Jumia Technologies AG (JMIA) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to Jumia's results Conference Call for the Fourth Quarter of 2024. [Operator Instructions] I would now like to turn the call over to Ignatius Njoku, Head of Investor Relations for Jumia. Please go ahead.

Thank you. Good morning, everyone. Thank you for joining us today for our Fourth Quarter 2024 Earnings Call. With us today are Francis Dufay, CEO of Jumia; and Antoine Maillet-Mezeray, Executive Vice President, Finance and Operations. We would like to remind you that our discussions today will include forward-looking statements. Actual results may differ materially from those indicated in the forward-looking statements. Moreover, these forward-looking statements may speak only to our expectations as of today. We undertake no obligation to publicly update or revise these statements. For a discussion of some of the risk factors that could cause actual results to differ from such forward-looking statements expressed today, please see the Risk Factors section of our annual report on Form 20-F as published on March 28, 2024, as well as our other submissions with the SEC. In addition, on this call, we will refer to certain financial measures not reported in accordance with IFRS. You can find reconciliations of these non-IFRS financial measures to the corresponding IFRS financial measures in our earnings press release, which is available on our Investor Relations website. With that, I'll hand it over to Francis.

Good morning, everyone, and thank you for joining us today. I will start the call with an update on the business and greater detail on our growth strategy for 2025 and beyond. I will then turn things over to Antoine for a deeper look at our financials. Overall, 2024 was a year marked by continued progress against our strategic growth initiatives. Our focus was on building the business and positioning Jumia for long-term success. Throughout the year, we extended our reach beyond main urban centers into up-country markets, expanded our product assortment, improved our cost structure and enhanced our logistics capabilities. driving higher customer engagement and improved unit economics. Towards the end of the year, we've streamlined operations by consolidating our warehouse footprint and exiting our nonstrategic markets, South Africa and Tunisia. Following these exits, we continue to operate in 9 countries. These strategic actions have been crucial to our success. Excluding South Africa and Tunisia, our core marketplace business accelerated in Q4 '24. Physical goods order grew by 18% year-over-year with even strong growth in December, highlighting the increased demand on our platform. Quarterly active customers increased by 8% underscoring the strength of our platform and the value we deliver. Notably, these results were achieved while reducing marketing spend from $6.2 million in Q4 '23 to $4.8 million in Q4 '24, demonstrating our commitment to impactful cost-efficient marketing strategies. The key growth driver in Q4 '24 was our Black Friday sales event, our largest of the year held across 9 countries in November. The strong performance of the event demonstrates our ability to provide the right product at the right price for Africa's value conscious customers. In Q4 '24, demand was particularly robust in priority categories such as electronics and phones. In this quarter, our expanding international sourcing played a significant role in the success with 3.4 million growth items sourced for international sellers, mostly from China, accounting for 31% of gross items, up 61% year-over-year. We also strengthened our Black Friday partnerships with global brands like L'Oréal and Xiaomi, both top sponsors of the events. Operationally, we continue to improve our efficiency and the customer experience. Our Net Promoter Score rose to 63 in Q4 '24, a 17 points in year-over-year increase, while our 90-day repurchase rate increased 375 basis points year-over-year, reflecting stronger customer loyalty and satisfaction. Notably, 40% of our new customers who placed an order in Q3 '24 made another purchase within 90 days, up from 37% in Q3 2023. Despite strong momentum and robust customer demand, macro headwinds continue to affect our performance. GMV declined 12% in USD, but grew 13% year-over-year in constant currency, reflecting the impact of early 2024 currency devaluations and the reduction in corporate sales. As a reminder, beginning in Q4 '23, Jumia benefited from strong corporate sales to local and regional distributors, particularly in Egypt. However, this trend reversed in Q4 '24, highlighting the cyclical nature of demand. Average order value for physical goods orders decreased from $45.5 in Q4 '23 to $35.5 in Q4 '24. This decline was driven by currency devaluations and lower corporate sales. We view this mix shift as an opportunity to improve our relevance in selected categories, improve order level profitability and support healthy usage growth. Revenue in the quarter was $45.7 million, down 23% year-over-year in USD and down 2% in constant currency, driven by the same factors that I've just mentioned. Adjusted EBITDA was negative $13.7 million compared to negative $0.6 million in Q4 '23. Loss before income tax from continuing operations was $17.6 million in the quarter compared to $17.1 million in Q4 '23. Antoine