KRUK Spólka Akcyjna (KRU) Earnings Call Transcript & Summary

Hello, and welcome to the KRUK Full Year 2022 Results. My name is Elliott, and I'll be coordinating your call today. [Operator Instructions] I'd now like to hand over to Marta Wasilewska. The floor is yours. Please go ahead.

Good morning, or good afternoon to everyone joining. My name is Marta Jezewska-Wasilewska and I represent WOOD & Company, host of this call. Today, we have a pleasure to listen to Michal Zasepa, CFO of KRUK, to present excellent 2022 results, and allow you to ask any pending questions. Michal, the floor is yours.

Marta, thank you. Good afternoon or good morning, everyone. Thank you for your interest in hearing the commentary to this year results. I will use the presentation that is available on our website about the results and refer to the slides I'm looking at. So indeed, this is the best year we've had in many respect. I'm looking at Slide #3, record high net profit of PLN 805 million, record high cash EBITDA, record high recoveries from debt purchased and it's more important that on retail unsecured, which constitutes 90% of our assets, all of the markets performed according to plan or above plan. And also last but not least, record-high investments in debt portfolios and quite decent IRRs. You can read in the report and presentation that we expect 2.2x money on the investments from '22. And these results come with high ROE of 25%. If I'm not mistaken, it's one of the highest in the industry among publicly listed debt purchasers and also a relatively low indebtedness at 2.1x net debt-to-EBITDA. The business grew to about PLN 7 billion of assets. If you look at Slide #4, a few highlights that we'd like to bring to your attention. We continue on the path to become more digital and there is significant increase in number of e-KRUK users, predominant majority of our repayment plan settlements are now paperless and there is a significant effort to become more digital in many areas, more about that in a moment. So it's been a good year operationally too. We are now measuring ourselves according to ESG, I think more. We know more how quite balanced we are, for example, we are quite balanced in the gender equality. You see here 60% of our top management is women, something we're proud of. It's also a year where we became a blue-chip now officially in Poland, a part of the Top-20, WIG20 index, and we intend to stay there. Looking at Slide #5. This is a view as of end of 2022, where we are and what we want to do. So if you look at us today, if you look at our history, please remember, we are a company that succeeded I think quite significantly in growing organically, building from scratch, making small acquisition of relatively small organization and then making them bigger businesses, which are KRUK-like businesses replicating the culture and the mode of thinking about how to manage business, but building local businesses, local strong businesses. And you can expect that, that will continue, meaning our preferred need for growth, which historically proved to be very good in creating value for shareholders is preferred -- is organic growth. It is not to say you never do an acquisition, but the first mode, the first approach would be why don't we do it ourselves, because we think it will be more value creative than buying some big competitor with all the problems associated with that. And that strategy proved I think quite successful if you look at our ROE and the growth of value we've had for this past 25 years. Our focus is consumer unsecured portfolio purchases. They represent about 90% of the total investments we have. Please expect this will continue. We have a limit of maximum 25% of our asset class that we could have in the balance sheet if there are compelling opportunities. Why so? Because we believe we can do better margins in consumer unsecured and we believe they are also more stable and less risky asset classes. Again, our history of 19 years of investing, investing in NPL shows that clearly. Most of the upside we have achieved over these past 19 years in debt purchasing has come from consumer unsecured and when you have big problems in our industry, usually they are about exposures in secured. So this is also our focus. Our focus and strategy also is to be concentrated on the large European markets where consumer finance industry is large and to have a very strong operational presence there rather than be disbursed for many more markets like some of our competitors are, but really having profitability, superior profitability in some others. So please expect us to continue to concentrate on operational excellence, especially in unsecured consumer debt, for which we are focused on our organization culture and LEAN, this method of continuous improvement and don't expect us to enter many more markets. We will still concentrate on getting bigger and even more profitable in all the 4 big markets where we are. And in the mid-term, we may enter 1 or maybe 2 more markets in Europe, looking at the biggest ones if we feel there is a good chance to succeed. Still, of course, we're more diversified if you look at Slide 5 of the table. At the bottom of the slide, you see that in some countries, we are also buying mortgage loans, so corporate and SME NPLs and also in some countries, we are doing the credit management servicing. And we have cash loans in Poland and Romania. If you look at the map of Europe on the Slide 5, you see we already are quite balanced. If you look at the organizations, though these are sizable organization capable of managing hundreds of thousands or millions of cases annually. There is also substantial balance sheet on every one of this for our main markets already. You also see a number during the bulks and 2022 was a year working all of those 4 big markets in Europe. We have one of the leading market shares in buying portfolios, consumer unsecured portfolio. You can see this market share varied from 25% in Poland or Italy to over 75% in Romania. So the goal is to continue on the path to become a leading European debt management company specialized in consumer unsecured but opportunistically, also doing business in other asset classes, especially that in some market portfolios are sold as mix of different types of this method, but we would like to excel and have great majority, the 75% of our assets in consumer unsecured as we have currently about 90% of these asset classes -- of this asset class. If you look at Slide #7, please take note, take a look at the pie chart there on the right top corner, recoveries from Poland constitute less than 50%. There is a growing share of Italian and Spanish recoveries. This