SFC Energy AG (F3C) Earnings Call Transcript & Summary

Dear ladies and gentlemen, welcome to the publication of the preliminary figures 2020 of SFC Energy AG. At our customers' request, this conference is being recorded. [Operator Instructions] May I now hand you over to Peter Podesser, CEO, who will lead you through this conference. Please go ahead.

Thank you very much, Angela, for the introduction. Good morning, ladies and gentlemen, from a, obviously, chilly but sunny morning here in Munich. We had, whatever, minus 13 degrees C, which is a good start into winter day. Daniel Saxena and myself, we will be happy to lead you through this call today. We are conducting the call from different physical locations according to our COVID protocol in place. Well, thank you for taking the time and joining us today. We are going to report on 3 main items. First of all, and as usual for this time of the year, we are pleased to present the preliminary consolidated figures, as you all know, as we all know, nonaudited yet and, therefore, naturally not in every detail with a review on a challenging environment in this past year and looking to the individual performance of our different parts of the business. The second part, and this is also why you found an ad hoc announcement this morning also from SFC Energy, we are today reinstating our guidance for the year 2021, despite still an environment that is -- despite an environment that still is characterized by actually the impact of the pandemic situation, we feel confident enough and we have in as visibility for our judgment from today's point of view to give a proper guidance and reinstate the market outlook for 2021 today. And the third part of the presentation is an assessment of the overall larger grand picture. Hydrogen and fuel cells have seen an enormous interest and a very dynamic environment has unfolded over the last 12 to 18 months. And we have taken time in the last 6 months to revise our positioning and planning for a 5-year period, and we will be happy to share this in more details with you. Sharing the presentation, and actually the Q&A session, I would start off with some of the highlights of the past year. Daniel giving you an insight into the current set of numbers, myself going into the segments and then into the outlook and the midterm consideration. And then actually, we will be happy to get your comments and questions. Well, summarizing 2020, I think it's, well, no secret for all of us that COVID has impacted not only all our lives but also the business life. But as already published back in November with our 9 months' figures, we could expect -- and we also now see the proof of it -- we could expect a significant upturn in the last quarter of 2020 with a strong Q4 here with about EUR 14 million of revenue, which is, let's say, slightly below the previous year's fourth quarter, but this was prior to COVID. So we feel, overall, a pretty solid business performance in, well, a highly challenging economic environment. We see a different impact on the business, continuing a picture that we already laid out to all of you in November with the 9-month results, a continuously, well, strong and dominant impact here by our civilian fuel cell business, regionally broad and unprecedented momentum in the demand for methanol as well as hydrogen fuel cells for industrial and consumer applications. One key element. We don't want and we don't have to hide the negative impact of the corona situation on our Defense & Security business here with significant delays in the international business and also the impact on our power electronics business as well as oil and gas whereas, I think, the latter one was the positive surprise in Q4 with a strong and solid rebound here since August time frame. Summarizing the year 2020 and some of the key achievements or highlights. I think the market entry into the hydrogen fuel cell business is definitely a milestone for us. The digital government radio program called BOSNet is unfolding faster than expected. Together with our partner, adKor, we are consistently delivering and installing products in the field so that we can save from our original planning to the result then in 2020 year significant acceleration and faster than expected with, let's say, more than 250 units installed in the field. Regional expansion of the business, second element, very happy. Well, back in November, we reported here together with our partner, Toyota Tsusho that after a successful, I think, business development period here of a couple of years, we agreed on an exclusive distribution and exclusive cooperation agreement for hydrogen and methanol fuel cells covering the range here below 100 kilowatts for the Toyota Tsusho organization. And well, it was also already, at that time, clearly formulated. And we are working on this as we speak to assess here the next steps and prepare the next steps to join forces in other parts of Asia, I would say, soon. Although Defense & Security definitely delivered the most disappointing numbers last year, I think it is important to see that we worked further on the OEM partnership sites joining forces here with Jenoptik. Their mechatronics arm, VINCORION, and us offering off-grid, low-impact, silent zero emission systems here for Defense & Security users. On the consumer front, in our consumer business, I think that the collaboration with ePropulsion, one of the leading manufacturer of electric boat engines, again shows this sustainability tracked a change in the environment, replacement of incumbent technologies. And yes, the EFOY fuel cell fits an electric engine naturally perfectly well, and we show versatility with this combination. Major milestones Gen 5 EFOY, fifth generation of EFOY introduced into the market. And funny enough, we did this even physically, launching the product at the Caravan Salon in Düsseldorf in September together with our lithium battery. We were proud and we are happy that this hybrid package consisting of the fuel cell and our own lithium-based battery that this hybrid package now was awarded the European Innovation Award in the European camping industry. So I think if we now look at the overall environment, we simply can feel in the overall demand for our product that hydrogen and fuel cells are seen and adopted as key technologies on our way to net zero, replacing conventional technologies like diesel generators, in a broad sense, in stationary and off-grid applications. I think the good thing for us is being there now for 20 years and being commercially for 15 years, we are already serving a number of industries. We have established market access there. We have solid partnerships in place. And therefore, well, we can make use of this momentum simply faster and earlier as other parties are joining the club right now. So overall, on our way to net zero or a low-carbon society, I think we can deliver a good piece to the puzzle. But now going to the solid numbers, I would like to ask Daniel to lead you through the set of numbers as of today.

