Paradox Interactive AB (publ) (PDX) Earnings Call Transcript & Summary

Hello and welcome to the Paradox Interactive Year-End Report and Q4 2021 Stream. My name is Fred Wester, I'm the CEO with Paradox. And with me, I have Alex Bricca, who is our CFO. And together, we're going to present this during half an hour, and then we'll take some questions that has been trickling in over our forums and by e-mail. So we hope to be done in an -- in under an hour.

Hello, everyone. So let's jump into it.

Yes, let's start. That's me, right. So if you start by summarizing 2021, you can say that it's -- it's been a disappointing year because we went down in revenue and on profit and we've had some quality challenges. We've had a few releases, and we took a lot of one-time costs due to canceled projects. So this led to the year not being satisfactory at all, and we -- we look forward to actually closing the books and moving on to the next year, even if we think Q4 is actually a step in the right direction. During the last 5 months, 6 months, we've been focusing on the changes that the organization has to go through to be competitive and take the next step in our journey to become even bigger and even better than we've been in the past. So we've adjusted the organization and the processes to create better conditions, so we can grow more faster and more organically. And you can see that this has gone a bit faster little -- well, like I also say in my words from the CEO part of this report that we can see the positive effects already in Q4, and this will give us a boost into 2022 as well. So how do we create good preconditions for continued organic growth? Well, first, we have the organization, where we have worked to increase focus on the KPIs, the goals for each department and for each group of people, including responsibility and goals. We worked with our leadership program to develop a better program and a better support for our leaders throughout the organization, something that has been very hard throughout the COVID. Obviously, a healthy dose of cost-consciousness is important in an organization as well, not only cost-consciousness in general, but also the focus of the cost, like a lot of our marketing efforts in the future are going towards building more of a stable and focused community around our games. And it's important that people know what the focus is for the cost and for the things that we're doing. On the development side, we've launched a couple of initiatives to increase the quality, speed -- of -- quality and speed of releases and also work to balance out the risk profile of the pipeline going forward. We don't have to close down so many games that has cost a lot of money. So start many projects, kill early has been the new way of working for Paradox going forward. If you look at third-party development specifically, I've gotten a couple of questions if we're closing down third-party, but that's not the case at all. We're just -- we're actually increasing the number of third-parties we're working with, but we look at new ways to limit the risk that we're taking in every project. So we're not closing -- we closed, I think, in the last 18 months, 7 projects for a total cost of SEK300 million, and we're looking to avoid that going forward. And so we reworked, we formed a new -- new games team that is working specifically to find and sign third-parties that is being done separately from the rest of the organization. So it's a dedicated team, who only look at new gaming opportunities and new franchises, new ways of monetizing for Paradox. And one of these things is obviously to quicker identify any problems or any quality issues that might be with a product that will lead to us canceling the project going forward. So we're starting more projects, we're closing more projects. But overall, it's -- we think it's a model that is going to work with. If you take quarter 4 in summary, we had one full game release, it was Surviving the Aftermath that was going out of early access into a full game release and we released 5 DLCs of varying scope and size. We had -- throughout the year, actually, we stabilized our MAU around just over 5 million monthly active users, which is really strong, considering we didn't release as many content packs, as we usually do in a year. So we're really happy that we could preserve and we could grow a bit as well the number of monthly active users. Our top earner for the quarter are the usual suspect, you look at Crusader Kings III, Hearts of Iron IV, Stellaris, Europa IV and Cities: Skylines. And the pipeline and projects going forward, we closed 1 project in this quarter as well. And our pipeline is now a total of 20 games, of which 6 are in the new games team with a new initiative that I was talking about before and 14 are the main pipeline of Paradox. And I'm confident to say that we've never had a stronger and more focused pipeline than we do at the moment. So we're really looking forward to announcing a couple of these games in the future as well. It's going to be -- it's going to be great.

And it can be added here, I think it was the last Q report, where we, for the first time, announced how many projects we had in the pipeline. And at that point, we said 15.

Yes.

That -- that contained the 14 plus the 1. So we didn't disclose the 6 at that point.

Right. And it's worth mentioning how we are -- how we're using accounting standards for the new games team as well, maybe and so.

Yes. That's a good point. So for the 6 projects that are under development under the new games team, we are taking a more cautious approach to capitalization. So normally, with the proven game, which are in the 14, there we start to capitalize on the game as soon as the project has been approved and been allocated a budget. But with the new games teams games, there, we wait [ two ] development stages before we start capitalizing. So that means that we are taking bit more costs immediately, but an effect from that is that we will see less cancellation -- well, same amount of cancellations, but less amount in SEK being written-off when we cancel the project.

