OPmobility SE (OPM) Earnings Call Transcript & Summary

Hello, and welcome to the 2024 first quarter revenue for OPmobility call. My name is Laura, and I will be your coordinator for today's event. Please note, this call is being recorded. [Operator Instructions] Today, we have Laurent Favre, Chief Executive Officer, and Stéphanie Laval, VP Investor Relations as our presenters. I will now hand you over to your host, Laurent Favre, to begin today's conference. Thank you.

Good morning, everybody, and thank you for joining the call regarding the Q1 revenue 2024 of OPmobility. Hopefully, you got the press release and you have in front of you also the presentation and the few slides which we are going to comment with Stéphanie in the coming minutes before handing over to you for the Q&A session. First of all, we start with the executive summary that is the Slide 2, and the main achievement of Q1 2024. We are very proud of the solid revenue growth at 3.6% growth compared to last year in like-for-like, which does mean in a market which did decline slightly in the first quarter, an outperformance of the group of 4.5 points, a very solid outperformance of the group. We are also very, very glad to see that for the first time, the United States is becoming the first country of the group in terms of revenue. It was Germany in the past. It is now the United States. It is fully in line with the strategy of OPmobility to diversify the geographies and to invest, and to continue to grow outside of Europe. And for sure, the United States is one of the markets we are targeting and we'll come back to that later on. And last but not least, in Q1, we had a very important event for us. We changed the name of the company. Plastic Omnium is now OPmobility. It is a confirmation of the transformation of the group. That is even more than a confirmation, but that is a strong commitment that we will accelerate the transformation of the group, we did engage in the last years. Therefore, a very strong performance in the first quarter. If we come to the second slide, that is about the new name. Plastic Omnium is now OPmobility. We wanted to have a name reflecting what we are. In 2018, we became a pure automotive player. In the meantime, we worked on our strategy to diversify our customer base, to invest in new technologies, to explore new geographies as well. And therefore, we wanted to have a name representing what we are, what we aim for. And that is OPmobility. Again, representing the transformation of the group, our strong heritage from our inside, but also our willingness to continue to transform the company, to benefit from the strong market transformation, and to remain as agile as possible, as close as possible to our customers, and again to embrace all the mobility segments, not only the passenger car mobility, but also the EV mobility, the light commercial vehicles. That is what we are doing mainly with the hydrogen business. We are continuing to develop. Therefore, a very, very strong commitment from the complete management, from the shareholders to the transformation of the group being reflected in the new name OPmobility, since the 27th of March. We do report differently as well, since this year in terms of segments, because we want, first of all to give you more transparency on how we are developing the company and because it does reflect also the way in terms of strategy we are willing to develop the company. We have defined the Exterior Systems modules and powertrain that is what you can see on the on the slide. We have also decided to change the name of the divisions which are becoming our business group. Exterior was in the past IES Intelligent Exterior Systems, Exterior is about bumpers, it's about tailgate, it's about potentially doors as well. Lighting is still Lighting, the Exterior and Lighting, that is Exterior Systems and we believe, there will be more and more synergies in the coming years in terms of products, in terms of industrial between those 2 business groups. Modules was HBPO, is now OPmobility modules, that is modules for Exteriors, but also modules for cockpit. And powertrain is mainly today the ex-CES business, which is becoming C-Power, C for combustion engine, that is the fuel tanks and the pollution system. Within C-Power, we have the small activity e-Power for electrification, and H2-Power is what we called in the past New Energies being focused on hydrogen. I like also to remind that, what you can see on the slide, it means as well that 75% of our portfolio is not depending on the type of powertrain. And that means Exterior, Lighting modules in a way we don't care whether it is electric, whether it is hydrogen, whether it is hybrid, or whether it is a combustion engine. Therefore, we believe with this very balanced portfolio, we are ready to continue to grow and to outperform the market, not depending on which scenario will happen in the coming years in terms of powertrain technology. I hand over now to Stéphanie to comment on the growth of the company during the first quarter.