trend will continue. If you look at the portfolio's investment structures, this record high PLN 2.3 billion worth of investments come quite evenly among those 4 big market with Poland representing only 20%. If you then jump to other elements of our results, record high net profit and relatively high ROE. This is a result of very good performance on recoveries on the debt portfolios we have built historically. Apparently, we can do it more effectively than some of our competitors and therefore, even though we have a lower leverage, which we can still have higher ROE. If you look at revenues, they were based, of course, on very strong recoveries and those recoveries significantly exceeded the conservative accounting ERC curves. They continued on the trend and therefore, we were obliged to recognize the upside and reflected in this revaluation. Again, this revaluation concerns most in the next few quarters, 70% of it concerns period until Q4 2023. So again, if the trends of recoveries do not change meaningfully negatively, please expect to see further upside for positive revaluation in 2023 and also in following few years at least. In terms of costs, you will see also a significant increase in operating expenses. This is driven by 2 factors. One is increasing scale of the business. Please note, in the past 2 years, we've invested PLN 4 billion in portfolios, which is roughly 40% of our total investment in portfolios over the last 19 years. So we significantly increased scale and of course, cost needs to follow. On the other hand, yes, we are under some inflation pressure to increase salaries or some other costs, which are going up because of inflation. But if you look at the efficiency of the business, if you look at how much people do we need to collect PLN 1 million, I think this is a nice level of efficiency, the number of FTEs with this big growth of scale of the business is only about 7% year-to-year. Our financial costs are, of course, also going up significantly. This is the result of, first, bigger scale of the business and as a result of higher debt level, but also a significant increase in the Polish interest rates and the Europe interest rates. We managed that increase to certain degree over 2022. We have made significant transactions, which swapped Polish debt into euro debt and at the same time, fixed the rate. And as a result, about 6% of our debt outstanding is today at fixed rate, which limits our exposure to further increases of interest rates. But the cost of funding went up and they will continue to go up as we continue to see the full impact of the increases of interest rates and also the increased level of debt that already happened in '22 -- for 2022 to finance this record high investments and I3 will -- the debt tower continue to increase in 2023. Why? Because we are -- we believe in a good situation where the supply of portfolios is relatively stable, but some of our competitors are more constrained to buy aggressively, because they have high leverage level and also the high interest rates in Europe mean less demand for NPLs or at least higher expected returns for NPLs, which is -- which places KRUK at a relatively better position as one of the least leveraged companies in the industry. So it maybe we're entering a period of bigger opportunities to deploy capital at higher expected returns than in the past years. This is maybe -- of course, it is not certain but look at 2022, the investment of PLN 2.3 billion at 2.2x return is also a sign of more favorable market conditions. On Slide 10, we are very well funded. Equity represents 42% of our funding. We are prepared to continue to grow. Of course, we need to add new debt to be able to realize further growth in investments level. On Slide 11, we give you some more detail into how we approach technology development. This is one of the areas of focus for 2023 and beyond. We got more talent and I think more visibility of what we wanted to achieve and that should result in further increasing our effectiveness, higher measure of possibly acceleration of some of the operation processes. And we plan to invest significant time and effort into becoming more effective, thanks to digitalization. If you look at Slide 13, our results by segment. Again, very good recoveries across all the lines in consumer unsecured, which promises stability and -- for the next at least couple of months. Again, I can tell you as of March, we don't see any negative effects of this slowdown of GDP growth that we are experiencing in the countries where we operate from those worries and possible threats have not materialized. Still of course, I don't know what will happen, but I have here no sign of change of the trend as of mid-March or 10th of March. If you look at the profitability, this is all great apart from Spain, but Spain is a case where we suffered in 2022 because of write down on corporate assets. This is over, meaning that right now, has been significant, the value of the assets outstanding is quite small, so I don't expect any more issues on that asset. And also at Q2 -- Q4, sorry, we decided to write down by PLN 7 million, the goodwill of the servicing company because it did not deliver on the planned EBITDA, that again is not a big problem, although of course it's a PLN 7 million of more cash loss, but the servicing business is proving to be very helpful for us to better understand what we're buying on the market. And when you maybe recall, our biggest investments in debt portfolio in 2022 was Spanish portfolio of BBVA Bank, a large portfolio, actually the largest portfolio we have ever bought, consumer unsecured. And we felt more comfortable buying it because our servicing business in Spain has been for many years servicer for BBVA and also part of the portfolio we bought. So whatever we lost in this write down, I think, was worth it, looking at the purchase we just made. And if you look at Spain, then we think the 2023 should be a much better year, because we increased the size of the business quite significantly. Look at the carrying value of debt purchase, it's already over PLN 1 billion, so we more than doubled the size of the business in Spain in 2022 and we did that at quite attractive expected IRRs on the purchases. You may also look at the split of investments and you can see here comparison for '21 and '22 this record high investments of PLN 2.3 billion come with very high investments in Italy and Spain and also significant increase in Romania, but drop in investment in Poland. This is not a problem, as this PLN 465 million still represents 25% of the market. You have seen in a second that market somewhat dropped in Poland, but secondly, in 2021, we