Yes. The hit will not be big.

Correct.

After the quarter, because this is quarter 1, we released Airports DLC for Cities: Skylines, Perfect Storm for Prison Architect and Royal Court for Crusader Kings III. So we have been quite active in Q1 as well so far. And over to you, Alex, for the numbers for Q1.

Thank you. So revenues for the quarter, SEK 391 million, that is a 10% decrease compared to same quarter last year when we did SEK 434 million. As always, our revenue is driven by the content releases. So if you compare the quarters, Q4 from '21 with Q4, 2020, the content being released in each quarter is very similar. So if we look at the last one, Q4 '21, we had the full release of Surviving the Aftermath. We had No Step Back, the expansion to Hearts of Iron IV was sold very well. We had Aquatics for Stellaris, Origins for EU IV, Necroids for Stellaris Console and Make It Count for Empire of Sin. So not a bad slate at all. One year earlier, we had similar, similar releases, I would say. We had the early access on Steam for Surviving the Aftermath. We had the Bosporus DLC for HOI IV, Necroids for Stellaris, Star Kings for Planetfall and Empire of Sin, the release of the base game. So quite similar releases during the quarters. But the main reason why the fourth quarter of 2020 outperformed last year's fourth quarter is what happened just before the quarter. So as you might remember, in September 2020, we released Crusader Kings III, that game sold a lot in September, but also in October, November and December of 2020. So that's pushed up the Q4, 2020 revenues. In 2021, we didn't have any corresponding game release in Q3. So that is the main reason. Fredrik, you mentioned the top 5 contributors, the same 5 that are often on the list. Let's move to operating profit, SEK148 million Q4, '21 compared to SEK 78 million almost the quarter from the previous year. So that is an 86% increase quite a lot. So revenue is down 10%, but profit up 86%. So that means, obviously, that the costs have been decreased significantly, and we will go through that more in detail. Earnings before tax, SEK 147 million Q4, '21 million compared to SEK 79 million Q4, '20. Profit after tax, SEK 116 million Q4, '21 compared to SEK 60 million Q4, 2020. Operating profit margins, Q4, '21, 38%, which is decent compared to 18% the previous year's quarter. Profit after tax margin, 30% in Q4, '21 compared to 14% in Q4, 2020. And asset -- the equity to asset ratio has gone up, and so has the number of employees, 721 million compared to 662 one year ago. So let's dive in a bit into the cost, especially the cost split here. So the revenues, you can see makes a nice turn upwards from Q3 up to Q4, driven by -- by the content releases. Cost goes very nicely in the opposite way. So it's -- especially from Q3. Q3 was exceptionally high in terms of COGS, the yellow line. And as you might remember, we did a big cleanup in terms of project and canceled several projects, I think it generated some SEK134 million in write-downs in that quarter alone. So we didn't have the corresponding write-downs this quarter. So therefore, cost goes down. But let's compare, as we always do with the same quarter of the previous year and there you can see that the total -- if you add -- if you add the 3 main costs together, you can see that they add up to SEK 262 million Q4, '21 compared to SEK334 million Q4 last year. So it's a -- it's quite a good decrease and it comes from COGS and it comes from selling expenses. So COGS, cost of goods sold, that's the cost for our all internal studios. We have 9 of them. It's a cost for our external game development. It's royalties that we pay to external studios, where we have royalties to pay. It's depreciation of the brands and games that we have acquired over the years that we have chosen to depreciate. And it's also cost for the part of our publishing organization that works with game development and development support, tech maintenance and so on. So it's -- it's our DevOps team. And the cost of goods sold, as you can see that it's always our biggest cost. So why has it gone down from SEK252 million Q4, 2020 to SEK196 million, Q4, '21. So in terms of game cancellation, it's very similar. We canceled one project in Q4, '21, impacting our result negatively SEK26 million, Q4, 2020, it was also one growth with SEK24 million write-down. So not much different there. We have -- I think, of course, compared to Q3, this write-down is much lower, and it's getting close to the 1.5% to 2% of the [ capital ] development that has been -- that has been the rough average over the last years with the last 5 months being an exception in the wrong way. So we are getting in the right way, but still SEK26 million in one quarter, we think it's a bit too much. We -- our aim is to not having these big write-downs, and we will definitely continue to see cancellation of projects. But the trick is, of course, to cancel the projects much early on -- earlier on than we have done during the last 18 months. And we believe that with the new setup, with the new games team and the approach we take to capitalization, we will see the impact of this going forward. What else makes up the difference? Well, amortization of the released games, important difference, SEK 60 million in Q4, '21 compared to SEK83 million in Q4, 2020. And the reason is in -- when we released CK III, we started with a degressive amortization method, meaning that we take much more costs at the beginning after the release and slow -- little by little we will decrease the amortization. In Q4, 2020, we had both CK III and Empire of Sin being -- having been released very close to the quarter. So that meant both those games were in periods, where we amortized quite a lot. Now we are at a very late -- very kind of last stage of the amortization of the base games. So we don't have much left to amortize. So therefore, we see a SEK24 million cost improvement. More, we have royalties. Royalties is what we pay to the most, you could say, successful external studios. So in our case, it's mainly Colossal Order for Cities: Skylines. So Cities: Skylines, we're very happy that we came out with the new DLC now in Q1, but it has been almost 2 years since the last full expansion release there. So that has meant that the revenues have gone down slowly for that game up until, we, of course, came with a new release. So Q4, '21 saw much less revenues compared to Q4, 2020, and therefore, we also pay less royalties. What else...