will elaborate shortly on Q4 '24 loss before income tax from continuing operations. Cash burn for the quarter was $30.6 million compared to $26.8 million in Q4 '23. This was primarily driven by the following: onetime termination costs of $1.3 million related to the closure of our operations in South Africa and Tunisia. Working capital increase of $13.5 million, aligned with our strategy to expand assortment and secure more goods at competitive prices. While we significantly increased our working capital in the second half of '24, we expect smaller adjustments in the future. Capital expenditure of $1.8 million primarily invested in logistics equipment or fulfillment centers opened in 2024 and the payment of $2.1 million of equity transaction costs from the August at the market offering. Looking ahead, we are confident in our path forward. Jumia is a much stronger and much more efficient business than it was just 2 years ago. We have introduced greater operational discipline, started a clear usage growth trajectory and established a solid foundation to build upon in the coming years. In 2025, we will continue building on this foundation with a focus on 2 key areas: driving topline growth and achieving broader operational efficiencies to enhance profitability and strengthen cash flow. We see multiple levers to drive growth. First, upcountry expansion. We are doubling down on upcountry expansion to unlock new markets and address underserved regions without increasing fixed costs. Demand outside main urban centers remain strong with upcountry orders accounting for 56% of Q4 '24 and 54% of full year '24 orders, up from 49% and 48% in Q4 '23 and full year '23, respectively. Leveraging our differentiated logistics network and deep partnerships with third-party providers, we are expanding pickup stations outside main urban centers. We believe this expansion will drive lower fulfillment costs while strengthening customer trust and engagement. Our extensive 3PL network represents a competitive moat over other e-commerce players lacking the necessary infrastructure for delivery beyond major cities. Second, product assortment expansion. We plan to expand our product assortment at affordable prices by sourcing directly from intentional sellers. This approach allows us to procure high-demand products directly from key manufacturing countries like China and Turkey. China remains a strong sourcing hub, and we are strengthening our teams and deepening supplier relationships. Our progress in international sourcing is evident in our 2024 full year performance with 9.5 million gross items sold from international sellers, mostly from China, accounting for 28% of growth items, up 38% year-over-year. Outside China, we are diversifying our sourcing network by onboarding new sellers and adding products from other countries, including Egypt and Turkey. In late '24, we partnered with Hepsiburada, a leading Turkish e-commerce platform to introduce affordable Turkish brands to Jumia. Building on this momentum, we will continue scaling our international sourcing initiatives to drive rapid expansion. Third, customer and seller experience. In 2024, we updated our seller platform to streamline and simplify the seller experience. Beyond growth, driving greater efficiencies critical to achieving breakeven. We remain focused on marketing efficiency by prioritizing low-cost of free channels, such as our revamped CRM and localized offline channels like paper catalogs, reminiscent of the iconic sales catalog in the U.S. These off-line strategies, including bottom of the pyramid initiatives, drive strong engagement and credibility. We are also increasing our JForce presence with the number of active JForce agents reaching 29,000 in Q4 '24, representing a 39% increase year-over-year. Looking ahead to '25, we plan to further expand our JForce presence, particularly in regions outside the main urban centers. Then in logistics, we aim to increase productivity and benefit from our more streamlined warehouse footprint established in '24. We are also increasing productivity with automation in our call centers, where chatbots handle more basic customer inquiries. We believe our tech platform can scale significantly without material additional costs. Overall, I'm energized by our progress on business fundamentals now clearly visible in usage growth and efficiency metrics. We believe we have the right strategy and the right team in place to drive meaningful expansion across the business. By driving topline growth, improving operational efficiencies and maintaining disciplined expense management, we have a clear line of sight to achieve profitability. We are delivering positive gross profit after deducting all fulfillment expenses. In 2024, it was $57.6 million, which is 8% of total GMV. Hence, our focus is on building scale while further improving efficiency. The usage trends and GMV growth trajectory we delivered this quarter gives us confidence that we're on the right path. To summarize, we're optimistic about Jumia's future as 2 years of committed efforts are now delivering results. I'd like to thank our employees for their hard work and dedication during this time. We are now well positioned for growth and acceleration and further progress towards profitability. I will now turn the call over to Antoine for a review of our financials.

