SMU S.A. (SMU) Earnings Call Transcript & Summary

Thank you for standing by. This is the conference operator. Welcome to the SMU Fourth Quarter 2020 Earnings Conference Call. [Operator Instructions] The conference is being recorded. [Operator Instructions] I would now like to turn the conference over to Carolyn McKenzie, Head of Investor Relations. Please go ahead.

Great. Thank you. Thank you all for joining us today. Sorry for the delay. I forgot how to use regular office equipment after so much working from home. So we're here now. I'm here with our CEO, Marcelo Gálvez; and our CFO, Arturo Silva. Today's presentation includes 2 sections. First, we're going to go over the results for the fourth quarter and full year 2020, and then we're going to talk a little bit about our outlook and our plans for the coming year and our strategic plan overall. Marcelo and Arturo will be happy to take any questions that you have at the end of the call. And of course, please feel free to contact me afterwards, if you have additional questions. If anyone isn't using the webcast to follow the slides, the presentation is available on our website, www.smu.cl, in the Financial Information section, and I also sent out the file to the distribution list this morning. An audio recording of this call will be available on our website later today. Also, please note that we may be making forward-looking statements today. So as always, please remember to take a look at the caution regarding forward-looking statements on Slide #2 of our presentation. On Slide #3, as promised, we have the agenda for this presentation. So we can move along to Slide #4, where we have revenue. Revenue for the full year grew 0.8% with respect to 2019. But in the fourth quarter, we had an increase of 6.9% as the top line recovery that we started to see in the third quarter accelerated. Full year revenue was heavily impacted by the early months of the pandemic, especially between April and July. And the restrictions that were imposed in Chile with quarantines, shelter-in-place orders and a limited number of permits to leave the house each week, naturally had a negative impact on traffic and frequency of purchases. These restrictions peaked in the month of June and July in terms of coverage. And then in August, restrictions began to be lifted in stages, and this continued in the following months and we saw traffic begin to recover almost immediately. The other impact to keep in mind when looking at the top line is that we had fewer stores operating in 2020 than in 2019 due to closures of stores that were damaged in the context of the social unrest that began in Chile in October 2019. Gross margin, as reported, was flat for the full year and fell 70 basis points in the fourth quarter. However, for both periods, there is a significant impact from the recognition of the business interruption insurance that we expect to recover following the OXXO vandalism in the context of the social unrest. This insurance is recognized as revenue, but it has no associated cost of goods sold. So it effectively has a gross margin of 100%, which makes the total gross margin higher than it otherwise would be. If we exclude this effect, gross margin for the full year actually would have expanded by 20 basis points. And for the fourth quarter, it would have grown 30 basis points. Therefore, we were able to make gains in gross margin despite the change in product mix due to pandemic-related customer preferences for more basic products. On Slide 5, we have a breakdown of revenue performance by format for the full year 2020 versus 2019. Although we did have a decrease in Unimarc, which, along with [ Mayorista 10 ], was particularly affected by COVID restrictions and the resulting lower traffic, our Alvi cash & carry format had consistent outstanding performance throughout the year with 12.5% revenue growth. Alvi's customer base is made up of largely mom-and-pops and other businesses. Over 80% of Alvi's revenue comes from the B2B segment. This format has been strengthening its value proposition, targeting its specific customer base and building up its operating capabilities from a logistics standpoint, leaving it in a strong position in 2020 when mom-and-pops experienced strong growth and Alvi was able to capture an outsized proportion of that growth. Mom-and-pops grew 19% during the year and Alvi's sales to mom-and-pops grew 26%, 7 percentage points higher than the market. E-Grocery revenue grew over 40% in the year as we saw more demand from customers who couldn't or didn't want to leave their homes to get groceries. And Peru, once again, contributed with 11.1% revenue growth in the year with strong performance in the B2C segment. On Slide 6, we have same-store sales, which corrects for the effect of the store closures and gives us clearer year-over-year comparisons. We have same-store sales growth of 4.0% for the full year, with the strongest performance coming from Alvi and OK Market, even as OK Market was hit particularly hard by restrictions on operating hours due to mandatory curfew. And in the fourth quarter, we had positive same-store sales growth across all formats for a total of 9.1%, including 7.7% in Unimarc, 12.9% in cash & carry and 27% in OK Market. On the right-hand side of the slide, we have a graph showing the evolution of quarterly same-store sales throughout the year. 2020 started out very strong, and then in the early months of the pandemic, with the significant drop-off in traffic, same-store sales was up. Things started to turn around in August and the recovery strengthened through the fourth quarter. On Slide 7, we have a graph to show exactly what happened with customer traffic and average ticket during 2020. In Chile, as I mentioned before, the government imposed very