Yes.

Yes. And then, we have -- we have cost that we -- for the part of the publishing, especially that we don't capitalize the work with the game development. So that is also a cost that have gone down significantly from last year's Q4 to -- sorry, for Q4, 2020 to Q4, '21. Some initiatives, where we have been able to work smarter. So that adds up to a good decrease in COGS. Selling expenses also down from SEK 58 million or SEK 59 million to SEK 44 million. Less activities in Q4, '21. Q4, 2020, we had the release of a new game, which generated quite a lot of marketing effort and cost. We have not had the same efforts in Q4, '21. We have also done significant cost efficiency efforts, I would like to call it in marketing, where we have been able to get out much more for every SEK spent. So that's something really good. Administrative expenses fairly flat, SEK 23 million in Q4, 2020 to SEK 22 million in Q4, '21, so almost the same. Now we have -- normally, this explains everything. But now in the -- if you look at our income statement, you have 2 items below the administrative costs, one is called other income and one is called other expenses, and they vary significantly if you compare these 2 quarters. In Q4, 2020, it was negative SEK 21 million and that was 90% of that was due to FX movements during the quarter. So at the beginning of the quarter of 2020 of Q4, we sent the invoices to our distributors for Crusader Kings III. So big invoices that we took on the revenue, translated it to SEK. Then 1 month later when we got payment in dollars, translating that dollar to SEK, we got less because the dollar had decreased during that month. So that gave us a significant hit on these other expenses. Q4, '21, you could see the opposite. The FX moved in for us the right direction. So we had the positive FX impact. We also had a pleasant positive result in Hardsuit Labs, where we own 33%. So the profit that ends up in that Company, our part of it ends up on this row. And we also sold the rights to a project that we had been developing -- or sorry, an external development studio had developed a game for us. We canceled the game earlier in '21, but the studio wanted to continue with the project, and so we sold them the rights to the project. So that also added up to the almost SEK 20 million as other income. So all-in-all, this makes our operating profit increase with 86% Q4, 2020 to Q4, '21. Let's move on to revenues and profit quarter-by-quarter. This shows, as always, it fluctuates quite a lot from quarter-to-quarter. You could also see that we had a very good trend from Q3, '19 up to Q3, 2020, especially in terms of revenues, all had to do with a very good slate of content coming out, also helped by a general increase in gaming due to the work from home situation driven by the COVID. After Q3, 2020, we -- our content velocity clearly declined and that translates immediately to the revenues. So we have had a trend, I think, up to Q3, '21, where we have had less content coming out and therefore declining revenues. But in Q4, we started to see a good impact from different initiatives and revenue picked up. Hopefully, we will see the same in Q1, let's see. And you can also see very clearly the impact of the big write-downs we made in Q3, creating a negative result. Let's move on to the next slide. Here, we have pretty much the same thing as on the previous slide, but we have grouped all the quarters together. So it's a rolling 12 months. Yes. So here we can see that we have had a negative trend for 4 quarters. Profit-wise, we broke the trend in Q4, '21. So -- and it's pointing upwards quite significantly, and that has to do with several cost initiatives that bore fruit. Revenue, we haven't broken the trend yet. We have several initiatives there to improve revenue, but it takes more time before that has an impact on the revenue. Cash flow, solid quarter cash flow-wise, SEK 269 million generated by our operating activities, a bit tough to compare with Q4 of 2020, that is where all the money from the CK III sales came in. So the revenue came in, in September when we release the game, but the money actually landed on our accounts 1 month early roughly. So therefore, Q4, 2020 was amazingly good. But Q4, '21, still very good. And as always, we invest whatever we make, we kind of invest in new -- especially in game development. It fluctuates a bit quarter-to-quarter, but over time, it's very evident how we work. So if we group together the last 4 quarters, so if you take the cash flow 2021 from our operating activities, it amounts to SEK 737 million and cash flow from our investing activities amounts to SEK 744 million. So it's almost down to the dime that we reinvest the money into new game development. Equity and non-current assets. So our non-current assets, this is mainly our capitalized development. It was SEK 1.2 billion, as end of year, a 30% increase from last year. And the rest is the value of the capitalized IPs or the acquired IPs, I should say. The acquired IPs that is on the balance sheet and also the right of use assets. So that is all our rent agreements that is on the balance sheet, both as an asset and as debt. And it's, of course, good to see that the equity in our Company almost covers all our non-current assets. So that means that all our assets have been financed by our own profits over time, which is good.