Thank you, Francis, and thank you, everyone, for joining us today. Let's start with a review of our topline performance. Fourth quarter revenue was USD 45.7 million, down 23% year-over-year and down 2% on a constant currency basis for the quarter. The decline in revenue was primarily due to lower corporate sales in Egypt. As a reminder, Jumia experienced strong corporate sales in Egypt starting Q4 '23 driven by high volume purchases from local and regional distributors. This trend reversed in Q4 '24 as corporate buyers scaled back purchases and macroeconomic uncertainties and shifting procurement cycles. For the full year, revenue was USD 167.5 million, down 10% year-over-year, up 17% on a constant currency basis for the year. Marketplace revenue for the fourth quarter was USD 22.8 million, down 31% year-over-year and down 11% on a constant currency basis. For the full year, marketplace revenue was USD 89.4 million, down 9% year-over-year and up 21% in constant currency. Fourth quarter revenue from first-party sales was USD 22.5 million, down 14% but up 8% on a constant currency basis. For the full year, revenue from first-party sales was USD 76.5 million, down 11% but up 14% on a constant currency basis. Turning now to gross profit. Fourth quarter gross profit was USD 23.9 million, down 36% year-over-year or 18% on a constant currency basis. For the full year, gross profit was USD 99.5 million, reflecting a 7% decline year-over-year, but up 23% on a constant currency basis. Gross profit margin was impacted by macroeconomic headwinds, including currency devaluation and reduction in corporate sales, as discussed earlier. Gross profit margin as a percentage of GMV for the fourth quarter was 12% compared to 16% in Q4 '23. For the full year, gross profit margin stood at 14% compared to 14% in 2023. Turning to expenses. We are pleased with the progress in reducing costs and remain committed to driving further operational efficiencies in 2025. Fulfillment expense for the quarter was USD 12.9 million, up 11% year-on-year and up 36% on a constant currency basis. For the full year, fulfillment expense was USD 41.9 million, a 4% decrease year-over-year but a 20% increase on a constant currency basis, partly driven by external factors such as fuel prices denominated in USD. Fulfillment expense per order, excluding JumiaPay app owners, decreased to $2.24, down 4% or up 19% year-over-year on a constant currency basis. Sales and advertising expense was USD 4.8 million for the quarter, down 24% year-over-year and up 2% in constant currency, driven by targeted online marketing spend as we focus on growing orders through supply expansion with minimal incremental marketing step. For the full year, sales and advertising expense was USD 17.3 million down 19%, but up 13% on a constant currency basis. As a percentage of GMV, sales and advertising expense was 2%, a 36 basis points increase from Q4 '23. For the full year, sales and advertising expense as a percent of GMV was 2% compared to 3% in 2023. Technology and content expense was USD 10 million for the fourth quarter, representing an increase of 1% and up 5% in constant currency. For the full year, technology and content expense was USD 37.5 million, down 10% year-over-year and down 7% year-over-year in constant currency. Fourth quarter G&A expense excluding share-based payment expense was USD 12.9 million, up 5% year-over-year and 9% on a constant currency basis. It's important to note that Q4 2023 G&A costs included a USD 9 million of nonrecurring tax benefits. And for Q4 2024, an 8.2% tax benefit reversal. Staff cost component of G&A expense, excluding share-based compensation expense, increased to USD 10 million, primarily driven by termination costs associated with our exit from Tunisia and South Africa. For the full year, G&A expense, excluding share-based compensation expense was USD 63.4 million down 8% year-over-year and 5% on a constant currency basis. Staff cost components of G&A expense, excluding share-based compensation expense, decreased to USD 34.6 million down 13% year-over-year. Turning to profitability. Adjusted EBITDA declined to a negative USD 13.7 million or negative USD 12.2 million on a constant currency basis for the quarter. For the full year, adjusted EBITDA was negative USD 51.3 million. While we use adjusted EBITDA as a supplemental measure of our operational performance, we would like to reiterate that loss before income tax from continuing operations captures items that are not included in adjusted EBITDA. One of these items is net finance cost. Net finance costs include effects related to our treasury activities, notably the impact of cash repatriation. These effects are not captured in adjusted EBITDA. In Q4 2023, despite adjusted EBITDA being essentially at breakeven level, Jumia's loss for the period was significantly affected by the financial cost incurred from treasury activities, repatriating cash to our headquarters. These costs are helpful in understanding the overall financial health of the company. By focusing on the loss before income tax from continuing operations, we include these financial expenses, which helps us get a comprehensive picture of Jumia's financial performance. In Q4 2024, the lower corporate sales reduced the need for repatriation thereby lowering financial costs. Adjusted EBITDA does not fully reflect this change as it does not account for the financial activities. Therefore, loss before income tax from continuing operations should be considered in order to gain a full review of Jumia's financial state, capturing both operational efficiencies and the impact of the financial results, which we believe are important to understand the company's overall progress towards sustainable profitability. The loss before income tax from continuing operations for the fourth quarter was USD 17.6 million, a 3% increase year-over-year or 19% decline on a constant currency basis. The higher loss was primarily driven by a USD 13.2 million decline in gross profit largely due to reduced corporate sales in Egypt, a USD 0.3 million decrease in operating expenses, a USD 12.3 million reduction in net finance cost during the quarter with both partially offsetting the impact on gross profit compared to Q4 2023. The loss before income tax from continuing operations for the full year was USD 97.6 million, 1% down year-over-year, and 8% decline on a constant currency basis. Turning to the balance sheet and cash flow. We ended 2024 with a solid liquidity position of USD 133.9 million including USD 55.4 million in cash and cash equivalents and USD 78.6 million in term deposits and other financial assets. This compares to term deposits and other financial assets of USD 85.1 million in Q4 2023 and USD 78.8 million in Q3 2024. Jumia's liquidity position decreased by USD 13.6 million in Q4 2024 compared to a decrease of USD 26.8 million in Q4 '23. In the fourth quarter, net cash flow used in operating activities was USD 26.5 million, driven by approximately USD 1.3 million in market exit cost related to South Africa and Tunisia, a working capital impact of USD 13.5 million, which was driven by prepayments to suppliers and payable cycles aimed at extending the supplier base and overall product assortment. CapEx in Q4 2024 was USD 1.8 million, higher than Q4 2023 due to investment to equip the new warehouses where we recently started operations. Effects for the full year totaled USD 3.7 million. We also paid a USD 2.1 million equity transaction costs from the August ATM offering. For the full year, Net cash flow used for operating activities was USD 57.2 million. In conclusion, despite the challenging macroeconomic environment, we delivered strong usage growth, underscoring that our strategy is working. We remain focused on optimizing costs while positioning the business for long-term growth and profitability. Our ongoing efforts to improve operational efficiency will remain a key priority in 2025. I will now turn the call back over to Francis for guidance.