had very high market share. It was over 50%. It seems that we see now that it was very difficult to sustain it as our competitors had high motivation of going back on that market and buying something. And in this 2022, because of interest rates increased in Poland, we increased our expectation for returns on that market and because of that likely, we resigned from some of the portfolios we lost to our competitors, because we didn't need to lower our expectations as other markets offered us very good investment opportunities at higher IRRs and that also show our flexibility and already the benefit of being diversified into 4 big European markets. Now let's take a look at each of the 4 big markets. You see on Slide 14, Polish market as I said it dropped somewhat year-to-year PLN 7 billion worth of nominal value of portfolio is PLN 1.6 billion, that shows that nothing really significant happened to the supply. Year-to-year, there is no growth. Actually, there is some drop. We don't expect -- we expect relatively stable market going forward. Also for 2023, we don't see that Polish banks have experienced any significant increase in default rate, which is a stable good situation. KRUK on that market made a leader, but our market share again is 25% for 2022. We hope this year will be better, but let's see the beginning of the year shows and I'm looking at Slide 15 now that competition stays quite strong but this is the beginning of the year only. You can see very good results on Slide 15, a long history of positive revaluation showing you that we continue on achieving significantly more than the accounting curve that is continued. And again, this PLN 465 million is not a bad result if you look -- if you take a look at the last couple of years. Of course, 2021 was a record high year and also quite good investment, but nothing spectacular changing happening here. Romania, growth in the market when you look at Slide 16, PLN 2.7 billion of nominal value and very successful year for investing -- for KRUK investment, 75% market share. We're very proud of that and once again we did that. If you look at Slide 17, you also see this continues to be our more -- most profitable business. 50% profitability here at the last line. Also, another very good quarter where we exceeded expectation -- expected recoveries in the accounting plan. As a result, we once more were able to reflect that positive revaluation. And the outlook is that this will continue in the following quarters. Italy, here and in Spain, we have maybe not full visibility of the market, but in the data we provide you here is something we sold, something we took part in. Our core focus, our hotspot here, our -- is consumer unsecured portfolios, not mixed portfolios and here we saw about PLN 50 billion nominal value of this portfolios, which according to our best knowledge may have been worst about PLN 2 billion. And out of that targeted market, KRUK had about 25%. I am not exactly sure, which position it gives us but it's definitely top 3, so it has been a very successful year for KRUK, which concentrates on this part of the market and we want to be market leader in that asset group. There is also a huge corporate portfolio mark as you see here at the bottom of Slide 18. We hardly touch it. We target some smaller deals and SME/corporate deals. We even show our market share and we maybe increasing our investment levels there, because the market is so big, the bucket should be a smaller part of our business in Italy. Still, we've been doing that. Actually, the results for the past 5 years on these corporate and SME assets have been very good. Quite different story than in Spain, where we suffered some losses. And this is the Italian results. Take a look at how good this business turned out to be in 2022, PLN 150 million of EBITDA, PLN 255 million of cash EBITDA portfolio profitability on the level already quite close to what you see on the Polish market. So we can say we did this. We did it. We are profitable in Italy. It's not 1 quarter. It's already a few years. Take a look at history of positive revaluation. This is again 7 or 8 quarter of positive revaluation, which shows you the stability of that business and the solid trend of exceeding our accounting KRUK recoveries and gradually increasing profitability. And we're not done yet. There is more potential. We can still continue to improve the process of looking at the results and the fact that we were able to double the investments year-to-year. I can say, it looks like we already are at a level, which is at least as effective -- well, at least as effective as the big -- as the most effective companies on the market historically. Because this 25% is already at least up 3 position. So it's been a great year for Italy and we're excited about 2023 and following years, because we know it would be quite difficult for us to see some significant deterioration of results. We are on a path to improve the results in the future. And the last of the big markets is Spain, a very big market if you look at nominal value of retail portfolio's effort over PLN 30 billion, but relatively low priced, so the investments level roughly was PLN 0.5 billion. KRUK has been very strong and thanks to this one big transactions finished, realized in December, but also a few smaller ones before. We have as much as 33% market share on the market. Again, I don't know exactly how it positions out, but I would expect at least #2, if not #1 position, understood that this share of retail unsecured portfolios, which is again our focus and this is how we define what we want to do with maybe some smaller deals in other asset classes. But as you know, we've had quite difficult experience with them, so we are not really excited about some bigger exposures, however, Spanish market offers more of the mixed portfolio, so we need to be on the market too. But I think we will be much wiser in the future than historically. Again, this is a very important year for Spain. In 2022, we very significantly increased size of the business. The value of our balance sheet in Spain increased to over PLN 1 billion, which means we already crossed the point of decent profitability. The size of this business is already big enough. We have good profitability and if only we deliver on the expected recoveries from the investments we've made, in 2022, you should see a stable profitable business in the future. Of course, it's too early to say whether we will make 100% more or less of this plan, but I can only tell you in the March, the beginning of March, things are good. We have stable results, as expected results in Spain, so I expect 2023 results, you will see decent