Nampak Limited (NPK) Earnings Call Transcript & Summary

Good day, ladies and gentlemen, and welcome to the Nampak pre-closed period call. [Operator Instructions] Please also note that this event is being recorded. I would now like to turn the conference over to the CEO, Mr. Erik Smuts. Please go ahead, sir.

Thank you very much. Good afternoon, ladies and gentlemen. Again, welcome to Nampak's voluntary trading update for the 11 months due 31st of August 2022. Just a reminder, again, the main focus of this update is not to focus on Nampak's financial results or any specific numbers but rather the underlying trading conditions in the market and of course, an update on key funding methods. To start, I can confirm that trading conditions in our key markets remain healthy, and I can break it down as follows. First of all, revenue growth was supported by good volume growth in our beverage can divisions, higher selling prices related to the higher cost of commodities passed on the selling prices. And then secondly, the positive impact of this growth unfortunately, on operating profit level was negatively impacted by higher ForEx losses from Nigeria and the hyperinflation treatment of earnings from Zimbabwe. This, of course, includes converting the entire period's results in Zimbabwe at the closing spot rate keeping in mind that at our last year-end, the auction rate for the Zimbabwean dollar was around 87. While at our half year results, it was based on a rate of roughly about 142. But this has since deteriorated to a more recent rate that is weaker than 650 to the U.S. dollars as we stand today. Third, results were also impacted by higher interest rates and working capital requirements that resulted from the higher commodity prices, and that, of course, will result in higher cost of funding. When we look at the market conditions for our various substrates, first of all, for our Metals for the most part, operate sort of, for the most part, overall trading conditions in our Metals businesses were pleasing, especially in our Bevcan operations. I think despite the higher cost of aluminum beverage can demand exceeded the expectations in South Africa, resulting in very high utilization of all our can lines that produce larger format cans. In Nigeria, we continue to operate at very close to full capacity. But as mentioned, profitability was negatively impacted by ForEx losses incurred in the extraction of funds from that country. Bevcan Angola continued its journey towards recovery with very strong recovery during the last couple of months. And I must say that it was very pleasing to see that sudden jump in volumes. The extraction of funds from Angola was also very pleasing while the strengthening of the Kwanza resulted in a ForEx gain in Angola that, of course, will be used to partly offset some of those losses from Nigeria. Unfortunately, the results from our DivFood business were disappointing. We experienced very strong demand for fish cans, but this was negated by weakening demand for diversified cans and some metal closures. We also experienced raw material shortages during the first half of the year, as previously reported as well as some operational challenges in the recommissioning of some of the equipment that we have moved from Gauteng down to the Western Cape, and this as a result resulted in reduced profitability. The situation has improved more recently, but it's still requiring a lot of focus from our operational teams, and I can assure you that, that is exactly where we're focusing on. Our Plastics businesses experienced mixed results. We had very good operational results in Zimbabwe, but strike actions at major customers contributed to weaker demand in South Africa. Our paper business also performed in line with expectation with again very strong performances from our Zimbabwean operations. But as previously mentioned, the impact of translating the results from all of Zimbabwean businesses at much weaker closing rate had a very negative impact on the overall financial results from these businesses. I'm very pleased to report that capital expenditure remained well controlled and well within the previous guidance. And hopefully, we can surprise you there on the upside. Operational cash generation remained strong but was impacted by an outflow of cash to fund elevated working capital levels and an increase in interest costs. During the last quarter, we have seen commodity prices starting to ease in dollar terms, but this positive impact has been muted by the weakening of the -- more recent weakening of the ZAR against the USD. It is, therefore, likely that the full benefits of the lower commodities will only flow through during the next financial year. We are currently in the process of doing our normal annual impairment testing, and it is likely that the global trend of higher in-country risk premiums and interest rates will impact valuations. Further, we can confirm that the group complies with our funding covenants for all measurement period to date. And as previously mentioned, we're in the process of addressing the group's capital and funding structure and are committed to the following: first of all, to reduce the complexity of the lending consortium, secondly, to simplify the funding structure; and then thirdly, to refinance the maturing debt. Sources of funding that are actively being considered in optimizing our funding structure includes the proceeds from asset disposals and or a capital raise. As part of this process, Nampak and our lenders have agreed to the following: first of all, extension of the maturity date for the group's revolving credits and term facilities from 1st of April 2023 and 25th of September 2023 to 31st of December 2023. I have to mention that the extension of these dates was required to ensure that Nampak remains a growing concern until such time as the refinancing as of the debt has been concluded. Secondly, we agreed to -- the funders agreed to keep the group's current net debt to EBITDA covenant at 3.5x until it is lowered back to 3x for the quarterly measurement period ending 31st of March 2023. Then thirdly, a reduction of the EBITDA to interest cover from the current 4x to 3x. So that is relaxing it from 4x to 3x from the 30th of September 2022 until 31st of December 2023. And then lastly, there's a requirement for the repayment of net interest-bearing debt of at least ZAR 1.35 billion by no later than 31st of March 2023. So to summarize, I think in general, you can say our trading results are still strong, but net cash flows and our earnings will be impacted by the higher commodity prices, ForEx losses from Nigeria and potential impairments due to higher in-country risk premiums and interest rates. So I think that concludes the updates, and we will now open the floor for questions from the audience.