Thanks, Antoine. . Let me turn to our expectations for 2025. Our focus remains on driving healthy growth, improving operational efficiency and positioning Jumia for profitability. We are currently observing favorable trends in the first quarter, giving us confidence in establishing our full year 2025 guidance as follows. We anticipate physical goods orders to grow between 15% and 20% year-over-year. This reflects the strong demand for physical goods items driven by our strategic initiatives outlined earlier. GMV is projected to be between $795 million and $830 million in 2025, a year-over-year increase of 10% and 15%, respectively, excluding foreign exchange impacts. We forecast loss before income tax to be in the range of negative $65 million to negative $70 million, a year-over-year decrease of 33% and 28%, respectively. Thank you all for your attention. We are now ready to take questions.

[Operator Instructions] We have a question from Brad Erickson with RBC Capital Markets.

To start, Francis, just right before this, you said you're observing certain trends in Q1. Can you maybe just give us a little bit more color on kind of what you're seeing right now?

Brad, yes, of course. So we think in Q1, continued progress on orders growth in usage, which gives us confidence to issue the guidance of 15 to 20 points of growth year-over-year. We're also seeing continued and strong execution and discipline on the cost side, which gives us confidence to guide on the net loss based on the -- well, on improved efficiency and cost management we continue to see Q1.

Got it. That's helpful. And then on order growth, obviously, you saw the nice acceleration with kind of the added inventory for the holiday. I guess question is like, is there anything preventing you from bringing on, say, more selection? It kind of seems like in some ways, you're almost supply-constrained. So what would be preventing you from kind of bringing on more selection leading to incremental demand? Or is that just as simple as that's what we're seeing in kind of your full year guidance?