profitability, significant increase and improvement over still difficult 2022. And it seems that there is quite a few market opportunities to buy portfolios in Spain this year. Other business, other countries and Czech, Slovakia and Germany performed very well. You can see here a very nice profitability of 37%. Small positive revaluation. There is some expenditures on new portfolios of about PLN 50 million, so we ticked all the boxes. We are quite happy with the performance, but the scale of that business, of course, is limited. Other business lines, which is cash loans and Credit Information Bureau. You see on Slide 23, wonga had a very good year. They more than doubled or exactly doubled the EBITDA year-to-year, so we're quite happy that however since legislation change in December 2022, wonga needs to come to the market with new products, which will replace gradually the older, less profitable products under the new law and this is a major development, major IT and operational change and, of course, there is some uncertainty as to how successful wonga will be with sales of this new product. So the very good 2022 results are not a promise of further success. We still need to change the business to adopt to this new regulation. 2022 -- 2023 is still a year where we entered with high profitability and balance sheet, so the results of this year should be okay. The question is what about 2024 and 2025. We will realize our business plan, which calls for further growth, profitable growth of the business with the new products. But please remember this, uncertainty remains because of the legislation change that took place in December. Novum had a very good year. You can see here PLN 9 million of EBITDA. ERIF had a difficult year, but it no longer is part of the group, sometime in 2022, we decided that strategically, it was too small for us to continue to be the owner and we could leverage on this -- the synergy, a corporation of ERIF not being its owner. And in beginning of this year, we concluded the sale of ERIF to CRIF Group, an international player in the Credit Information Bureau, successful transactions that should contribute some profit for Q1. A few more comments to financial results. I draw your attention to deferred taxation. It is an important position in our P&L, which is from -- to significant variation depending on how much we plan and realize transfers from our investment companies to KRUK, let's say on which there is a taxation in Poland. There is additional description and sensitivity analysis, which we included in our financial statements, so please take a look at this. In 2022, the effective tax rate was as you here about 7% as a result of big investments, which meant a somewhat lower transfers and as a result, the lower effective taxation rate. One more element I want to comment in our results is the FX. The part of the profits in 2022 was thanks to Polish zloty depreciation. On the other hand, you of course had an effect of interest rate increases on the financial cost, which we partly mitigated by those contracts of swapping Polish debt to euro, which offered us not only greater ability versus the FX, because at beginning of 2022, our net exposure, P&L to euro was about PLN 2 billion. We had net assets of EUR2 billion, more than liabilities, we reduced that to about EUR1 billion at the end of the year. So our results are less prone to change if the interest -- if the foreign exchange changes. And by doing that, so we also swapped the Polish interest rates for euro interest rates, which we effects --which also lowered our financial costs and also increased profits for 2022 and will increase profits for 2023. It lowered our blended average cost of debt. If you look at Slide 29, you see the new ERC curve, which calls for PLN 13.8 billion. You see increase of that curve, but you see also in the next 15 years, this curve is steeply going down. This is a conservative plan. Look at Slide 30. The vintage recoveries for the past several years. You see here that these curves do not go down as fast, have not going down as fast historically. This may be due to conclude that if these trends continue, we will continue to exceed on the ERC curve that you see represented on Slide 29. If you look at Slide 31, please take a look at how profitable that business has been. We already have 19 years of debt purchase experience, so you can look for those vintages and see that we significantly exceed this roughly 2x money expectations that we have when buying portfolios. And it's not just the portfolios we bought 15 years ago, it's also the portfolios we bought a few years ago that likely will contribute significantly more than 2x money in time. Already on the portfolios bought in 2015, you see that this is exceeding 2x money and look at the trend, the trend is quite flat compared to the purchase price. For example, if you look at the 2015 vintage, you can see that for the past 2 years, we continue to recover roughly on a flat curve. Sometimes, it's even increasing if you look at the vintage of, for example, 2016, where from 24%, we went up to 27%. That shows resilience of the business, that shows improving --operating improvements we have implemented, that shows the effect of greater amount of cases being sent successfully to process, implementation of hybrid process, but also the fact that we find out then we collect more because the nominal value of these debt that we had bought several years ago have grew and we are able to benefit from that. In terms of debt funding, now I'm looking at Slide 33. You can see that at the end of the year, we only had about PLN 400 million of value available under our RCF, that means that we will need more funding going forward. In this year, we are quite active in placing bonds on the Polish market this year, but it's maybe that Polish market will be too small for us and we will tap European or Nordic bond markets. We want to be ready for that and when time is right, we may decide to tap this new stream of debt funding. But the decision has not been made yet. Overall, this is the situation or maybe last but not least, you have some slides, those are slide 35, 36, where we in more detail tell you about our ESG strategy, specific target that we adopted in 2022 for the next few years and on what we have been doing in terms of sustainable growth. So for those of you, which feel this is important, please see that we are more active and we will put effort into becoming even more balanced, sustainable company, even though that when we looked at ourselves, it seems we already have done quite a lot in terms of sustainable growth. Thank you for listening and I'll be very happy to take your questions.