[Operator Instructions] Our first question is from James Twyman of Prescient.

Can I just ask 2 questions? The first one is regarding the timing of the refinancing of the debt. I think the last time you reported, you mentioned that it would be -- it would occur by the end of September. So what is your updated timing on? Do you expect the refinancing to have happened by the end of December or just some idea of timing would be useful on that. That was my first question.

Thank you, James. So you're right. During the previous update, we did say that we're targeting to finalize this by the end of September. We have not been able to do that yet. We've made good progress. But at this stage, like we said in this update, we are targeting to complete that at least by the 31st of March next year.

Okay. And the second one was in terms of working capital, there was obviously a big increase in working capital at half year. Has that reduced to an extent? Or has it remained at that really high level?

Remember, James, we don't have the year-end numbers yet. So we can obviously see what is busy happening. But quite a seasonal business. So even if we could give you the numbers up to the end of August, I don't think that would be a true reflection. What I can say is that commodity prices do still remain high and in ZAR terms. Although we've seen some of these prices starting to come down in USD terms, with fairly long lead times and shipping sort of lead times, et cetera, we have not seen the ZAR price of these commodities come down yet. So therefore, we only expect to see the benefit from, let's call it, these reduced ZAR cost of commodities to come through during the next year. So in the current period, we haven't seen that benefit yet.

In terms of the debt extension by 9 months, which is obviously very welcome. Is that at the same interest rates as before? Or is there a penalty for that extension?

At the same interest rates, yes. There's always -- let me just clarify that there's always when we -- when there's -- you sign new agreements, there might be a small core cost to that, but the debt is still at the same interest rate.

The next question is from Cobus Cilliers of All Weather Capital.

Just a very quick question or 2 questions from me. The first one is, can you just give us a little bit of a better understanding of the competitive landscape in South Africa, given the other substrates? For example, glass and maybe also how your competitors are doing on aspect of the Bevcan industry in South Africa, South Africa specifically, if you could, please? And then secondly, can you just give us an idea of any potential export contracts in some of your other jurisdictions?

Let me maybe just clarify that we would not like to comment in this call on our competitors at all. I mean that's we unfortunately can't do. I think what we can do though is talk about other substrates. It is well known that more recently, there's been quite a shortage of glass in the market. And that, of course, as previously reported, had quite a decent impact on beverage can volumes. That is still the case. As far as I know, the commissioning of additional glass capacity should be there shortly. So I think that shortage will probably start to disappear over the next couple of months. But as we said in the update that the overall demand for beverage cans which cannot all be contributed or attributed necessarily to the shortage of glass exceeded our expectations. And the source of some of the demand is completely unrelated from the alcoholic sector where the shortage of glass occurred. So it's -- we do believe that even beyond the glass shortage disappearing, the demand for cans should still be strong. I hope that answers the question.

Sorry, on just the second question on potential export contracts. Are you seeing any demands?

So the -- in the rest of the world, that debt shortage that resulted in the requirement for export cans from South Africa, that's not there anymore. A lot of that capacity that was installed is now in place and producing. And at the same time, I think the demand also came off a little bit in some of these markets. So there's no requirement for exports of cans into the territories. And quite frankly, we do not have the capacity to do so right now. As we said in the update, all our export contracts that we sort of lost, those once-off export contracts that the strength of the growth in the local demand actually exceeded the loss of volume. So even if we had export opportunities right now, we don't have the capacity. We're running close to full capacity. So the only place where we do export at the moment, as we reported previously, is that we did conclude a contract to export some cans, and that is still going ahead and we're doing well with that contract.