strict restrictions, naturally leading to a reduction in the number of transactions, which fell by more than half in the early months of the pandemic. The reduction in transactions was especially pronounced in centrally located stores. These are locations that historically performed very well because they were convenient and there was a lot of customer traffic. But when people started staying home, they temporarily lost a big part of their customer base. Centrally located stores account for around 30% of Unimarc stores and closer to 60% of [ Mayorista 10 ] stores, which is why that format was hit particularly hard. Residential locations performed better. The reduction in traffic was partially offset by higher average tickets. Customers were shopping less not only but buying more products when they did come into the store. And here, you can see that average ticket essentially doubled in the early months of the pandemic. When traffic started to recover in the second half, average ticket started to fall. We prefer a combination with higher transactions, even when it means lower average ticket. So this is good news for us. Given these changes in customer shopping habits, we made adjustments to our promotional activity, leveraging our loyalty programs, apps and personalized promotional activity. During the pandemic, we also extended our promotions, taking into account the fact that many people were no longer doing their grocery shopping on the weekend. These changes were well received by customers. Another change we saw in terms of customer performance -- sorry, customer preferences was in the types of purchases our customers were making, which we can see on Slide 8. Those of you who have been following SMU for a while will probably remember seeing a graph that shows a sustained increase in what we call fill-in purchases with a corresponding decrease in stock-up purchases. But last year, that trend moved in the opposite direction as customers shifted towards more basic product categories and also stocked up on certain essential products. In the graph here, we have a comparison of shopping missions that is fill-in or stock-up, in September to November 2019 versus 2020. And you can see that while stock-up only accounted for 40% of purchases in 2019, it was over 50% in 2020. Accordingly, we made adjustments to our product assortments, increasing high demand category. We also made changes to the types of promotions we ran in order to target the products our customers were preferring under these different circumstances. As I mentioned before, this change in product mix did not negatively impact gross margins. Moving on to Slide 9, we have operating expenses for the full year and the fourth quarter. Before I go into that explanation, just as a reminder, to explain the different colors on these graphs. Last year, we had -- or about 2019, we had the application of IFRS 16, making historical figures not comparable to 2019 and 2020 figures. We've left the historical figures and also pro forma IAS 17 2019 numbers as well as the IFRS 16 2019 numbers. So you can see how much of the difference can be attributed to the change in accounting rules. As we have explained in the last 2 quarters, extraordinary COVID-related expenses had a significant impact, especially in the second quarter. So at the top of the slide, we included OpEx as reported. And at the bottom, we've excluded these additional expenses, which were directly related to COVID, such as personnel expenses, sanitization services, personal protective equipment and other materials. These expenses amounted to CLP 9.3 billion in the full year and CLP 1.9 billion in the fourth quarter. Including these expenses, OpEx increased 4% in the full year and 3% in the fourth quarter. However, excluding these expenses, OpEx increased only 2.1% in the full year and 1.5% in the fourth quarter as we have kept other operating expenses under control through efficiency and productivity initiatives. Although we faced these extra COVID-related expenses for most of the year, we were able to achieve significant optimization over time, as you can see on the next slide. During the second quarter, when these expenses were at their highest, we were reacting to the crisis and did not yet have a clear supply chain in place for the different products and services that we needed in order to continue to operate safely. As the months have gone by, more suppliers have become available to us. And we have also been able to plan better, which has resulted in a significant optimization, where expenses were cut in half in the third quarter. And in the fourth quarter, we were able to save an additional 13%. It's very important to mention here that we have achieved these savings while remaining in strict compliance with all public health protocols. The health and safety of our employees, contractors and customers is our #1 priority. On Slide 11, we have a few indicators that are related to operating efficiency. Our rate of centralized distribution increased from 47.7% in 2019 to 54.7% in 2020, which is a significant increase that partly reflects the change in product mix during the pandemic, with more demand for basic products that tend to be distributed through our network. Our logistics department was able to handle the spike in demand as we have been building up our capacity over time in order to cement better inventory management and by extension improved in-store product availability. Sales per full-time equivalent, which we look at to measure productivity, have been consistently increasing over the last several periods. And in 2020, we had an increase of 6.1% with respect to 2019. On Slide 12, we have EBITDA, where we have used the same structure for the slide that we used for operating expenses. At the top of the