[Operator Instructions] Our first question comes from Robert Bonte from Millenium.

Just wanted to understand again, I think your -- the collection, so you have purchased quite a lot last year, especially in second half of the year and so your collections curved, the expected collection in that slide, is it Slide 29, is quite a large numbers, so expected collection is now at PLN 13.8 billion, up 38% year-on-year. I think all the vintages have grown very strongly. This is the expected collection, just to understand it, this is the expected collections, the expected cash collections? Or -- and remind us, you always usually collect more?

Yes. So Robert, the situation is as follows. This is cash measure, so that means we expect PLN 13.8 billion from this portfolio we collected -- we purchased in our entire history. And you may see this ERC as the older portfolios. Older for me is more than 2 years older on which we say we have a long history of beating our targets. Look at the vintages that we show in -- on Slide 30, from those older Investments and please see that possibly quite like we will continue to recover more than has been assumed and quarterly adjusted in this ERC. But this is a comment, which is true for the older portfolios with already a few years and more of history. Now for the newly bought portfolios, newly bought meaning everything we bought in 2022, majority of we bought in 2021, the plan here is our plan, because this is a plan from the moment we made that investment. So we are not sure how much of the upside or if there is any upside in these portfolios. We will need to see in some time, hopefully, there also will be some upside, but it's not something we know currently. What we know is that on the older portfolios, we have historically achieved much more and we have reasons to believe there will be even more in the future. And we are slowly gradually with some delay reflecting that in our ERC for those older portfolios. So in practice, it means that we expect, in the next couple of years, to beat these numbers you see here on Slide #29, showing this PLN 2.18 billion, PLN 1.89 billion, PLN 1.75 billion by something. But also please take a look that when we do revaluation, we mostly do revaluation, we increase the current level for the next few quarters. So in -- so this upside, which we're referring to is more towards the middle and the tail part of this curve, not for the next, let's say, 2, 3, 4 quarters. I hope, we can still beat these numbers here, but this potential to beat these numbers is in percent much lower than it is in your number 5%, 6%, 7%, 8%, 10%, and later. There the significant potential can be much bigger, which also shows you the logic we have from this conservative is that we are much more certain about what will happen in the next 4 quarters. But we really don't know what will happen in 10 years, not to mention 15 years. So hopefully, there will be much bigger numbers, but it's so distant in time that we don't want to be too fast in recognizing these. Again, it is only…