That's it. So should we dive into the questions. We have already received a few one. Should I read the questions and we...

Yes. Sure. If you read mine, I'll read your question, so we'll take turns.

Okay. First to you, should we expect $30 to be the price of DLC in the future?

Well, so a bit of context to this. Royal Court for Crusader Kings III was our first $30 DLC, and we will continue to be flexible in our pricing policy depending on the release, depending on how big the actual development is, and the value that we perceive in the product as well. But in general, you can say from our perspective that our DLCs have been priced lower than many of our peers have. So we might adjust our prices upwards. Yes, that's correct. But not all of our DLCs are going to be at $30 in the future. No. But you might expect an upward trend in pricing [ it ]. So for Alex, do you think Microsoft's consolidation of the industry is a long-term threat? It seems as they are building a much more powerful distributor in Game Pass?

Yes. They for sure, have built something great with Game Pass. We don't see it as a threat at all. We're happy with more distributors and more platforms being offered to the players. We have been very successful over the years with our partnership with Valve, and they have been very dominate -- dominant during those years. So now adding on more distributors, we think it's great. We will continue to focus on making great content. We think that's a way forward for us. And in terms of Game Pass in particular, it's a subscription service, which we think is very interesting. We are very happy with our business model with base games and expansions, but we have been testing with subscriptions on our own, but also with Microsoft Game Pass. I think -- I think they launched their PC version back in summer of 2019, and we were on it immediately with, I think, 3 games from the start, and we've been adding on since then. So -- so it's -- it's something we are happy to continue to do. Yes. So next one for you. Was there a much higher fluctuation amongst Paradox employees in the last half year. If so, why?

Yes. We experienced a bit higher employee turnover for 2021 than we had before. It's not alarming rates, but it's a bit higher. And one -- one of the reasons is that we discontinued 7 projects. We -- most of our employees are, I would say, a large majority of our employees are super ambitious and want to work on world-class projects, and they're passionate about what they do. And of course, if you could discontinue a project, there might be challenges in finding a new role in the Company that is as challenging or good as the one they had before. We also see an increase due to the COVID situation. And I think most companies experienced that same, same like turnover in employees as well. And we had more, I thought about something else as well.

Do we have more questions?

Yes. But I think also -- I think also what I was going to say was that we've changed some of the strategy in the Company as well and taken a new direction. And some people hasn't been like agreeing with or aligned with the strategy has chosen to leave as well. So there's been a couple of different factors, but there is no alarming rate of people leaving. It's just that it's been a lot of changes, as of late.

So I'll take a follow-up question to you on the -- this is very similar. What are your plans to ensure good talent acquisition and retention?

Yes. The first one is, obviously, that we want to work on world-class projects. We want to be best-in-class in everything we do, and we want people to feel that they're working at a Company that has world-class projects, and we do -- we're always leading in everything we do. We're going to continue to focus on the work environment and a positive culture, Paradox as well. We're going to have good and competitive remuneration packages for people, who work here. And we want to ensure that people can have a good career development at Paradox as well. And as I said, projects that people are -- are passionate about. That's absolutely key, so.