slide, we have EBITDA as reported, including COVID expenses. And at the bottom, we have excluded COVID expenses. EBITDA for the full year decreased 6.3%, but excluding COVID expenses, the decrease would have been only 1.6%. And in the fourth quarter, we had EBITDA growth of 7.3%, further demonstrating the recovery in the second half of the year. And excluding COVID expenses, EBITDA would have increased 10.7%. The EBITDA margin for the fourth quarter improved 10 basis points to 9.6%. And excluding the extraordinary expenses, we would have seen an improvement of 40 basis points, reaching 9.9% for the quarter. On Slide 13, we have net income, which fell 13.8% in the full year, essentially due to the net loss we had in the second quarter. So we had a solid recovery in both the third and the fourth quarters, as you can see in the graph on the right-hand side of the slide. Net income for the fourth quarter grew 92% year-over-year. On Slide 14, we have our bond covenants. For everything is in order, we have plenty of flexibility in terms of meeting these restrictions. And in fact, both ratios are at least as solid as they were one year ago. On Slide 15, we have an updated maturity profile, which includes the Series AL bonds that we placed in December for UF 3 million. Those funds will be used to pay the Series G and K bonds, which mature next week. On the graph, we've included those bonds with a dotted line since we ended the year with cash on our balance sheet to cover that payment. The rest of the debt for this year is essentially revolving short-term bank debt. And following the placement of the bond in December, we have a comfortable amortization schedule for the coming years. So that's it for the earnings portion of our presentation. Now we can move on to Part 2, what are our plans for this year. Before we get into what we are planning to do, on Slide 17, we wanted to talk for a minute about why we are doing it and why we think we are positioned to make it happen. Our corporate vision at SMU is to be the food retailer that best understands our customers and meets their needs. In order to achieve that, we want to leverage our multi-format strategy. We have formats that cater to B2C customers across the socioeconomic spectrum and across different purchase occasions as well as cash & carry formats that cater to B2B. Our customers are at the center of our business and every decision we make and understanding their needs is a fundamental part of our strategy. Thanks to our loyalty programs and our large customer base, we had over 10 million unique identified customers over age 18 during 2020. We have deep insight into their grocery shopping preferences. We are also located close to our customers. We have stores located in 161 municipalities throughout Chile, which covers over 80% of the population, over 15 million people. As a leading player in the Chilean food retail industry, #3 of our revenue with a market share of 18.3% in 2020, we have scale to be competitive. And of course, with our focus on food retail, with less than 3% of our revenue coming from non-food, we are in an extremely defensive industry. Moving on to Slide 18. Most of you, I believe, are familiar with our strategic plan for the 2020 to 2022 period. We launched this plan in November of 2019 and naturally not everything went as planned last year. So we thought it would be helpful to provide an overview of where we stand on these different pillars and initiatives. The plan has 5 key pillars: organic growth, customer experience, efficiency and productivity, organizational excellence and sustainability. We have a slide to cover each of these. And of course, in order to achieve our goals in these different areas, we need financial capacity, technology and digitalization and logistics development. So those are the base of the pillars as the support for this plan. On Slide 19, under organic growth, we have initiatives that include new store openings, upgrades of existing stores as well as development of our e-grocery business, all of which are part of our omnichannel strategy. We have a machine learning model that helps us to perform site analysis to identify potential new store locations, which, combined with our deep customer knowledge and our multi-format strategy, gives us both precision and flexibility in terms of selecting the appropriate value proposition and format for each location. Our existing broad geographic coverage of Chile with our operating platform and distribution network facilitates the operation of new locations. Although we were not able to make much progress on store openings in 2020, we did open 6 OK Market stores, but we had to push back openings of a larger format due to pandemic-related restrictions that made construction work difficult. We are maintaining the original plan in terms of number of stores. But instead of opening between 2020 and '22, this will now happen between 2021 and 2023. For this period, we're planning to open 15 new Unimarc locations. And in fact, we opened the first one last week in the north of Chile. 