Thank you, Peter. So what you've seen in our press release, our total revenues for the fiscal year 2020 is about 9% below last year's total revenues, mostly because of the aftermath of the second quarter, which was quite challenging with the COVID pandemic on the rise, and also at the beginning of the third quarter where we still had to handle the challenges of the COVID pandemic. Also, that is in line and pretty much what we also discussed in the third quarter already. The Defense & Security segment was the most challenging -- or had to deal with the most challenging environment in the pandemic. If we look at the fourth quarter, simply, we'll see that the fourth quarter total revenues are 5% below the previous year quarter. And we see that the positive development that we had in the Clean Energy Mobility segment continued. We are 12.12% above in the fourth quarter compared with the fourth quarter of the previous year. And if we look at the entire year, we are pretty much 62% above the revenues from total revenues in the last year. So there's also -- the trend that we saw in the first 3 quarters regarding the segment Clean Energy, Mobility has continued. And as Peter mentioned, there are very positive impulses in there. Also, with regards to the trends continuing, applies to our Oil & Gas segment. Overall, as we already mentioned, it has been a challenging environment in that segment. So we are 20% below last year's revenue. The same applies for the fourth quarter, pretty much also 20% below compared to the fourth quarter of 2019. Industry has had a better quarter in the fourth quarter than last year. We have approximately 12% above the revenues of the fourth quarter in 2019. But still, we are below on a full year basis in terms of revenue looking at 21% below last year's total revenues. And as I mentioned before, the segment mostly impacted and affected by COVID was Defense & Security. The fourth quarter revenues were 18% below the fourth quarter revenues of the previous year. But still, looking at the entire year, and we discussed those reasons in our third quarter results call, still, we are 60% below the total revenues of last year, if we look at the full year. When it comes to the EBITDA margin, adjusted EBITDA, we're looking at EUR 2.9 million, which translates into an EBITDA margin of 5.5%, slightly below last year. But given the challenges in the environment and what we've seen at the beginning of last year, of 2020, it's better than what we initially expected. So we're looking at a 5.5% EBITDA margin versus 6.2% adjusted EBITDA margin for 2019. EBIT adjusted is negative EUR 600,000 compared to a positive EBIT adjusted in 2019, which was about EUR 300,000, translating once again in a negative EBIT margin -- adjusted EBIT margin of 1.1%. Thank you.