Yes. I mean I think we've always been very clear that the challenge is more on the supply side than the demand side in our markets. We believe there's ample demand in Africa, but it's poorly supplied overall. And we as Jumia can really help pick that gap and solve the problem. So most of our focus has been on increasing supply and improving value for money for our customers. I would say there's no magic fix for that. It's a lot of operational improvements and a long list of actions to get there. It's not like we can double assortment tomorrow morning. It's a long process. What we see at what's happening at the moment we see that we have -- we're expanding again our customer base. We're growing our orders -- I mean, because we have more supply, better value for money, better price points, but is the result of couple of years of work focusing on that plan to deliver better value for money from onboarding new suppliers, local suppliers, bringing supply from overseas, improving the tools that we give to our vendors, so it's easier for them to list, improving vendor experience, improving operations for them. It's a very long list of actions. So there's no magic fix here, but it's a continued focus to keep on growing supply, keep on growing the vendor base, local and international.

Got it. That's helpful. And then -- just on the kind of 1P versus 3P mix, you mentioned the kind of cyclical trends in Europe -- sorry, in Egypt that affected things. Can you kind of just elaborate on sort of why that was, how to think about that mix and kind of your opportunities to acquire that first-party inventory and how that will kind of continue to evolve in terms of the mix between first party and third party?

Yes. So I think 2 parts to my answer. First of all, we indeed see a decline in corporate sales, which are largely first party, partially in Egypt. So we saw reduced bulk purchases from regional distributors in Egypt scaled back -- sorry, amid some level of macro-economic uncertainty, purchase factors have changed. So we're hitting kind of a low point when it comes to corporate sales at company level at this stage. We acknowledge the cyclical nature of demand here, but we keep on chasing this opportunity. And then when you look at our mix between 1P and 3P, I mean, we're very clear that we're pragmatic here. We're not aiming to increase 1P. We use 1P whenever it gets us better supply and better value for money for our customers. So we don't foresee massive changes in the mix of 1P excluding for the impact of corporate sales.

Perfect. And then maybe if you could just unpack the physical order growth from the overall order growth. What's kind of behind that mix shift? And what's the AOV effect as well from that mix shift and just kind of how to think about that going forward mix-wise?

Yes. Of course. So when we look at physical orders growth, it's definitely driven by all the levers we've been pulling over the past 2 years. So upcountry expansion, as we explained, better assortment and better value for money in pretty much all the countries, better customer experience as we explained today and more efficient and more relevant marketing tactics in -- I mean relevant to the countries where we operate. That translates into growth by categories and drives our mix also in a certain way. So we explained, I think, in one of the previous quarters that we had a mix shift towards more fashion that decreased the AOV at that time. We explained this quarter that we saw quite some success in categories such as electronics that has slightly higher AOV. The way we look at it is the following. The AOV is just a consequence of the mix. We want to be the best and deliver the best value for many in each of our priority categories, fashion, beauty, smartphones, electronics and home and living. And by delivering the best value for money in each category while we grow the best business in each country. This leads to different -- I mean, to mix shifts and different mix of categories at country level, but we don't see it as a problem. We don't see a lower AOV as a problem because we are very, very focused on unit economics at order level as we make sure that we maintain the right economics, even if the AOV is lower, it depends on the categories. To give you a quick example, for example, for electronic accessories, the AOV would be lower than for appliances. But our take rate, the commission we will be making would be obviously significantly higher. So all in all, we make sure that we are profitable at the level after fulfillment costs, whatever the category and what whatever the impact of the mix. And with that, we see the mix shift as an opportunity because it actually enables us to penetrate -- to increase penetration in specific categories and in our markets. It enables us to feed -- I mean, to fuel our growth in active customers, our growth in orders this quarter, it's because we're managing to penetrate better specific categories that may have a lower AOV, but it's not a problem for our business.

Yes. Understood. That's great. And then when you talk about consolidating what you've been doing in terms of consolidating your warehouse footprint in some markets, can you help us just maybe like a market level, like what does that do efficiency-wise from like a service level perspective and then obviously, cost perspective? Anything you can share there would be helpful.