100% of these locations have signed lease contracts already, and we have a further pipeline of signed contracts for future growth going forward. For Alvi, we have 6 openings planned for this period and 100% of those locations are secured with signed contracts as well. For OK Market, we are planning to have 10 new stores per year, and we have signed contracts for more than half of the 30 stores we're planning to open during this period. So far this year, we have already opened 2 stores. Some of you might be thinking, but aren't you guys selling OK Market? Why are you opening stores? Yes, we are in the process of selling OK Market. But while we wait for regulatory approval of the transaction, neither we nor the buyer wants us to just put up our feet and relax, so we are continuing to grow this format and the investments we make during this time will be adjusted in the final transaction price. And last but not least, we are also growing with new stores in Peru. In fact, we opened the first one last week. In Peru, we are growing through our Maxi Ahorro format, which is a low-cost format, primarily focused on B2C customers. Maxi Ahorro has been the main driver of EBITDA growth in Peru in recent years. With respect to store upgrades, this is an initiative that we made a lot of progress on between 2017 and 2018. And then in 2019, we were interrupted by the social unrest here. The plan remains in place. We see an opportunity to improve the value propositions at a number of our stores based on customer needs and preferences. Just like the store openings, we had delays last year related to pandemic restrictions, but we did manage to upgrade 14 stores. And once conditions are in place, we are ready to move forward with this initiative. And our plan is to do 30 Unimarc or Alvi stores per year. E-commerce is, of course, an area of great interest. As we mentioned earlier in the presentation, the pandemic resulted in a significant acceleration of e-grocery penetration. So what are we doing in this segment? First, it is important to understand what customers are looking for and how they shop. About 75% of online grocery purchases are planned shop and 25% are express shops. Customers care about receiving their orders on time and in full. They don't like substitution. They also care about the user experience, and they value personalization. It is also important to understand what we need from a business standpoint because the cost structure in this format is different from a brick-and-mortar grocery stores. Based on these different factors, our strategy involves the combination of operating our own e-grocery platform and partnering with last milers. In our platforms, we want to be able to satisfy those 75% of planned shops, making sure we provide a complete and on-time order. We want to integrate our loyalty programs and personalized promotions because those are important for our customers and also for our omnichannel strategy. Right now, we are operating unimarc.cl in a customer testing pilot stage, where we can track areas that need improvement. In order for this platform to be profitable, an important component of our operating model is a logistics asset. We are developing a micro fulfillment center that will allow us to achieve high levels of automatization in the picking process, optimizing costs and ensuring orders arrive on time and in full. We will continue to partner with last milers in order to cover purchase -- express purchases. We are currently working with Cornershop and Rappi. Following the announcement a few weeks ago by Walmart and [indiscernible], we received a number of questions. So we think it's important to clarify that their agreement is very much in line with what we are currently doing and have been doing for a few years now with last milers. Moving on to customer experience. On Slide 20, as I've said a few times now, understanding our customers is key. We have over 10 million identified unique customers that account for 97% of our sales. Having deep insight into our customers is the only way to truly meet their needs. By using advanced analytics through machine learning models and big data, we are able to do this more effectively. For the first couple of years, we've been partnering with Dunnhumby, who world-renowned experts in customer data clients. Our work with them as well as our internal development has allowed us to really build up our loyalty programs and our personalized promotional activities, which has been very well received by customers. During the past year, we've integrated our Club Ahorro loyalty program used to be only for Unimarc across [ Mayorista 10 ] and OK Market as well as our online platform. As I mentioned before, this is part of our omnichannel strategy as well as an important part of the customer experience. Last year, we also launched the app for Club Alvi. So our B2B customers also have access to personalized promotional activity and other useful information right on their phone. We also see opportunities to improve our value proposition by growing our private label and fresh food offering. On private label, we are partnering with Daymon, a world leader in private label development. In 2020, we achieved significant growth in private label products, both in terms of revenue, which increased over 20%, but also in the number of products, which almost doubled with respect to 2019. We added new products in close to 50 different categories. We're also working to improve our fresh food offerings with a special focus on the produce, butcher and bakery sections. We are implementing a world-class demand and replenishment planner for fresh food based on artificial intelligence. And specifically for food, we are implementing purchase programs and supplier development initiatives. Through these different projects, we aim to ensure product availability and assortment. Our next pillar is efficiency and productivity on Slide 21. Our existing operating platform is based on a distribution network that supports our broad geographic coverage as well as an IT platform with an ERP that includes SAP, automatic store replenishment and geocom for checkout. This existing platform facilitates the adoption of new technology. The initiatives in our productivity and efficiency pillar aim to improve product availability and the checkout experience for our customers, while also controlling operating expenses. Here, we have 2 groups of initiatives. The first, redesigning in-store processes include supply chain, getting the