[Operator Instructions] The next question is from Paul Whitburn of Rozendal.

I just want to find out why is the capital raise or potential restructuring of the business has taken so long? I mean, what exactly are you waiting for? I mean, I know you've been trying to sell some assets, which seem difficult to sell in this environment. And then it gets -- I get the feeling that you're waiting for maybe working capital to roll over. So that kind of buys you some time. But I mean, I just want to get an understanding of the exact markets that you and the bankers are looking at in terms of that balance sheet restructuring?

Okay. It's -- maybe I'm going to repeat a little bit of some of the things we said before. So we always said that the order of preference for reducing our debt first of all, we would like to do it from normal operational cash flows, which in the more recent times has been impacted by the commodity prices. But of course, there is the expectation that, that cycle will reverse. And at some stage, we'll start seeing an inflow again. So there's a bit of trying to -- I don't want to use the term maybe, but kicking the can down the road in that sense could be worth waiting for. So that's the first thing. Except that maybe it didn't happen as quick as we were hoping for. But that certainly operational cash flow has always been the first priority. Secondly, we said we will look at the utilizing our trade facility that we had for essentially discounting some of the debtors and that we have made use of. And so that, unfortunately, some of that or most of that cash we hitched through that system was as we reported in the previous update taken up by -- through the investment in working capital or inventory levels. Then the third one, we always said is before we come to the market for a raise offer -- a capital raise through that mechanism, we would also like to see whether we can use proceeds from the sale of assets. So that is something that we are all actively pursuing. Needless to say that -- we have been doing that for the last number of years pursuing different opportunities, and we'll keep on doing that. And then, of course, the last one is if we can't raise adequate cash through all those different means, then the last option available, of course, is to just do a normal capital raise.

I mean, do you potentially -- I can understand sort of trying to buy some time if you assume that working capital does come back. But what happens if that kind of dovetails with a large decline in the overall market? If we have a sort of slowdown locally or globally and then you're kind of stuck in the same position. And I mean if you are running at full capacity, I mean, is it worth pushing price. I mean, isn't that the easiest way to get cash through the door without investing in working capital.

No, listen, pushing price is not that simple. So first of all, in more recent times, of course, we did push price a lot as a result of the increased cost of commodities. So we were forced to view that simply to recover costs. But for most of our businesses, we operate and the contracts that's got very specific pricing mechanism. So you can't just go and increase your margins. I mean that ability we don't have, and we will certainly lose a lot of volume if we just do that without the justification of actual cost increases behind that. So that's not an option. So yes, you've got to make sure that the winds are blowing in the right direction and sometimes they don't. So there is certainly amount of luck that you can hope for, but we're certainly not going to hang our hats on hoping for everything to swing in our favor. To date, in fact, as you obviously have seen the commodity price cycle certainly has gone against us. So yes, we try to delay as much as possible and -- but there would be a time when you simply don't have the ability to I as could have kicked the can further down the road. As you've seen in this update, the lenders that put another specific milestone dates in place. And that is the 31st of March next year for the repayment of ZAR 1.35 billion.

So last question from my side. I mean, you're also quite hamstrung if something and if an opportunity does present itself like Tiger coming back into your canning and helping you out there in that division. I mean that would require working capital once again where you are hamstrung. I mean, once again, does that restructuring happen pre something like that, if that contract had to come up again? Or how do you deal with that?

So overall -- and Glenn, maybe if I can ask you to comment as well. Our banking facilities, I think we will structure such to take into account those opportunities that might arise. But at the same time, that the lenders need to have assurance that we have the ability to service the debt and we will stay within our covenants. So therefore, I think we need to make sure that not just from a funding point of view from the lenders, but also our capital structure is supporting the business and the requirements of the underlying business.

One of the key things was to try and release the working capital to continue to address the structural imbalance in the working capital cycle. At the moment, there's probably a bigger earnings Nampak to fund possibly disproportionately that cycle, and we are working upstream and downstream, so both with our suppliers and our customers to address that. So If commodity prices came back quite sharply and that we can get -- the cycle can be addressed with certainly the least working capital investment system.