Thank you, Laurent, and good morning, everyone. Let's now comment on Q1 2024 revenue. In the first quarter, OPmobility posted economic revenue of EUR 2.9 billion and consolidated revenue of EUR 2.6 billion. Economic revenue is up plus 1.6% in Q1 2024 compared to Q1 2023. This includes a negative FX impact of EUR 55 million, notably on the U.S. dollar, Argentine pesos and Chinese renminbi. As a consequence, excluding FX impact, organic growth remains solid at plus 3.6% on like-for-like. Now, if we have a look on the performance per segment. Exterior Systems, representing roughly 50% of the total revenue, posted the strongest organic growth at plus 5.5%. On one hand, Exterior Business Group has a very solid growth this quarter, mainly driven by the robust order intake in the last year. This performance more than offsets the decrease in Lighting revenue, which is fully in line with group forecasts as disclosed during the full year result presentation. I remind you that it is due to a lower order book for Lighting prior to its acquisition by OPmobility in 2022. Moving to modules. Modules' economic revenue is at EUR 804 million euros in Q1 2024. On one hand, the group saw a significant rise in volumes in North America, boosted by the new module assembly plant in Houston, Texas. On the other hand, in Europe, the lower best sales had an impact on the volumes of modules assembled. All-in-all, the business group modules posted a plus 1.1% organic growth year-on-year. Among powertrain, the C-Power business group maintained a high level of activity helped by volumes and favorable product mix for emission reduction systems. In a market where, I remind you, electrification is progressing. This performance was also driven by an increase in interest for hybrid vehicles. The hydrogen activity, H2-Power, is still driven by sales in Europe and in China. For this activity, the group booked in Q1 a new order intake in the United States for a premium OEM for hydrogen vessels for SUVs. On Slide 6, you can see the performance per region. In Europe, where group's revenue represents 50%, OPmobility outperforms the global automotive production by plus 1.2 points in Q1. This outperformance is boosted mainly by the Exterior business group, notably with the production of Exterior parts for the Peugeot 2008 in Spain and for GLR in the United Kingdom. In North America, the group posted plus EUR 100 million of revenue growth between Q1 2023 and Q1 2024. Therefore, the contribution in the group's total revenue of North America increased from 26% in Q1 '23 to 29% in Q1 '24. OPmobility significantly outperformed the automotive market by plus 15 points in this region. This growth is first driven by Exterior with strong volumes on bumpers for GM. This growth is also linked to the modules assembled in the new Austin plant in Texas since September last year. And the C-Power business group posts its sales of fuel tanks and emission reduction systems on Q1 2023, mainly linked with slower base transition for the Big 3. As a consequence, in Q1 2024, the United States is the group's lead country in terms of revenue. Moving to China. In this country, the market is growing mainly driven by electric vehicle production and local players. This impacts our C-Power and Module business groups. Regarding our Exterior business group YFPO, the JV we had with Yanfeng, it continues to produce Exterior parts for most companies outsourcing their production. Last, but not least, Asia excluding China, where group revenue represents 8%, is up plus 7.9% on a like-for-like basis. It outperforms the automotive production by plus 14.5 points. The outperformance is mainly driven by the continuous solid performance of the C-Power business group in South Korea and India. I will now let Laurent comment on commercial and industrial successes.