products to the shelf as efficiently as possible. Centralized distribution is part of this. And as we saw earlier in the presentation, we have been making progress here, but there's room for more as this is an excellent way to improve inventory management. We also have different initiatives relating to the way products are displayed in the store and restocked. The checkout process is an important part of the customer experience. Here, we are implementing a workforce management system to optimize staffing in this area, and we are also continuing to add more self-checkouts. We are also digitalizing in-store tasks with technology that makes it easier to supervise different tasks, in some cases, making it unnecessary to actually be at the store. The other part of this pillar is logistics optimization, where we are growing our network, optimizing freight costs through a transportation management system and optimizing picking processes with voice picking and other technology. On Slide 22, we have our next pillar, which is organizational excellence, clearly extremely important in the company of this size. We need to have alignment throughout the organization in order to implement our strategy and fulfill our corporate purpose of making our customers' lives easier. The basis of that alignment is achieved through our corporate culture and values. CERCA, which means Closed in Spanish stands for these values, closeness, excellence, respect, collaboration and agility. Internally, we have many initiatives that are designed to help consolidate this culture and these values, such as a recognition program called Bravo, where employees can use an online platform to congratulate one another for showing CERCA values in their work. Perhaps surprisingly, during the pandemic, we were still able to promote this culture. And since many of the activities, such as bringing in featured speakers, went online this year, we were able to achieve a massive increase in the number of participants in this event. We also carry out an employee engagement surveys, which provide invaluable feedback on where as a company we have gaps, and we have worked to make changes to address those gaps. Similarly, we have leadership development programs at different levels of the company, focused on professional development for employees with outstanding performance evaluations. As an example, in 2020, we launched the Develop Your Career program. Another component of organizational excellence is attracting and developing digital talent to support our strategy. We are building up our in-house talent, and we have a growing number of agile cells operating internally in support of our digital business initiatives. The sixth pillar of our plan, as described on Slide 23, is sustainability. Under our previous 3-year plan, we laid the groundwork for a culture of sustainability within the company with more awareness and transparency as well as improvements in reporting practices. As a leading food retailer, we have an opportunity to create a positive impact on a truly significant number of stakeholders. In addition to our wonderful investors, we have customers, employees, suppliers and neighboring communities. And by effectively managing our economic, social and environmental performance, we can have a real impact. Under sustainability, our initiatives are focused on creating shared value, caring for the environment and governance. Developing local suppliers is a key area of focus. We have had our cent percent Nuestro program in place for several years now, which focuses on developing small and medium local suppliers. We also mentioned the growth in private label last year, over half of our private label suppliers are local. With over 500 stores in Chile, we play an important part in communities all over the country. To that end, last year, we developed a good neighbor policy, which outlines our areas of focus within the framework of our corporate culture and value. We also partner with nonprofit foundations and organizations in order to have a greater impact. One of the highlights of 2020 was a campaign that we designed to help people who have been severely affected by the economic consequences of the pandemic. The campaign was called [indiscernible], which translates to, we will get through this together. Between July and September, we invited customers and neighboring communities to participate in this initiative, and we contributed an additional 10%. As a result, we were able to help 143 organizations, 89% of which are based outside of the Santiago Metropolitan region with a total donation of CLP 186 million. With respect to the environment, in 2020, we also developed an environmental management policy. Another strategic initiative is the reduction of food waste, and we are also working to manage our carbon footprint. 2020 was the second year we received certification under Huella Chile program, and we are working to increase the number of stores and distribution centers that we include in the measurement. And of course, this information will give us the input we need to manage our carbon footprint more effectively in the future. Governance is a central part of our sustainable development. Our solid corporate governance structure includes specialized board committees, including a sustainability committee. During the past year, in addition to the good neighbor policy and environmental management policy, we also developed a human rights policy and a supplier code of conduct as we seek to incorporate sustainable best practices across the organization. With respect to the key supports for our strategic plan, we talked about our financial position at the beginning of the presentation, and there are a number of logistics-related initiatives that we have discussed. On Slide 22, we