Well, thanks, Daniel. Now let me try to give you some more color also to the numbers on a segmental level. By no means we intend to hide any after, I'd say, call it, impacts of COVID or the weaknesses shown in the pandemic environment here in the different markets we are operating in. And so let me maybe turn around or turn upside down the sequence here and start with the most challenging environment, yes, Defense & Security. Daniel has mentioned that about 60% decline in sales compared to the year before. The key element here was the fact that as of late March and then April, May, June, we saw key markets going into really hard lockdowns, especially internationally, to mention here, India and Israel, where programs were scheduled to be executed. No doubt that this is a business that's still today is supposed to land in our books, and we see activities since beginning of the year. But with a country being in a lockdown situation where you can't move from one province to another in the case of India but also in Israel with simply a standstill as such, we have to face delays here. Overall, even also in Germany, we saw actually a slowdown in execution. And so we, at the end, have the situation where I think we can wholeheartedly say we are unhappy with the financial performance. I think we can -- we need to acknowledge that this was external factor. And if we want to see one positive in this overall development, it is that we have not lost a single program here during this period. And what we now see since beginning of the year is, especially on the international front, movement on existing programs. We have answered tender requests already in India. We have answered, I'd say, significant requirements, RFQs, here out of Israel. But we also see a high level of activity in our European markets, including Germany and so, therefore, pretty confident, naturally coming from a very low level but with -- I'd say with this mix of domestic and international business, getting back into a significant growth path here for the year 2021. The timing, I think, is highly depending also on the development of -- and the easing of all the pandemic restrictions in place. But yes, still, 15th of February, we still have 10.5 months to go. So confident here. Second business segment with an impact, yes, our industrial power electronics business. Q2 and Q3, we saw the expected I'd say, reduction of call of orders by large customers, our big partners there, people like Thermo Fisher, Bosch Security Systems as well as ASML. And we usually have a pretty long -- or a good visibility for half a year. And so that's why we were so confident to get back on a growth track in Q4 with a good 4 million order. In Q4, I think we have delivered this, and I think we have all the reasons to believe that Q1 will be at least as active as Q4 2020. So what we see here is that customers have adapted to the situation and the business models work despite corona limitations. So also here, solid growth outlook here not only for Q1 but for the entire year, and this is naturally also a part of our guidance for this year where the range of EUR 61 million to EUR 70 million contains growth here in all markets. Oil & Gas. We were expecting the worst back in March, with an oil price turning negative in April. But since August, September time frame, stable oil price environment, overall investment activity back up. We did revise our internal scenarios here, and we ended the year here below 20% of deviation, which naturally is only a relative benchmark. But our original assessment for the year had seen different numbers back in March and April time frame. So Oil & gas, solid end of the year. And getting back to now the positive, yes, what is the driver for our Clean Energy & Mobility segment. We -- the business proves to be extremely robust, highly pandemic resilient. And yes, the growth here beyond 60% is, I think, dynamic. What -- I think what the good news here is this is not driven by single project business. This goes across all geographies here that we cover. The investment of the last 10 years into partnerships across Europe in selected countries in Asia but also our endeavor here to expand our Canadian and North American business beyond the oil and gas industry shows results. And if we look into the applications, the classical standard EFOY applications like wind, like security and surveillance equipment, off-grid camera systems, data transfer but also smart traffic, a big step forward here in Asia as well as new verticals like telecom, telecom backup and critical infrastructure. So a development that has not found or come to an end here with the calendar year. We are seeing same level of activity in the first couple of weeks of this year. And therefore, the positive assessment remains in place also for this year. We, at the end, see a continuously strong demand to replace incumbent technologies. And if you want to break it down to a very simple format here, internally, we have the tendency to do simplifying of messaging in here. What we call, this is the Goodbye Diesel initiative. We are replacing conventional generators for stationary on- and off-grid means, backup power but also off-grid, in a broad sense. This, I think, is the underlying backbone for the view on the business here not only for '21 but also when we then discuss the midterm outlook. We are a solid replacement of a well-working technology with the distinct advantage of being sustainable. We are clean, silent and efficient. And that's why, yes, we call this Goodbye Diesel. If we now go into the assessment of the outlook, the forecast 2021. Yes, we all know and we have still -- we have foreseen this in our private and business life that corona is not a topic of the past. We are still, let's say, in an environment where corona is still rampant, and the environment has not had the opportunity to fully recover. But what we have taken in terms of measures in 2020, we call this Fit for the Future, which with a comprehensive set of measures implemented as of April last year from natural cost reduction, some of it going by itself because we all could not travel anymore, but to measures of supply chain stabilization. Well, bringing some of the supply chain back to Europe but, moreover, simply having the ability of spending more money on purchasing goods helped us to continue with our operation. We had not a single day of downtime. We had no disruption in supply chain because we simply ordered double the amount of product that we needed to operate. We have done a similar thing early this year, again, for the first 6 to 9 months of the year. Naturally, this costs money. We see this naturally in our working capital and on the balance sheet, but we feel it's the right investment. It has helped us to have production running until Christmas with, say, no single day of interruption. And since restarting this year after