Yes. We had a strong growth in the first quarter, also because we had many launches. You can see some examples here on the slide. When we talk about many launches, we had 50 SOPs in Q1 2024 compared to 29 in Q1 2023. It does reflect, again, the very strong order book we have. And you may remember that we booked many orders or high level of orders in the last -- in the last 3 years, and that is reflected in the numbers of SOPs we had in the first quarter. I'd like to comment some of them because out of the 50, we have selected 6. Starting with the one the bumpers we are producing right now for Stellantis in Spain, that is Opel Combo, Fiat Doblo, Peugeot Partner, that means like commercial vehicle with strong and stable volumes. We are also continuing to develop our partnership with Toyota for Emission Control Systems that is SCR system for Toyota in Japan. We are continuing to develop our partnership with BMW Mini in U.K. for front-end module for the new-Mini. And we are also continuing to strengthen our position in the U.S. for the Combustion Engine System for the ex-CES, the C-Power system with the launch of fuel system for Chevy Traverse that is in Adrian, in Michigan in our existing factory. Therefore, a strong momentum in terms of SOPs, also less and much more than in 2023. In terms of development of the footprint of OPmobility, you know that we are willing to continue to diversify our geographic footprint, and we are very happy to celebrate many successes in the first quarter. Starting with China for H2-Power, meaning for hydrogen. We have already a pilot plant in China, close to Shanghai in our joint venture with Shenergy to produce some vessels for light commercial vehicle and EV mobility in China. But we have also launched the production on the construction, sorry, of a new factory, a big factory, which is going to have the capacity to produce 60,000 high-pressure vessels starting end of 2026, and we had the celebration of this start of construction in the first quarter of this year. In India as well, we have decided to open new capacities. OPmobility is present in 50% of the market in India, either for Exterior parts or for fuel systems. And we are launching the construction of a new factory close to Pune. The production will start in September, and it will be the biggest factory of the group in India and the 5th factory of the group in India. And last but not least, that is the latest news in terms of inauguration. It was last week in Austin in Texas, the big assembly plant for modules and we'll come back to that, which is already contributing to the fact that the U.S. is becoming the biggest market of OPmobility in the first quarter of 2024. Coming back to this factory in Austin, we cannot disclose the name of the customer, but there are not many OEMs producing EVs in Austin, Texas. Therefore, I imagine you know who we are talking about. It is an order we got in March 2023. We started the production in September 2023. It was a very fast, I would say, program. We took over some production from our customer. Therefore, it started very, very fast. We took over the production from our customer for the best-selling car in the world. You can imagine which car it is. We have already produced 100,000 modules. We have the capacity to produce 2.5 million modules, either front-end modules or cockpit modules, in the coming years for this customer, for different car lines. And we believe, or we think, this factory may become the biggest one of OPmobility in terms of sales already by next year. And we'll contribute to the fact that we intend to double our group revenue in the U.S. in the next 5 years. In all the business groups, we are going to grow in the U.S. in the coming years. Therefore, also a very strong success and the demonstration that we are able as well to adapt to the new way of working of these new players. That means being much faster, much more agile than what we have to do with the traditional OEMs. But strong success for the group in Texas, Austin, and more to come.

Another achievement in Q1 2024 is that the group has been assigned a BB+ long-term credit rating by S&P Global Ratings in March 2024. This rating highlights OPmobility's solid and sound financial structure, its competitive advantage in geographical footprints, its diversified product portfolio and solutions provided to customers. OPmobility also successfully issued EUR 500 million bond due March 2029 with a coupon of 4.875%. The order book was more than 3x subscribed, confirming investors' trust in OPmobility's long-term strategy. The bond issue favors extension of the average maturity of the group's debt in line with its financing strategy. OPmobility remains on track to continue to deleverage as already initiated in 2023, with a net debt reduction of minus EUR 129 million. Moving to Slide 11, the group strengthened its commitment to sustainable development and low carbon neutrality mobility. These commitments were recognized by the CDP which awarded in February OPmobility with its top rating for its climate action, it's the rating A. This rating reflects the significant progress we've made in our climate reporting and recognize the robustness of our decarbonization strategy. For memory, we were still rated B 2 years ago. The group's efforts are also supported by the commitment of its 40,300 employees through proactive initiatives such as the launch of the OPmobility Climate school in Q1 2024. It's an innovative training that helps employees understand climate issues and the role that can play throughout the organization. It includes sustainable practices that can be adapted in daily life. Laurent will now conclude this presentation.

Yes, first of all, regarding the outlook for the rest of the year, you may have noticed that S&P is forecasting a certain decline of the market this year, which was already the case in Q1. We are confirming our targets, our guidance for the full year. That means, we will outperform the market this year. We will grow in terms of revenues. We will also improve all the financial aggregates compared to 2023, meaning the operating margin, the net income, the free cash flow and the net debt. Again confirming the fact that we are very agile, that we are able to adapt to the change of the automotive industry, and that we are transforming the strong order book we have put in the last years. As a conclusion, we are very satisfied with the solid start of the year. Our revenues are in line with our expectations. We are growing while the market is declining. We are outperforming the market. But the strong momentum in North America we wanted to have. We will continue to grow and to invest even more in North America in the coming years with the target to double our sales in the U.S. in the coming 5 years. The launch of the new brand is a very important step in the group history because, again, it's a strong commitment to the transformation of the group who have engaged some years ago, and we're accelerating this transformation. And therefore, we are happy to confirm the outlook for 2024 for OPmobility. Now, it's time to hand over to you for the Q&A session. And yes, the floor is yours.

[Operator Instructions] And we'll now take our first question from Thomas Besson, with Kepler Cheuvreux.