And can I add that we are making good progress in those discussions, and we've had some good successes as well. So it's a process. And we -- it's like I say, we're not just hanging our hat on a hope.

Yes. I mean you've seen at the others where there were funding labels for breweries losing tens of millions and then basically closed down that business and have ZAR 100 million of working capital come back into the business. I mean that sounds like the story that you're stuck in at the group here.

Is that a question or a statement?

Statement. Thank you very much.

The next question is from Rowan Goeller of Chronux.

Quick question, similar probably to the last one. Do the current strong demands you're seeing in South African options that you do have its speeds at least. What is your thinking on you actually would be able to benefit from current demand assuming it's sustaining demand? And how much of a limitation is the pending structure to that?

Rowan, I think through our normal capital budget for every year, we intend to fund those priority businesses that are more profitable and is giving us the required returns. The Bevcan operations clearly fits into that category. As we mentioned in the current capital cycle, I think we managed to keep the capital very well under control. And therefore, I think we've created some capacity to fund the upgrade of Springs line 2 that we talked about before. So I think it's a combination. I think through our normal CapEx cycle, we should be able to cover most of that. But one needs to think longer term and clearly, the requirement to expand capacity further -- somewhere in the short to medium term is certainly there. And unless we have a capital structure that can support that, we might be hamstrung and that will play into the hands of our competitors. And that's certainly something that we are taking into account in determining the optimal capital structure.

Could you please relate to the [indiscernible] refinance is actually put in place?

Well, let me maybe -- I mean, the refinance, as we discussed, we want to do before March next year or before the end of March next year. Putting in additional capacity is a 2-year project. I mean you place the orders, you have to place, you pay certain deposits and so on. We simply do have the facilities to do so right now. But some of the -- or most of the cash will only flow well into the next financial year and even the year thereafter, but that's definitely something like we said before, that we are targeting.

Okay. And the lender is restricted in making any moves on that capacity expansion.

Listen, the lenders are very responsible in how they look at our funding requirements, and we had a very good conversation with them. They, of course, have very strict guidelines in which we have to operate. But I'm going to ask Glenn maybe to talk to that?

Rowan, I think the clear thing with these types of expansions, certainly, the beverage can business in South Africa is a tried and tested business efficiently run and with a good management team. So allocating funding towards that business is probably makes a lot of sense. What we have to do is fund that deposit that would be required for line 2, and we certainly do that with internally generated cash. And as Erik said, the second part of that payment would struggle up until the FY '24 and that could be the majority, at which stage refinancing would have been get it done. And hopefully, the commodity prices have stabilized, and internally generated cash refunded reasonably easy. Larger step-out projects, we don't have the capital base to attempt.

Our next question is from [indiscernible] of [indiscernible].

Erik, it's Donnie from [indiscernible]. I guess just trying to assess sort of the areas of reliance to avoid a capital raise. And I guess -- I mean, while you can see that the field of the covenants has been certainly relaxed. I mean you -- your required repayment in March has gone up from ZAR 1 billion to ZAR 1.4 billion, it seems. And if I remember correctly, you had already repaid ZAR 400 million of that. So I mean, previously, you had to repay ZAR 600 million now you have to repay extra ZAR 1 billion. But sorry, just to get to the question, I mean, I remind you on a working capital release from Nigeria. And I guess just to get the sense of the exposure you have in terms of locked up working capital there. And then what's the difference in the reporting rate and the actual rate of repatriation that you're currently achieving for Nigeria?

Listen, you've got a bit of a mixed question. And some of the stuff I cannot answer right now given that this is not a results update. But I think, first of all, I got to remember all your questions. The first thing is in Nigeria, the official rates and the Federal rates at which we buy can be very different. It can be more than 50% or more in difference. So that is very significant. Keeping in mind that we do also use the cost at which we incur for the raw materials is based on the rates at which we're buying the ForEx. So the ForEx losses that you incurred partly as a result of this -- this premium that you're paying on the official rates, but most of that is passed on to the customers and recovered through that mechanism. But of course, then repatriating any of your other cash, et cetera, is quite problematic and comes at a significant fund cost. Sorry, just remind me your other question.

No, I mean it was mostly around the exposure to the working capital lockup in Nigeria at the moment. And not relying to you would be on a working capital and not there to help in avoiding capital raise.