stock accounting, we do the similar thing. So besides those measures in the Fit for the Future program, it was a clear focus to accelerate R&D. I mentioned that we launched the fifth generation of EFOY late last year, but what we, in parallel, did is kick off the development of the next generation of hydrogen products, which is the dominant R&D program this and next year. The prototypes on the electronics are on its way here from Holland to Germany, a good traction in the process. But we also started to evaluate complementary technologies, such as electrolyzers, how does this fit, in which way does this fit to our fuel cells, at the end, providing our customers finally with an on-site green hydrogen production for off-grid and backup power systems. These are programs that are in full implementation and will help us to really make good use of the positive environment. And so therefore, with, let's say, the realistic assessment of corona impact still being there, we feel confident enough to give the guidance that is also stated in our publication today. Revenues are up to a range from EUR 61 million to EUR 70 million and, in this context, also associated, an improvement of profitability on an underlying EBITDA level from EUR 3.5 million to EUR 6 million and the respective EBIT numbers from minus EUR 0.9 million to EUR 1.6 million plus. We are clear that this is naturally an assumption that does not include a severe setback in the fight against the pandemic, especially, again, lockdown and shutdown measures in different countries. But overall, if we see momentum in environment, we feel it's the right time to give this confidence message to the market. And naturally, this message is also a basis here for the larger, for the greater picture. We took the last couple of months to assess our 5-year planning. And well, if we read -- nowadays it's not so much newspapers, but if we read, what we can see here on any kind of electronic media, well, hydrogen and fuel cells are on top of the agenda and some of the numbers are very, very impressive and stunning. You have consulting firms like Roland Berger here. They provided a study to one of the provincial governments here in Germany, which is freely available, where they predict here, by 2030, companies to generate up to EUR 65 billion of revenue in Europe and about the similar size in the global market here with hydrogen and fuel cells, yes, by 2030 already. If you take numbers of, let's say, the Hydrogen Council where the assumption is that green hydrogen production needs to be increased by a factor of 10 until 2050 and if you then combine this with this extensive government programs, Germany, EUR 7 million, plus EUR 2 million in the EU. We are talking here about EUR 180 billion to EUR 470 billion by 2050, sometimes difficult also to keep all those huge numbers in a row here. We have revised and restated our planning, looking at the background here of the demand development. And so this accelerated growth plan that we are working on right now foresees further dynamic organic growth but also inorganic steps like acquisitions. And we intend to -- or the envisaged target number here for 2025 is the revenue range between EUR 350 million and EUR 400 million, again, with an increase of profitability here beyond at least 15% on EBITDA level. Besides the environment and besides, let's say, all those government projects here, I think, at the end, we are building or setting this on 4 elements. So one is an established product that is already out there as a sustainable energy source here that is replacing conventional technologies like diesel generators in different markets. We have talked -- and I mentioned it before, from industrial to public to private applications, we are talking about backup power but also off-grid power. We open up new verticals like telecommunication but also autonomous driving. Be it trains or cars, they will need a data infrastructure that is backed by a reliable backup power. And we cannot imagine that diesel generators will be the technology of choice. We are enabling here digitization. And so with an existing product offering that we have here as a fuel cell pioneer within the last 15 years, we have 50,000 fuel cells sold worldwide. We have more than 100 million operating hours recorded. So we have an unprecedented and unmatched industrial experience here combined with, let's say, the technological expertise. And so we have a first-mover advantage. We naturally have to make sure we can defend this and stay on top of it. So at an early stage of the market, we are one of the first companies -- and in some segments, definitely still the only one capable of providing industrially proven products -- and therefore, this is the basis for the organic growth in the existing markets, opening up new segments here organically. I've mentioned telecom here with our hydrogen product as the second pillar. The third pillar here of this growth path is, well, the regional expansion of the business. We have talked about this earlier today already. I think Asia, what we have now done with our partner in Japan, and we are intending to expand to other parts of Asia pretty soon, India being one of our strong home markets with a tremendous growth potential. So the regional expansion through collaboration and formally joint ventures, the third pillar. And the fourth one is definitely fitting M&A activities. Here, Europe as well as the U.S. are target areas where we are assessing targets, some of it already in an advanced stage. So with all of this together in a sequence, and some of it also in parallel that is simply a necessity of the environment, we cannot set our own priorities. We have to adapt to what the market now demands. But we feel that we are properly positioned here to benefit disproportionately from this high momentum in the market from this high demand here for hydrogen and methanol products. What is the plan going forward? We are now going to further detail the growth plan here. We will keep you all and the market updated on milestones. The next logical step besides, let's say, some projects being concluded and successfully ready for publication, naturally will be the March 25 publication of our annual report where further detailing of the process is to be expected. Overall, after being in this business now for approximately 15 years, I think I'm happy to report here about an environment that we, as a company, have not experienced before. I think we feel that some of the investments done over the last 10 years into products and market access starts to really pay off. And therefore, well, we can only invite you to still give us your or still cheap confidence with us. We will make sure we can justify your trust here by delivering on our plans. Thank you for your attention. I'm very happy to answer questions here together with my colleague, Daniel Saxena. Thank you very much.