Sounds good.

So next one is for you, Alex. It's about ownership in the Company. So Tencent raised its stake in Paradox from 5% to 8.5%. Can you give us some more information on whether there is a bigger plan behind this? Has the communication or relationship with Tencent changed?

It's not really a question for me. It's a -- we have always had a very good relationship with Tencent, and we are happy that they have increased their ownership, and we're very happy about the confidence that they show in us by doing so. But apart from that, questions regarding their ownership in us or any other company should be directed to them. I don't know much more.

Yes. To their head office in Shenzhen in China. Yes. We can't really -- we can't really steer, who is buying our shares in the open market.

That's right.

So let's continue. Should we expect core strategy titles such as Victoria 3 to have console versions going forward? If you ask me, I would love a console version for all our games, obviously. And we've had some positive experience from the console ports -- console port of Stellaris in general, and we're now looking forward to the release of CK III by the end of this quarter. But decision is going to be made on a case-by-case basis for all our games, if they fit for console, if we feel it's the right decision to release in a console, we'll do it. But there is no like decision that everything has to go out on console, no. But if we get the opportunity, absolutely.

You can see towards the end our quarterly report, we split up the revenue based on platforms. And I think in average, during '21, we had 13% of all our revenues coming from console. So it's a significant part. And especially if you take into consideration that not all games are on console.

Right. Right.

I'll give you a new question. You're worried you're not releasing enough content and high enough quality content at the same time. How do you work on both of those at the same time without destroying staff morale?

Well, that's a good question as well. So we have a lot of really, really good developers at Paradox. And of course, you have to be careful about how you handle the projects and what you do. But one of the things is, we want to have a greater focus on resources directed towards in-house development rather than doing a lot of development with third-parties. That's one way to do it. We're going to strive for smaller teams that are more senior and also more autonomous, so they can make their own decisions. You speed up the process of decision-making by making the teams more autonomous in the first place. It's also a good way to make parallel development possible. We are going to work with third-party on some ways to increase content velocity as well. But all-in-all, the autonomous process -- the autonomous team process is going to allow for greater influence on all the important decision in regards to the game. So the lag of time that it takes for -- to get a decision from top level is not going to take that time because it's going to be made by the teams. And we're combining all of this with a strong peer review process that has given us super good effect on the quality overall. We have a whole range of really senior and great game directors, who help each other to increase quality and also actually increase content velocity. So I hope that answers at least some of the things that we're doing. So why did headcount fall in this quarter? Is that your choice? Or are you struggling to retain those employees, Alex?

That's a good question because I showed you that the headcount had increased compared to Q4, 2020 to -- I think it was 600 something to 722. But compared to the beginning of Q4, '21, I think we were 742. So we have decreased with 20 FTEs. And it's people that have chosen to leave, but we have chosen to not replace them, to not recruit, make replacement, recruitments for everyone, and that's by choice. And that is a choice that we're going to continue to do quite often during the rest of the year. We're going to scrutinize carefully, which roles that have been -- become empty that we want to fill because with a more focused business, more focused business operations, it becomes slightly less complex. So we don't have the need for the same amount of staff. Yes.

And we will see we're going to grow going forward as well, but it's going to grow together with revenue. So not only with -- with the FTEs.

And it's -- and I can share that it's especially or it's only if you add everything up in our publishing business that we have decreased staff. In our studio business, we have all-in-all, increased staff.

Yes.

Question to you. Across all core franchises, there has been a notable slowdown in the release of additional content. Have any concrete actions been taken internally since then to reverse this trend, so that investors and customers alike can see a return to more regular paid expansion content releases?

Yes. As I mentioned in the quarterly report, we've launched a number of different initiatives, and I've touched on them in the previous questions as well. But the main focus right now in the organization is our in-house development with a particular focus on the live games that we have in operations. And I'm not sure, I can go into more detail on that, but that's where we stand at the moment. So we think that's going to bear fruit within a few year. It already did in Q4. It's -- we see that in Q1 as well. And to Alex, can you shed some light on the SEK17 million investments in other financial assets in the quarter. I'm a bit curious about that as well. I have no idea what this is?

Yes. No, so it's not as exciting as you might think. So this is rent deposit. So we have kind of locked SEK17 million of our cash on our bank account for making a security to our landlord. And this is something we did when we moved in here some 2-plus years ago. But now we have realized that, that, that should be reclassified, so it shouldn't be classified as cash as it has been before, but instead as a financial investment. So it's just the reclassification of cash on our balance. Yes, nothing more fancy than that.