I have a few questions, if that's okay. I'd like to ask them one-by-one. First, I think your main message is that, North America is driving, the study growth you're very happy about. Can you help us understand where you're building these products that are sold in the U.S? Is it Mexico mainly? Or help us basically split these revenues between Mexico, U.S. and Canada, and confirm, if that's okay with you, that this is quite a profitable business for you? First question.

Yes, first question, I mean, we first of all, thank you, Thomas, and I know that you will have many questions. We are used to that. North America, again, it's important for us, because we believe it's a market which is -- which will have less volatility and less competition, I would say, than Europe or China. That's also in terms of margin for long term. North America is probably important for the group. The biggest country in term of sales right now is United States. Mexico is the third country in the ranking of OPmobility. That means #1 is U.S, #2 is Germany, #3 is Mexico. And when we talk about the future growth of the company, we will continue to grow in Mexico, where we have a very strong footprint. But the fact that we want to double the sales or where we want to double the sales in the coming years, that is in the U.S.

Do you mean what you are selling in the U.S, you are also building in the U.S?

We are building I mean, yes, what we are selling in the U.S, we are Mini building in the U.S, it was your question, yes. We have only a few exceptions, but our business I mean, we have few exceptions in Lighting, for example, but the other parts like fuel tanks, like Exterior parts, like modules, hydrogen as well, as Stéphanie has mentioned that we booked an important order for hydrogen for a German premium SUV producer in the U.S. That will be produced in the U.S.

Great. Moving on to my second question. You said that Exterior Systems had quite solid revenues despite a drop in Lighting that came as expected. Can you give us an indication of the Lighting Q1 revenue decline and confirm what you are assuming for the full year in terms of percentage of decline? Approximately, I'm not asking you to give us the exact figures, but are we talking about something in the magnitude of 10%, 15%, 20%, 25% decline for Lighting?

No. We said between 20% 25% for this year and the first quarter was between 20%, 25% in term of decline in term of sales for the Lighting business, which is, as Stéphanie mentioned before, which is just a result of a pretty weak order book before the acquisition by OPmobility. You may remember that last year, for the Lighting business, we booked 1.6 billion orders. We believe we will book a similar level of orders this year, and the first quarter was fully in line with that. Therefore, we are pretty confident to our capacity to grow this business to the EUR 1.5 billion, EUR 1.6 billion in the coming years. But now we need to adapt to, I would say, the pretty weak order book from the past, and it is 20%, 25% below last year. And the team is working to -- we are working to adapt our fixed cost to that to mitigate the impact in term of profitability and to post similar, I would say, profitability compared to last year.

Great. So no change on that one. On the Hydrogen, I mean, great, you have other orders in North America. Can you confirm the revenue sequence you're expecting for '24, '25? And also that basically, you should have relatively similar headwind in terms of adjusted EBIT in '24 than the previous years and that you should then move to something close to breakeven in '25?

I mean, this year it will be similar compared to last year in term of investment, in term of impact on the P&L and impact on the balance sheet. We are building up capacity. I just want to come back to what we mentioned before, the order being booked in first quarter. It's an important one, because it's an important one. It's for German OEM being very committed to hydrogen, willing to produce SUVs in decent volumes starting in 2027, 2028 in the U.S. And for the first time, it is a storage system, which is in terms of packaging being able to replace the battery of the vehicle. That means below the seats basically. That is also in terms of technology, something completely new, which may be a game changer. And again, the production will start in 2027, 2028. Regarding our targets for our revenues, we confirm the EUR 3 billion in 2030. Between now and 2030, it will depend on the speed, I would say, of the development of the ramp-up of our customers. We won't be breakeven in 2025. It will be end of 2026. But again, it will depend on the speed of the ramp-up, and we are pretty I would say pretty cautious in the way we are putting in place the capacity to support our customers, but fully in line with the expectation right now.

Very clear. I have a last question, which is probably going to be more touchy. Can you remind us the review contribution of Tesla in '23 in your business? And also help us clarify the use of this Austin plant because it seems increasingly clear even if the CEO of these companies keeps on changing its view on a daily basis that the Model 2 might be a '26 or '27 event. So, what was built in your kind of '25 expectations from that factory, and is does it affect in any way the past you were projecting? What are you exactly using it for today? And what was hoped for '25 that maybe eventually delayed would be my question as precisely that I can ask it?