[Operator Instructions] And we've received the first question. It is from Karsten Von Blumenthal of First Berlin Equity Research.

That is a very ambitious growth plan you formulated for 2025. And that is roughly, I think, more than 7x perhaps of 2020 sales. Could you figure out how much of that could be organic and how much could be by buying sales or other companies?

Absolutely. Karsten, thanks for being with us. Well, you know what, for quite some time and, I think, as an organization, we have, I'd say, proven not to be, I'd say, just overly aggressive in communication. So far, I think our focus has always been to try to deliver and then demonstrate results. So also putting together this plan, we did not change our overall attitude. Well, I can say at my age, it's also difficult to change the overall way of working. It is ambitious, yes. But at the same time, if we see what is happening now in the environment on the demand side, especially here for the hydrogen part of the business on the stationary side with all the investments, government but also private side, I think we can look at the split here. We are not just saying, well, now we are buying 10 companies, and this makes us a EUR 400 million operation. There is a strong underlying organic case here with a CAGR here somewhere between 20% and 25% just for the existing part of the business, further market penetration, regional rollout and also new segments. So more of the same new regions but also new segments. I mentioned telecom here as one example. The other part is, and I think that's a basic difference to some of those near M&A plans, the good, I'd say, 1/3 of this overall program here is expansion of current partnership. We see what we do here in Asia with Toyota, expanding this to other parts of Asia and engraving the business here together with an organization that is already established in these geographies requires significantly less investment. It is more, I'd say, a combination of organic growth here and some investment into, call it, potential joint venture structure. Similar thoughts here in India where we have a legal environment that requires local content. So if we don't come on the ground and own part of an operation there, we are simply excluded from some of those massive sustainability programs that Moody's has launched. And then the third one, and this is, I would say, below, say, EUR 100 million here is what we think acquisitive growth can add to such a plan. So it's not just where we are taking what we have and we buy what we don't have. It is organic growth further on the path we are on, partnerships to regionally expand and M&A.

All right. That is very helpful. Just one question regarding the below EUR 100 million acquisitive growth. At the moment, we have very high multiples in the sector. So all the companies out there are, most of the time, very, very highly priced. So don't you fear paying too much for anything out there that could be bought?

Well, if there's one good thing of being in the sector for quite some time, it's the good visibility also at targets and elements that are not yet listed and, therefore, maybe have different multiples on it. And just very practical, we have no intention to buy into electrolyze valuation. There is good products out there and we are good in product integration. So joining forces, for example, with somebody who has already electrolyzer product where we then integrate this with our EFOY JUPITER platform and then help this company to open up new market seems to us a more beneficial way forward than acquiring a stake of, I would say, 5% in a company that is pre-product and pre-revenue.

Yes. And that sounds to be the right plan. I agree on this. I would like to come back to the figures, which were basically as roughly as I expected. But if I go through the segments, what I see is that the engine of our growth last year in Clean Energy & Mobility was a bit weaker in Q4 than I expected whereas industry was very strong and Oil & Gas was okay. Defense was also quite good in Q4. But why was Clean Energy & Mobility relatively weak in Q4?

As you said, I think it's a luxury problem and a relative assessment to drop from 80% growth to 61% here from the 9-month figures. But there is no secret in this. It's just installation in November and December time frame here in the southern part of Germany for product was due to the harsh winter time not at the same pace it was, let's say, August, September time frame.

Okay. That means it's 2021, that means it's just a delay, but we can see a strong business then as soon as this very harsh winter indeed, I can tell you, goes away, which hopefully is this week.