Of course. So we had inherited, early '23, a logistics setup with massive inefficiencies. For example, in countries like Egypt or Nigeria, we had 3 warehouses or more in the same city. So smaller locations that required a lot of moves in between and really prevented us from getting greater efficiencies and economies of scale. So what's happened in '24 is that we have consolidated -- in most of our countries, we have consolidated several small warehouses or fulfillment centers into 1 big one. That's actually able to store more products and that enables us to have a much better control and efficiency, staff productivity, security and going forward, deliver much better efficiencies when you look at fulfillment costs. So all those changes have been done mostly in the second half of '24, which took us some time, took us some focus and took us some money. And that's why you also see limited improvement at the end of '24 in terms of fulfillment efficiency, so fulfillment cost per order, but it gives us confidence when it comes to achieving a lot more savings on fulfillment in '25 now that the hard work, the structural work has been done.

Got it. That's great. I have maybe I have a few more here. Thanks for putting up with me. Maybe one for Antoine. Where are we from a kind of a fixed cost basis as we start out '25? You made a lot of reductions obviously, over the past year or two. Just where are we kind of in terms of the fixed cost base here going forward?

You saw that over 2024, we've been able to reduce drastically the cost, I mean, over the last 2 years, where we are now is, for sure, we are not going to divide by 2 the level of our staff nor the level of our tech cost. But what we believe is 2 things. First, we can get another 20% efficiency. And that's what we are doing as we speak. So 20% of cost. And the second thing is that with this cost structure, we believe we are able to operate -- to process between 2 and 3x the volumes we have now. So it's a mix of cost reductions and increased efficiency.

Got it. And then maybe to expand on that just a little bit. That's really helpful on the kind of volume front. I think you've talked about this in the past, but just kind of like some sort of magnitude of order volumes from current levels, what it would be necessary to achieve profitability. Can you just update kind of relative to your comments a minute ago?

Yes. So I mean, if you look at our gross margin after fulfillment costs, you'll see that we are in a range between 6% and 8% depending on the quarter and the volumes. And so what we believe with the fixed cost, which is fixed is that we would require the volumes, all things being equal, to between double and triple to get to profitability.

Got it. Okay. That's great. And then last one -- sorry, go ahead.

I'd like to give an example of something which is a big bucket of cost in our P&L. It's hosting -- for hosting is a significant cost, and we had inherited quite expensive setup from the past. Not only we've been able to reduce the cost of this contract, but the way we have set up our platform, our software now results in a less consuming operations. So what would take 10 one year ago, consumes today 5. So it's a double effect of better negotiations on the contract and better utilization of our infrastructure, which results in us believing that we could do much more volumes and not paying anything more to the hosting provider that we are using.

Got it. And then last one for me. You mentioned the balance sheet obviously feeling better now given the stronger cash position. Just given kind of your inventory strategy and thinking about your volume growth guidance this year, do you feel like you are kind of where you need to be as we look forward into the year and into the holiday and looking a little far ahead at this point, but how are you feeling from that perspective?

Maybe I'll take the first part of the question, and Francis will take the second one. When you look at the cash flow this year, you can see -- in this quarter, sorry, you can see that the impact of working cap was significant. And this illustrates what we said we would do when we raised cash in August. We were not going to increase the marketing spend, but we stick to the strategy, which consists in offering better supply. Offering better supply is buying more products and making sure -- in prepayments or inventory, making sure that we can be favored by the suppliers, the vendors we are working with and payment terms is very important in Africa to get there. So we have increased the level of our working cap. And as Francis mentioned, we believe that we'll have only adjustments in the future, but that we are not going to increase it as we did in Q4.

Yes. Adding on that, fully aligned with Antoine, we explained that in Q4, we increased working capital by $13.5 million, which is significant and is in line with our strategy and what we said after the ATM. So we were going to push supply and invest in supply. We believe it's a better allocation of our money than handing it over to -- I mean putting excess marketing budget, I would say. Going forward, we expect this impact quarter-over-quarter to really moderate. I mean we're not going to increase the working capital by such magnitude in the next quarters, definitely. And it puts us, I believe, in the right place. It really helps us to fuel growth, customer acquisition and order growth. It puts us in the right place so we can attract more vendors, get better value for money and better selections for customers.

This does conclude the end of today's question-and-answer session. So I will hand it back to Mr. Dufay for any closing comments.

No further comment. Thank you for your attention and looking forward to catching up next quarter.

Thank you. This does conclude today's conference, and you may disconnect your lines at this time, and we thank you for your participation.