The -- I mean, first of all, you have noticed that since 2019, Tesla was growing by 400%, which is I don't expect that they are going to grow by 400% in the next 5 years, but it's a great success. And for us, it's an honor to be part of this journey as well, because it's a very challenging customer, being much more faster and agile than the traditional OEMs, and that is important for OPmobility to be able as well to adapt to this new work working. Tesla in 2023, it was only EUR 250 million for the group. The factory, the new factory in Austin had a revenue of about EUR 60 million in the first quarter of this year. It will be more in the second, more in the third, more in the fourth quarter. What we are producing today, that is for the Model Y. We took over the production of Tesla. Therefore, there is, I would say, no risk in terms of volumes. They did outsource the production of the assembly of front-end modules and cockpit modules. And we are launching as well the assembly for the Cybertruck. Therefore, even if the volumes are today for the Cybertruck not where they should be, it is growth for OPmobility. And you may know as well that, we have a fair deal with them that means that our pricing is depending on the volumes they are producing. For 2025, there was no other vehicle in our business plan being considered in term of sales. But there are a lot of potentials because Tesla is willing to develop this factory with different kind of vehicles in the coming years and we are continuing the discussion with them to sell them on all potential vehicles they may produce in Austin. But there was nothing else being planned in 2025 for OPmobility in Austin.

And we'll now move on to our next question from Michael with ODDO BHF.

Yes. Michael Foundoukidis from ODDO BHF. So maybe I will also ask my questions one-by-one, if it's okay. So first, kind of follow-up to Thomas' questions on the U.S. and then North America. So, I know it's not an earnings call, but could you comment on your North American profitability right now? I know it's been weaker in past year due to Greer, but Greer has been relatively fixed for now. So, would you say today that the region is again more profitable versus Europe?

Michael, that we don't disclose the profitability by region, and we won't start today. But we had issues in the past in Greer. Greer is fully in line with the average profitability of Exterior right now, and it is confirmed again in Q1. And the fuel the C-Power business is more profitable in North America than in Europe. Therefore, for us, it's not only positive in term of growth, but it is also potentially very positive in term of profitability mix.

One other question on pricing negotiation. I mean, we hear from some suppliers that it's probably a bit more difficult than what they thought. From some OEMs, like Nissan that there were more compensations. So what would be your take on that? And how should we think of it looking at H1 versus H2 seasonality?

I think the market is declining this year. That means our customers, most of them are facing this, I would say, drop in volumes. And if you have noticed in the last 5 years, I was talking about Tesla growing by 400% between '19 and '23. You have noticed that the traditional OEMs, Stellantis, Volkswagen and so on, they did decline by 20%. If they want to catch up, if they want to maintain a certain level of market share, they will have probably to be more aggressive on pricing. And therefore, the discussion with them are pretty tense, because we aim to have again price increase for inflation topics and they have to reduce the price of the vehicle, if they want to maintain decent market shares. Therefore, the discussion are tense. The discussions are tense not only on inflation, which is, for us, not the biggest topic. It's much more regarding the volumes. Because most of them, especially the traditional OEMs, they are not having the success they wanted to have on the bed. We have been talking about that since many months or many years. And therefore, the most intensive discussion we have with them is not related to inflation, but to volumes or start-up production being postponed and so on. We had some successes in Q1. We hope to have more in Q2. And I believe second semester should be stronger than first semester in terms of commercial successes for those negotiations.

And maybe a last one regarding China. I mean, you underperformed, given the ongoing market dynamics. What's your take for Plastic Omnium and maybe for suppliers in general, looking at China on a 3-year, 4-year view? I mean, given that this trend is probably going to continue. I mean, you highlighted growth in India. But how do you see China from your point of view? I mean, besides what you said on the hydrogen side, of course.