No, we did ship the biggest parts, for example, of JUPITER products already now in February for March installation. And there was -- but this was not unexpected for us certainly because we knew they will slow down installation in the field.

All right. Looking into 2021, guidance you gave is in line with my forecast. But if I look into the businesses, it might happen that corona will stay longer and will be more nasty than we hope for because of the mutations and the vaccines may not work as good as they do for the original virus. Do you think this could again especially be a problem in the Defense & Security business because governments are then more than slow to order?

Well, I think if we go back to really hard lockdown situations, as we have experienced them in some of our international markets, naturally, this will have an impact. So on the lower end of the guidance, we would then have to compensate some of those delays here by civilian business which seems, at this point in time for us, doable and realistic. If, let's say, we see a total return to a COVID situation like we have experienced it in March, April and May time frame of last year, naturally then we will also have to look into the figures again. But also there, we have seen customer groups really adapt to the situation. If you see our industrial electronics business in Q4 and also in Q1, we feel the high adoption to a new normal. Well, oil and gas, relative stability of oil price and us moving also into non-oil and gas segments to compensate for this, well, we feel really pragmatically confident here with what we have out there. And naturally, you see it's a large range here, EUR 61 million to EUR 70 million that's naturally there. We tried to encompass some of the uncertainties associated with the COVID situation.

All right. One last question from my side. If I take the EUR 350 million in 2025 and you have to split this between methanol fuel cells and hydrogen fuel cells, so can you give us, beyond the electronics business, a rough idea where do you see the stronger growth and where do you see the main driver?

Yes. The main drivers here are definitely hydrogen products but still, let's say, above-average growth here with methanol, too. But this, I think, is somewhere between 2/3-1/3, 66-34 to even a 70-30 ratio for the hydrogen part. We should -- but what we should not forget in this context is that we are naturally talking about totally different unit prices, higher power systems fully integrated where 1 EFOY is EUR 5,000, and we are happy about this pricing and the margin associated with this. But an integrated JUPITER system here with 10-kilowatt -- or 5- to 10-kilowatt integrated system ranges between an EUR 80,000 and EUR 100,000. So that's why we also have a unit price effect in there.

The next question is from Anne Margaret Crow of Edison Group.

My first question you have partly answered anyway because I was very interested to hear that you were considering going into the electrolyzer market. But I wondered how long it would take you to develop products for that to catch up with incumbents, such as ITM. But from what you said in your previous answer, it sounds as though you are considering acquisition as the way of getting into the electrolyzer business. Am I correct in that assumption?

Well, thanks for helping us to clarify this point. I want to be really clear and specific here. We see good product out there already, different product concepts, and we are now assessing products that fit to the power levels or that fit to what we need as hydrogen consumption for our product. So we are talking here about the lower end in terms of production capacity of the electrolyzer market. And there are existing products out there. And our intention is to combine those existing products as part of an integrated system here with our fuel cells, with our power electronics, to have on-site green hydrogen production capability next to, call it, the cabinet with the fuel cells, the next cabinet is the electrolyzer and we are running it all with 1 electronic board. So therefore, we are, a, not intending to acquire and electrolyze the company, we are seeking collaboration here to open up new markets also for electrolyzer players. Simply selling an electrolyzer with every, whatever, fifth or every fourth EFOY JUPITER in the long run can be a good business also for such a company. And so we do not want to reinvent the wheel, and we also don't want to buy it.

Right. That's very much clearer. And then my second question is looking at production capacity. And to reach the revenue growth that you are planning for 2025 with your existing products or variants of those, enhancements of them and entry into new markets, do you have enough capacity? Or will you need to invest?

Well, I think two elements to this. First of all, here in Munich, we are still, let's say, running a production that is a 1-shift production. Looking at, let's say, the output here last year, about 3,500 units roughly, rough numbers. To expand this up to almost 20,000 units, we can do this in our setup here. And talking about the regional expansion, be it here in Asia and naturally then also in North America, I think part of the value chain, naturally, we will transfer to those geographies, getting core modules out of the German facility and then do the full integration, for instance, somewhere in Asia, we mentioned -- or I mentioned India because of the legal environment. So we will have production capacity but more so for final assembly and module assembly and not so much here on the stack level.

Right. That makes a lot of sense, particularly given the way in which the Indian government, in particular, likes companies to work. That's very helpful.