Right. Fair enough.

Okay. Is Paradox Interactive confident that it can release a strong line up of core franchise products throughout 2022 to maintain a growth in revenue as well as a growth in player base?

I'm really positive about the pipeline going forward. I think we've never seen a stronger pipeline than we have at the moment. We've never had a better team than we have at the moment, more veteran team. We've never had a better plan on how to release and how to monetize content, so I'm very, very positive for the future. What happens in 2022? I mean, we need to release games when games are ready for release, and we might announce some games in 2022. We might not announce some games in 2022. It's all up to where we are in the development cycle and which games are ready to be shown. But rest assured that we're working hard to not only maintain the revenue this year, but grow it compared to last year and grow the player base as well. And that's our -- that's our goal every year.

So this is a question. It's written in the question that it is to you. So Fredrik, could you provide some concrete examples of quality issues you have observed since coming back. You are taking measures right now, but how far have you come in the journey of restoring satisfying quality levels?

I think we've come very far because it's mostly a focus thing as well. And I think you can see that in the releases of, for example, No Step Back in Airports and Royal Court, first and foremost. But on the other hand, quality is an ongoing process, so you're really never done with it. Like I said, we want to release things when they are ready. And sometimes, we do it really well, sometimes not so well, but we hope to be doing more good stuff than not so well stuff going forward. So it's an ongoing process. But I think we've seen the first steps in the past 3 months, 4 months.

Okay.

All right. With regards to capital allocation, given the stock price today, would it make sense to buy back shares at the current price and to pay a dividend. The dividend is also a lot more tax inefficient, Alex. What do you have to say?

Yes. As -- so first, this is a question to shareholders more than -- more than management. But as long as we are listed on First North, where we are today, where our stock is listed, we can't do this. We are not allowed to buy back shares. So it's an easy decision at this point. Okay. On the 14 major projects with a normal 3 years to 4 years development time and not starting over now, that would imply 3 games or 4 games annually, even if some are canceled. Should we assume that the reset and focus on quality means that we should expect a rise in cadence over coming years?

Just a second, just...

Well, I can start by saying that in 2021, we released 0 new games. So an increase in cadence compared to that for sure.

Yes. You can expect a rise in cadence over the coming years. Yes, it's the short answer. And then we'll see how many games it is, how many third-party, how many in-house games there are. But in general, yes and up from 0, obviously, it's -- everything is up from 0, so.

I'll give you another question. Game Pass for CK III, what have you learned from the experience something to repeat?

Game Pass first, actually, I'm going to wing this question. So if our analytics team is watching this, you can correct me if I'm wrong. But I think Game Pass, specifically for CK III and IV are grand strategy products in general, is a good way to introduce the games for new players. Our games have a tendency to play the games for years and years. You can see that the number of people playing Europa Universalis IV, for example, is twice the number of people now compared to release quarter in 2013, and that's close to 9 years ago, in August, it's going to be 9 years. And this is quite unusual for games that are not online games, if you take the League of Legends and whatever on the world. So we're super happy to have that like repeat customer. And if Game Pass can help us new -- reach new customers that are introduced to Paradox grand strategy games for the first time without taking any risk of buying something for $40, $50, $60, we think it's really good. But we need to look into the numbers. We need to see, is this something we're going to do? Is this something that is actually lucrative long term for Paradox as well. But I think that's at least close to the answer.

Do we have one more question?

Yes. It's from Carl Armfelt at TIN Fonder. Are employees back in the office after Omnicron, Omicron or Omnicron, I don't know, Omicron, it sounds like, yes, I don't know. And if so, is that important?

They are starting to come back in a fast pace now. It's a couple of weeks ago when the restrictions were released, and team after team are coming back. We will be at this point at least, we will start off being more flexible than we were before the pandemic, but it's clear that the office will be the main place for work. And I think this is going to have a very positive impact, perhaps it will take some time before we see the effects of it. But in the long run, I think it's going to be very important for our colleagues to come back and start joining physically working together at the office.

Indeed. That's it. That was the end of the question. So me and Alex, we want to thank you for watching.

Thank you very much.

And you know where to reach us if you have any further questions.

Yes.

We're not sure we're going to answer them though, but it never hurts to send an email.

And if not, we will -- or at least you'll see us in the beginning of May, when we release the first report of 2022. Looking forward to. See you then.

See you then.