-contributable OpEx. CapEx increased massively on higher inflation as well as lower activity level at the first half of [ 2022. ] In Retail segment, gross profit margin recorded on the back of higher energy costs and increased cost coverage for higher inflation and [ doubtful ] receivables. Our customer solutions operational performance increased significantly driven by new solar projects where we installed solar panels on customers' facilities providing them with access to green energy as well as positive impact from FX gains. Moving on to bank. The bank ended the quarter with [ TRY 20.3 billion ] net income, up an eye-catching 90% quarter-on-quarter, resulting in solid 5.8% return on assets and 50.3% return on equity. Buffers remain both on ROA and ROE as the bank used 40% for CPI [ interval ratio ]. Akbank added solid 1.3 million net active customers year-to-date. This is on top of net 2.3 million acquired last year, taking its active customer base to 20 million, up by 42% in the last 1.5 years. This customer acquisition has resulted in record high market share gains across the board in consumer loans, broad-based deposit base and demand deposits. More importantly, customer acquisition continued with higher for sale ratios. All these lead to fee income market share among private banks to surge by 250 bps in the first half of 2023 according to the BRSA monthly data. Also worth to underline that while growing due to prudent risk management, the profitability of default of the portfolio didn't increase. With the agility and balance sheet management, timely hedges, and strong customer-related business, Akbank once again delivered its exclusive treasury management, further boosting net income. Akbank proactively complies with regulations while focusing on maturity mismatch. In addition to this, the bank keeps its leading position in capital with a robust figure of [ 17.1% ] which will continue to provide the bank's significant competitive advantage going forward. Please keep in mind that in July, Tier-2 issuance, capital adequacy ratio would have been higher at 17.8%. The Financial Services segment. It is another quarter with a robust performance as top line growth reached 94% year-on-year driven by life and nonlife business. Segment's EBITDA more than tripled with the contribution from both businesses. In the Life business, EBITDA was up by 10% year-on-year, thanks to the growth in pension assets under management, higher profitability in return premium products, driven by [ TL ] depreciation and positive impact of cumulative profitability. Net income has more than doubled, thanks to higher technical profitability as well as strong financial income owing to favorable interest rate environment and higher FX gains on weaker [ TL ]. In nonlife business, despite the company's conservative approach in motor third-party liability, top line growth reached 96% compared to last year, thanks to favorable trends in non-motor segments. Underlying net income performance remained somewhat under pressure because of additional provisions related to the concessional court decision on motor third-party liability and impact of minimum wage increase in technical provisions. Despite weakness in our net underlying net income, EBITDA performance significantly improved compared to last year, thanks to [ retail ] and profitable trading transactions during the second quarter. Because of a strong EBITDA pass-through, net income sharply recovered from a loss last year. Moving on to Building Materials. Segment's top line increased by 45% as local demand, especially in Bandirma region remains strong. This strong top line growth is achieved by focusing on sales mix optimization despite lower volumes compared to last year due to Çimsa's and other plants sale on July 2022 as a part of its network optimization strategy. In addition to better sales mix, higher energy margin and sales mix optimization led to strong EBITDA growth and margin. The alternative fuel usage in both companies is standing at 25%, which is well above Turkey's 10% average. The segment's net income almost tripled compared to last year, thanks to positive impact of declining net financial debt and higher FX income. For Industrial segment, compound revenue growth grew 21% year-on-year in Q2 due to the continued weakness in global tire reinforcement market, leading to a lower sales volume, this weakness, offset by strong demand in tire business driven by original equipment markets. Although EBITDA growth of tire business remained strong in the quarter, owing to favorable pricing and sales mix, Industrial segment's EBITDA margin deteriorated due to the weakness in tire reinforcement business on high-priced raw material inventories. Net profit declined by 16%, led by higher net financial expenses due to increasing debt position related with the financing of Microtex acquisition and increasing financing costs. Moving on to Digital segment. The segment's top line growth more than doubled with a higher contribution from electronics retail business, driven especially by strong demand and market share gains. In addition to physical store sales, which are the major driver of basket growth, e-commerce sales, positively contributor to the segment's top line growth as gross merchandise value almost tripled. Our new digital marketing and cybersecurity companies also contributed strongly to the top line growth on higher sales in cloud technology and architecture services in Sabanci DX and higher sales in advanced analytics and product business line in [ Oportun ] formerly known as [ SAM. ] Segment's EBITDA is almost doubled. Thanks to strong top line growth despite higher fixed cost-to-sales ratio due to ongoing integration process in new digital marketing and cybersecurity companies and adverse impact of minimum wage hike in electronics retail business. Higher FX losses and higher financial expenses because of higher borrowing costs [indiscernible] net income growth. On Retail, segment's revenues increased by 87% year-on-year, remaining well above the inflation driven by higher average basket size and organic growth in physical stores. While EBITDA growth remained at 60%, EBITDA margin declined 100 bps due to negative impact of minimum wage increases. The adverse impact of high financial expenses continued to affect the bottom line growth. Now I would like to leave the floor to our CFO, Orhun, to speak about the guidance.