Yes. So that's quite a dynamic cycle. So we've got strong demand in Nigeria, but it's been fairly stable more recently. So the release of working capital out of Nigeria is also very much dependent on risk of global supply chains and so on. I think some of that is stabilizing as a result beyond the commodity prices itself, we will assess the required level of inventory in country, and that's something that will have some impact -- positive impact, I think, going forward. Then the other part of your question, Glenn, if I can maybe ask you to respond to that.

So just in terms of the other part you're talking about repatriation. The repatriation, we've tried to manage very carefully. There's been deals with potentially parallel rate we converged slightly with the spot rate. So we would probably expect a stronger second half transfer from Nigeria than the first half. But it comes with certain foreign exchange costs to get the funds back and we'll update the market when we report in December.

Then the next question is from Mila Mafanya of Afena Capital.

Just 3 questions on my side. Could you -- I know you've alluded to it a little bit earlier. Can you just talk to how the repayment requirement has actually gone up by ZAR 350 million? And then just related to that, how much has actually been repaid thus far to the end of August? I know you've given us those numbers before and I'll just start with that one.

Okay. So maybe let me just clarify because, in fact, I think Donnie asked a question very similar to that. Technically, the ZAR 1 billion we had before and this ZAR 1.35 billion is not the same thing. It's unrelated. So the requirements for the ZAR 1 billion originally was meant to be paid earlier and then it was aligned to the maturity date of all the debt. And in theory, therefore also pushed to the end of December. And as I said, the pushing after the dates to the end of December is more a technical issue to ensure that Nampak remains a going concern beyond -- in other words, when we announce our current year results that the audit is consigned off on a going concern basis. Of course, that is supported by a refinancing before the 31st of March next year. So now part of the requirement to give out this relaxation is, therefore, this ZAR 1.35 billion. So in a way, it's completely new. I do understand that you can say, well, hang on, does it relate to the ZAR 1 billion. And in a way, you can say yes, because what the lenders are still paying us guys we think your debt is too high and therefore, to allow a refinancing, we think that this is the minimum that you need to reduce your debt by. And therefore, all of the previous usage of trade finance and all the rest of it, I think in a way, you can ignore. This is not related. So you can't say it's like ZAR 1 billion less the amount that we've repaid already, et cetera. I think this stands on its own. But I mean, there is a link there in the sense that the lenders feel in order to do a successful refinance, they believe this is what's required.

If I can just make a point around the commentaries made around going concern, because the maturity date of the debt about the April and September 2023 repayments forward in the 12 months of our reporting date at the end of September 2022. All those liabilities essentially get classified as short-term liabilities at the reporting debt we report in September. And because of that move from previously posted long-term debt into short term, it obviously has quite a punitive impact on our short-term liquidity ratios, particularly the current and asset test ratios and hence, will be a question around a going concern, unless the maturity date of that debt was moved beyond the date of our next report and hence, the movement of that debt to the 31st of December 2023, which then allows the group to address its capital structure and its finance structure before that 31st of March debt.

Just a second question was just I know as part of the discussions with the funders, there was talks of different treatment of those cash flows in natural covenant costs. Have you come to a conclusion in that regard?

No, those cash flows -- the cash on the balance sheet does not get included in the covenant calculations for the measurement periods going forward, as we've indicated in the -- in this announcement, the EBITDA is included.

So for the current financial agreements, those covenant calculations will not change and definitions. But the likely outcome of future agreements will be that certain cash might be excluded or accounted at a different level of, what do you call it, of cover ratio. But because of that also, your covenant itself will also be amended to take account of that. So in the current agreement, no, it's not -- it is still included the Zimbabwe operations. But in all likelihood, in future funding agreements, it is likely that might be excluded in its entirety.

Just last question, just in terms of -- I know you say you are also actively seeking asset disposals I mean, has there been any sort of significant progress from a milestone perspective in terms of some of those discussions?

I don't think that's something I can comment on specifically other than to say that we are actively looking at those options. I mean I've said it before. I don't want to -- don't read anything into that. We're not giving guidance on that to try and tell you what's busy happening in the background. I think it's more saying you can believe that we are looking at all the available options.

The next question is from Nick Wilson of News 24.

Sorry, can you hear me?

Yes, we can.