And I guess, so the total. Yes, so the total here in that chart is PLN 13.8 billion essentially 5 years of what you collected last year already basically we're sure of and there is upside from that going on your historical record. 2 questions again. Are you -- now that your collection model has shifted more and more to the legal process, does that now mean that your outstanding receivable have a much lower discount rate than the previous unsecured ones without the legal process? Well, legal process was a much smaller part of your collection process.

Yes. Well, probably a little bit yes, but then what happened in the market is that the -- if you take our oldest market, Poland and that competition has increased, price level have increased, but our curves were supplemented, they were not -- they became flatter, but they became overall much thicker. So a similar portfolio, which we would price in Poland, say, 10 years ago would, yes, would have much shorter curve. This curve would be more tilted toward the beginning years, but it would also call for significantly less collection overall. So what happened is that we increased the collection. We never decreased collection in any table. We increased the legal collection and therefore, the curve became more flat, but on the other hand, we pay for these portfolios today significantly more as a percentage of nominal value than before, because competition increased. And therefore, also discount rate is somewhat lower, still look at 2022 tools, the discount rate on everything we bought in 2022 was 20%, that's not IRR after a close, that's below cost that -- just cash invested and divided by cash expected and that translate to about 2.2x expected gross return on the investments. So I would say that's still decent.

Yes, yes. And I guess -- so I guess, yes, the strong cash flows again are quite interesting to investors and again, can you give us a bit of help, any chance that you can return some of the cash to shareholders with dividends or dividend policy? Again, you're generating quite a lot.

Yes, yes.

Yes. The interest rates have gone up. Your balance sheet is very strong. If I compare your balance sheet today, the debt -to -equity today versus last year or 2 years ago you are in a much better shape. So in theory, there should be room from more dividends.

Yes, yes. So please expect we will abide with the dividend policy that we have published last year, which calls for at least 30% of dividend payout. Please don't expect a significantly higher dividend than this 13% -- 30%, I'm sorry 30%. The decision has not been made by the Board. Board has not yet recommended, so it's still pending, but the reason for me saying that is that we are in situation where we have had record investments in debt purchase in 2022. 2023 looks quite promising. It may be that we are again able to put to work PLN 2 billion of investments or more and the debt funding continues to be quite challenging. I mean by that the cost of funding is higher, but also the availability of the funding on the Polish market is more limited than it used to be historically. So debt is some uncertainty, which tells us, first, we can reinvest this money at quite a good return going forward, maybe those returns will -- maybe even be better than historically. And second, we don't know how easy and at what cost we will be able to source debt funding for that market. For that reason, I don't say we will recommend a very high payout of dividend, above the minimum that is -- that our dividend policy is calling, stating.

[Operator Instructions] This concludes our Q&A. I'll now hand back to Michal Zasepa for any closing remarks.

Well, thank you very much for your interest in KRUK. I hope to meet some of you on the road. I'll be in London on PKO BP Conference next week on Tuesday and Wednesday. As I said, the year started very well. Recoveries for the first months of 2023 are good after the quarter and we will also tell you about the exact numbers and also Investments. So this should be a good year, I believe for KRUK. We want to grow profits this year. We see still significant potential to increase effectiveness and also scale up the investment in the next couple of years on the markets where we are and possibly within the next couple of years we will also add one -- at least one more market in Europe. So we're excited about the opportunity we see today that we are one of the most profitable and best funded businesses in industry and we want to slowly, gradually continue on that path to become even better even more profitable. Thank you for your time again.

Ladies and gentlemen, today's call has now concluded. We'd like to thank you for your participation. You may now disconnect your lines.