have -- sorry, Slide 24, we have an overview of what we are doing in terms of technology and digitalization, which play a key role in all pillars of this plan. We have an ongoing focus on growing technological capabilities and implementing the latest technology to serve our customers and optimize our operations. This slide provides a summary of the main initiatives, many of which we have already discussed, but they can broadly be grouped into digitalization, which is clearly relevant as a data-driven company with e-commerce and loyalty programs, in-store processes and digital talent. We also have technological renovation. I mentioned our IT platform, including SAP. And we are now adding omnichannel functionality to SAP with a warehouse management system as well as SuccessFactors for talent management and Ariba for supply chain. I also mentioned that we have the automatic store replenishment system, but we are incorporating cutting-edge technology for fresh products as well. And of course, information security is a very high priority, where we take a proactive approach to safeguarding information using international best practices. Our investment plan for 2021 on Slide 25 is focused on strategic growth and efficiency initiatives, including CapEx and OpEx. The total plan is for CLP 70 billion, which is broken down into growth CapEx, efficiency CapEx and OpEx. Our plan is to invest CLP 34 billion in growth projects, such as store openings, store remodels, e-commerce, including the customer interface as well as operating analytics model and our distribution network. We also have a number of efficiency initiatives, as we have described today, including technological renovation and improving the checkout experience, among others, and those amount to CLP 26 billion. We also have operating expenditures of CLP 10 billion that while they are related to strategic initiatives, they do not qualify as capital expenditures under our criteria. Examples here are the use of planograms as part of our assortment optimization and store layout, as well as projects related to private label development, such as new product launches. Out of this total of CLP 70 billion, over 1/3 are investments related to technology, digitalization and logistics, in line with what we have discussed on the previous slide. That's it for our presentation. Thank you very much for listening. If there are any questions, Marcelo and Arturo will be happy to take them now.

[Operator Instructions] The first question comes from Alonso Aramburú with BTG.

I have 2 questions related to each other. The first one, you mentioned the change in shopping habits moving from fill-in to stock-up. Are you seeing any return of more fill-in purchases now as mobility restrictions are eased? And related to that, generally, I mean, what are your expectations of same-store sales for this year? Do you think -- I mean, some of the comps are ready in the second quarter and the third quarter. So roughly, what are you expecting in terms of same-store sales growth for this year?

Alonso, in this year in January, we see this very similar to the fourth quarter 2020. However, in the month of February and so far in March, the mobility restrictions increased affecting transactions reaching level of minus 42%. That is mitigated by the adjustment of our value proposition and promotional activities. But it's important to remember that in Q2 in 2020, we had transaction drops of 55%. Therefore, the impact of the similar restriction is not the same because we have a better condition to confront this type of restriction with our adjustment in our value position and promotional activities. Also, it's important to know that in Q1 2020, performance was exceptionally high due to having one more day in February and pre-quarantine supply purchases in March. Remember that in the first quarter last year, the same-store sale was close to 10%. So the comparison base is very demanding, especially for the months of February and March. But anyway, we are expecting that with the machine -- more massive population, the restriction mobility will be lower in the second half of the year and probably the -- no doubt that it's clear that the effect in our sales is very positive because the transaction increased and it's possible to have a regular promotional plan with good results for the [indiscernible] especially. In the case of Alvi, in the first quarter, the performance has been very good and similar with 2020. We're expecting the full year in this condition for this format. Anyways, our gross margin in -- we have maintained a very good performance in the first quarter with any effect for this restriction associated with the pandemic. And we continue in the very, very efficient -- performing in operating expenses, which we estimate will allow us to offset the lower growth in revenues for the pandemia and thus maintain a good level of EBITDA margin for the full year.

Great. So do you have an expectation of same-store sales for this year that you can share with us?

It's very difficult to estimate the same-store sale. We're expecting -- if the restriction decreased in the second quarter should be similar with the first -- the Q4 2020, and the second half would be better. But in the first quarter, it will be difficult to keep this level of same-store sales for the restriction and also for the comparison basis is very, very demanding.

[Operator Instructions] We currently have no questions on the phone lines. This concludes the question-and-answer session. I would like to turn the conference back over to Carolyn McKenzie for any closing remarks.

Thanks very much for joining us today, everybody. Have a great day, and we hope you'll join us next quarter. Bye-bye.

This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.