Erik, it's Nick Wilson. I hope you're well. I just wanted to ask, please give me if it sounds quite simplistic, I'm just trying to understand it and to make sure I understand this correctly. My understanding is at the end of March, your total debt was ZAR 5 billion, right? Now of this debt, ZAR 1.35 billion has to be repaid by the end of March next year in order for more lenders to agree to refinance other portions of your debt and to give you a bit more breathing there. First of all, do I understand that correctly? And then secondly, I wanted to also ask you relating to this raise issue, is it a case of the last resort? Is that how you're doing it? Or what is the likelihood of it actually happening? I mean how confident are you that you will be able to basically avoid it via asset disposals and obviously, I suppose, improving cash flows?

First of all, I think that maybe just -- the ZAR 5 billion is not an accurate number, but it's sort of in the ballpark for our net debt at the end of our last -- previous financial period. Of course, there has been a further investment in working capital. So I can't comment on the exact number other than saying that the gross debt is much more than that. So our net debt, it takes into account cash that we have available in various countries, et cetera. On the -- the raise issue being the last resort. That is in line with what we said in terms of the order of priorities. So it's only once we've exhausted the other options will we consider the raise issue as the solution. Then in terms of the likelihood that we might do a capital raise that we definitely won't comment on at all. I think that would be speculation and quite frankly irresponsible to do.

And Erik, sorry, just for clarity. So for my purposes, as a journalist, if I to say what your debt levels were, what would be the most accurate figure then to use for me, I could say what should I use?

Yes. So I can only go back to our last set of reported results. And Glenn will quickly look it up for us here, but I can't remember it off the top of my head. I recall at the last year end, I think it was something like the net debt was about ZAR 4.6 billion, ZAR 4.7 billion.

So Erik, that's correct, ZAR 4.7 billion.

ZAR 4.7 billion, it was at our last year-end.

Was there -- yes, the last year end, okay, ZAR 4.7 billion.

I can just confirm that for you afterwards. I mean, it's public and available information. Very happy to give you that number.

And the next question is from Mark Narramore of Excelsia Capital.

Just around Angola, you mentioned there was a strong recovery in the fourth quarter. Can you maybe give some more kind of -- can you elaborate on that number? Can you kind of give us an annualized run rate for what that's looking like? And with the profitability trend, I mean, historically, this has been kind of your biggest profitability contributor. Where are you in that cycle? Do you kind of see a strong recovery carrying on? Just if you could just elaborate on that run rate as well.

Mark, I would love to give you numbers now, but that would be selective disclosure, given that we have not included it in the update. I think I have to stick to the description of a strong debt recovery in the last couple of months, and it's been strong. That's big letters.

Yes. So with big letters, maybe a big letters coming out of cash flow as well. I mean is that looking...

Angola has been very good all along in terms of cash extraction, the availability of dollars. So we've not had any problems other than the normal sort of processes that you need to go through to get the cash out. So saying Angola has been -- has not been a problem at all in terms of cash extraction. And it's been, again, like I said, the overall profitability in Angola has been ahead of expectation.

The next question is a follow-up from James Twyman of Prescient.

Yes. Thank you. So it looks like the new news that's come out today is that there is an extra ZAR 1.35 billion that you need to raise from disposals which is higher than before, especially given you had done some disposals before. But the businesses that you are looking at to dispose of, if everything went right and you did sell those businesses, would that reach that level? In other words, are there assets that you're considering selling that could reach that number?

James, I can't comment on that. I mean do we have assets that we potentially could sell to get you that number and the answer is yes. The question is do we have buyers for those assets? That is in the bond stage of negotiations to get us there and that answer I cannot comment on.

Yes. Okay. Yes. So there are -- that you are considering selling assets that would be worth that what you are -- there is a case where you could achieve that goal, it is achievable?

As we said before, that is one of the options we're looking at.

Thank you very much. Gentlemen, we have no further questions in the queue. Would you like to make some closing comments.

Yes. I think -- overall, maybe just back to one of the questions before for net debt. At the 31st of March this year, the debt was -- the net debt was ZAR 4.6 billion. Other than that, no further comments from our side. I would just like to thank everybody for making the time to attend the call. And I would like to wish you all the best for the upcoming weekend and a good day. Thank you very much.

Thank you very much, sir. Ladies and gentlemen, that then concludes today's conference, and you may disconnect.