No, I mean, first of all, China is, as you know, is the biggest market, will remain the biggest market. And therefore, it is very important for us to be present in China. It's also a very innovative and demanding market. Therefore, we want to keep China for sure in the footprint, to keep developing China. But not to be too exposed to China, because it's also a very competitive market. And overcapacity is huge in China, the competition as well. And therefore, we believe in the next year, the pressure on the margin will be even more important than it is today. Therefore, we stay in China, but we don't want to be too exposed in China. Today, we are facing another performance in China. There is one reason, which is due to the fact that there are less and less combustion engines. And therefore, by definition, we sell less and less fuel tanks in this market. That is, I would say, part of the transformation of the market. Not a big impact for us, because we don't have a huge footprint in China for this activity. And we are adapting our capacity to the reality of the market. For the external business in China, we are present with all the players, not only the traditional ones, but the newcomers as well. Like Nio, like Xiaomi, like Huawei, and so on. Except BYD, because BYD is, as of today, not an addressable market. They produce their external parts internally. Therefore, by definition as well, when BYD is roaring, we are reducing our market share on the complete market. Therefore, we are not losing market shares with the OEMs we are working for. We are just not addressing BYD today. We have some activities with them. We start to produce external parts with them right now. And we start also to produce some module doors for them, but still small volumes. Therefore, we will continue to be in China, continue to develop hydrogen. Assess what we can do in terms of Lighting in China, where we are pretty small. Adapt our capacity for the C-Power business to the electrification. And with our joint venture, Yanfeng for the Exterior parts, continue to develop our customer portfolio. And again, to try to convince as well BYD that they should do like Tesla did in the past that means they did start also with in-house production, and then they went for outsourcing.

And maybe a last one. Do you see more competition from Chinese suppliers in your businesses outside China or not at all?

No, no. I mean, there are Chinese suppliers since many years in the U.S. and in Europe. But we don't see more Chinese suppliers coming to Europe or to the U.S. I don't believe it will happen a lot as well. The experience is showing that when Chinese are going outside of China, they are struggling to adapt as well. And the experience is showing as well that when Chinese OEMs are willing to start to produce somewhere else in the world, they like also to rely on the local supply base, which is more aware of the way of working in Europe or in South America or in North America. Therefore, we don't see a trend like that. It does exist since many years, but there is not an acceleration, except for battery for sure, but it's not something which is concerning us.

[Operator Instructions] And we'll now move on to our next question from Akshat Kacker with JPMorgan.

Akshat from JPMorgan. 3 from my side, please. The first 1 on Exterior Systems. I would just like to further dissect the different trends and growth drivers within this new business division. So, if we strip out Lighting that was down 20% to 25% in Q1, it looks like the parts business, which is bumpers and tailgates, was growing very strongly at more than 15 percent year-over-year. Could you just share more details on what in the order book of the last few years is driving that growth, and how do you see that evolving as we go into 2025? That's the first question. The second one is on outperformance. Again, when I look at Q1, there was a very negative regional mix impact in Q1. Despite that, you have posted more than 4% outperformance in the quarter. How do you expect this to evolve in the coming quarters? Or probably, in other words, what are the key ramp-ups you are looking at for the rest of the year? And finally, again, on China, you did mention economic revenues were down 12%, like-to-like, in Q1. Specifically on YFPO-JV, could you share some revenue trends in Q1 for YFPO? And should we be building in any impacts on JV profits for 2024? Because we also did see a second-half profit slowdown last year versus the first half in 2023.

First of all, yes, the Exterior business Lighting is down by 20%-25%. That means that the Exterior business group, bumpers and tailgates, is having a double-digit growth in Q1, which is, again, the result of the strong order book of the last year. Because we were able to gain a lot of market share in this business as well. And it should continue this year. And it should continue also to outperform massively the market in 2025 in this business group. Regarding the outperformance in Q1 and Q2, the geographies were not favorable in Q1 compared to our footprint, as you noticed as well. Therefore, we are pretty confident to outperform potentially even better the market in Q2 than in Q1. But again, it's not only about geography, it's also about customers. But normally, Q2, in terms of outperformance, as what we see today, should be a bit higher than what we had in Q1. Regarding China, our joint venture, YFPO, had similar revenues in 2024 Q1 compared to 2023 Q1. And I would say similar profitability as well because similar revenues.

There are no further questions in queue. [Operator Instructions]

Okay. No further questions?

There are no further questions. I will now hand it back to you, Laurent, for closing remarks. Thank you.

Yes. Many thanks, first of all, for attending this call, for your question as well. And again, we are very satisfied with the start of the year. We are outperforming the market as expected. We are diversifying our geographies as we wanted to do as well, launching a lot of new products, being present with all the customers, transforming the market. And we have a new name because we are accelerating the transformation of the group. Therefore, many thanks for your time today and we will connect again latest at the end of the first semester. Thank you very much. Have a good day.

Thank you. Ladies and gentlemen, this concludes today's call. Thank you for your participation. Stay safe. You may now disconnect.