Thank you, Kerem. As you remember, our midterm guidance is to grow our top line 8% percent better than the top line CPI and our EBITDA to be 10% better than the top line CPI. Just to give a brief color on this. We've looked at the past 2 years after we've announced our midterm guidance. And we've seen that our combined net sales have grown 23% and 49% above the top line CPI. And our EBITDA has grown 36% and 100% above the top line CPI for the past 2 years. So we're comfortably ahead of our midterm guidance. But obviously, we're going through quite volatile periods moved into hyperinflation and then expect that to potentially come down in the coming years. So we will continue looking at our midterm guidance going forward. For the time being, it is maintained. You will also remember that we had one addition to this where we added our 2030 guidelines on sustainability, where we have said we're looking a 42% reduction in Scope 1 and 2 emissions by 2030. So that's the -- that has been the recent addition to our midterm guideline. So with that -- I think as we've gone over to the topline as [indiscernible] has given us the highlights for the first half. In general, we are happy to report a strong set of results with a healthy balance sheet and our acquisitions performing actually better than our expectations. Again, just to give you a color before we move into the Q&A, I'll just -- you remember Arvento acquired by [ Brisa ] last year, Microtex acquired by Kordsa. And of course, our Bunol acquisition, we have been acquisitions by our subsidiaries. By the end of the first half, for example, Arvento has been doing about 20% better in terms of our EBITDA performance compared to our initial anticipation, this is about 40% for Bunol and about 10% for Microtex. So this, again, going forward, we expect to be positive contributors to our operations as well as to our profit and value performance. And with that, we'll be happy to move forward to take your questions.

[Operator Instructions]. The first question from [ Hanzade ]. Few questions on subsidiaries in [indiscernible]. Do you think more than 40% EBITDA margin in generation business is sustainable in the remainder of the year? What is the general guidance shared by the industrial companies for the rest of the year? And third question, do you see any scope for higher dividend income from nonbank companies in 2024? [indiscernible] as it was in Scope to improve dividend payout ratios. If so, which company would particularly mention.

Let me take this. This is Orhun speaking. [ Hanzade, ] really thanks for the questions. On generation business provided that, A, we're looking at reasonably a good hydrology for the remainder of the year. There is no difference in terms of the pricing metrics or pricing dynamics in the market. Yes, there is no reason why we should think of a much lower EBITDA margin for rest of the year. What we have done so far, as I said, was relatively lower contribution from dark and spark spreads, and that was met in general by renewable and hydrology. And again, our trading business in general provided a positive outcome. As long as these conditions continue, yes, you shouldn't expect any serious changes there. For the industrial companies, obviously, we're not looking at a year. I haven't seen their guidance per se. But for us, as we discussed, [ Brisas ] holding on to their profits and their cash flows, maybe not growing significantly year-on-year compared to last year. But nevertheless, we believe so far they have done a good job basically given the conditions. So more or less, let's say, flattish given the relatively difficult circumstances, I would say the same for [indiscernible] as well. Again, as I said, we're not looking at the year of growth for our industrial businesses. Having said that, we're looking at holding on to profits basically. We are expecting to see good cash flow performance in general, which we feel to be quite important in a year like this where we see demand pressure in the market. Going forward, yes, higher dividend income could be. I mean, in my mind, these are 2 different questions. The dividend payout ratios could change, but more importantly, some of our dividend contributors have been changing. What I mean is Enerjisa Üretim, for example, has been a quite strong dividend contributor over the past 2 years, distributing something to the tune of $150 million basically. So we see that flat to positive on the side that you don't see as public companies. So the answer in general is yes, in my mind, not because there will be major changes in dividend payout ratios, but the absolute growth -- profit growth of the nonbank businesses can continue to perform quite well, especially the energy business is -- has the dividend and potential to match our bank business, which has been, as you know, the largest dividend contributor historically. I hope that helps, Hanzade.

Sashank, you may proceed asking your question.

Yes. So I think my question was already answered on the Industrials business. I just want to understand the outlook given -- this was probably the only segment that kind of underperformed related to others. But I think the question was answered.

Thank you, Sashank. Again, as I said, it's for both of those businesses, if you look at even the global peers, there's a similar picture this year. We're quite happy that we have been able to maintain the profit levels of the businesses together with strong cash flow generation, which have been our priorities in a year like this.

[Operator Instructions]. It seems we have no further questions. Thanks all for joining the webcast. Hope to see you in next quarter earnings. Thank you.

Thank you very much, and bye for now.

Thank you. Thank you very much for participating in our webcast.