Sphera Franchise Group S.A. (SFG) Earnings Call Transcript & Summary

Good afternoon, and welcome to Sphera Franchise Group's 2022 Preliminary Results Call. My name is Zuzanna Kurek, and I'm Investor Relations Officer at Sphera Franchise Group. Today morning, we published our preliminary 2022 results, which you can find on our website, in Investor Relations section as well as on Bucharest Stock Exchange's website under our investment profile. Thank you for joining our call to discuss our preliminary performance recorded last year. Before we begin, I would like to mention that this call is being recorded, and the recording will be updated on our website by tomorrow the latest. As stated in the call invite, by joining the video conference, you automatically and implicitly consented to being recorded. If you do not consent to being recorded, please leave the call. In terms of organizational aspects, we will follow our standard call setup, which means the management will first deliver a presentation outlining the 2022 preliminary results, and later, we'll have a Q&A session. Please note that all of the participants are put on mute. If you would like to ask a question, please type it in the chat box. Feel free to do it during the call, and we will answer all the questions in chronological order as soon as the presentation of the management is over. Last but not least, I would like to mention that we might be making forward-looking statements today during this call regarding the future performance of Sphera Franchise Group and that actual results may differ materially. We encourage you to review the disclaimer that we have included in the presentation, which you can now see on the screen and which is also available on our website in the Investor Relations section as well as the presentation is also updated on Bucharest Stock Exchange's website together with the financial results. This disclaimer applies equally to all the statements made in today's call. Let's kick off the call, I would like to introduce the management that is here with me today and will present our 2022 preliminary results. I am joined today by Calin Ionescu, Chief Executive Officer; Valentin Budes, Chief Financial Officer; as well as Monica Eftimie, Chief Marketing Officer. I will now pass the floor to our CEO, Mr. Calin Ionescu, who will share some insight about our preliminary performance in 2022. Calin?

Thank you, Zuzanna. Together my colleagues will present today the results of 2022, a very difficult year. Therefore, we are even more pleased that we come today [ towards ] with good results. So we talk about the highly core during the history of Sphera in terms of sales while achieving a healthy profitability. We have managed to offset the weak start of 2022 and overcome challenge after challenge through the year. The main issue we had start of last year was the abrupt increase in cost of inputs. Significant price increases sometimes surprising 50% were registered for core raw materials such as chicken meat, shortening, flour, mozzarella, vegetables. But let's see shortly what we did. We started revising our contract and initiated strong negotiations with the suppliers. We streamlined our offering while ensuring our high-quality standards are not impacted. We are happy to say that due to our actions, coupled with the temporary trend in the market in general, the weight of the cost of results in net sales decreased in the second part of the year by 2.2 percentage points compared to the peak registered in the first half of the year. The price increases in the raw materials were further amplified by the volatility in the energy market with multiple changes in the legislation, which in the end translated into massive price increase for electricity and gas, but more for electricity from our point of view. Again, we have entered negotiations for lower rent rates. And at the same time, we have released our flow and process to reduce energy consumption. The inflationary pressures affected our customers as well, driving them to pay more and more attention to value for money spending. We have therefore adopted our marketing strategy to continue to meet their needs. Another major challenging was the labor market, which remained extremely tight, putting pressure on both requirement and retention. We had to adjust and our payroll costs grew by 17% year-on-year in the last quarter of the year in Q4, following the wage increases and higher performance incentives. However, the results are already visible. Productivity increased, the weight of this cost in relation to sales decreasing from 23.4% in Q4 2021 to 20.2% in Q4 2022. Last but not least, the entire macroeconomic and geopolitical context was marked by uncertainty, which we managed to navigate leveraging our almost 30 years experience. We had efficient cost management at multiple levels, a strong marketing strategy, which delivered a sustainable developed strategy, making the hard decision when needed, such as closing the Pizza Hut restaurant in 2022 and 2 KFC Italy this year. But the results speak for themselves. The consolidated sales reached RON 1.3 billion a day, the highest in the Sphera's history, while the net profit stands at RON 44.3 million. We have registered double-digit growth for all brands on all markets. These achievements are the result of an excellent second half of the year and particularly the last quarter. The quarter 4 continued the series of the record high quarters in terms of sales and its performance offset the weak results in the first quarter of 2021. It is the best quarter in the history of the group also in terms of EBITDA normalized, which reached RON 44.4 million, which represents 243% year-on-year growth. This is due to growing customer presence in the stores, leading to an increasing transaction overall together with the price adjustment and efficient cost management. As a result, all brand brands on all markets registered restaurant operating profit in the last quarter of the year was validating the group's development strategy. We have also continued to leverage our own channels, which are more profitable than third parties. The rate of sales generating store and through the group's home delivery channels, reaching 84% of the revenues in the last quarter of the year versus 74% in the fourth quarter of 2021. We are continuing to make improvements across several areas and [ in-depth ] results will be presented by Sphera's CFO, Valentin Budes. Therefore, I will let him get into the financial details. Vale, the floor is yours.

Thank you very much, Calin, and good afternoon, everyone. I can vividly recall our previous meeting for the 2021 preliminary results, which took place precisely 1 year ago. Unfortunately, at that time, we are just beginning to grapple with the challenges of a complex recipe, navigating the recovery from the pandemic, while still operating under restrictions of border conflict, deeper inflation and an unpredictable macroeconomic environment. As we all remember, the first 2 quarter presented considerable headwinds, which we could have easily attributed to the aforementioned challenges. However, instead of making excuses, we doubled down our strategy and maintain our belief in the resilience of our fantastic business, our incredible teams and the skills we have acquired over the years. We remain persistent in our conviction that our hard work would eventually pay off and it were proved right once again. Therefore, we are delighted with our fourth quarter results, results that continue to demonstrate our ability to adapt to changing market conditions and drive long-term sustainable robust growth. Our financial performance has been exceptional, Q4 2022 being the best quarter in the group's history in both terms of EBITDA and sales. I'm even more encouraged by this achievement given that it was supported by both same-store and new store performance across all countries in which we are present. We have achieved a sustained improvement in EBITDA margin despite inflationary pressure and ForEx volatility. This quarter being the second consecutive quarter with double-digit EBITDA margin at our group level. Restaurant operating profit was almost tripled in this quarter compared with last year. We have also delivered outstanding results in Italy, where we continue to leverage the strength of our iconic brand. During the last semester in Italy, we achieved positive EBITDA every single month. This brings our full year normalized EBITDA to RON 3.7 million, representing a successful revalidation of the breakeven point we reached in 2019. In Q4 2022, we achieved the highest EBITDA margin since our opening in Italy with a double-digit margin of approximately 12%. This impressive result is a true demonstration of the success of our business model in this market. Let us now turn our attention to Romania, where Taco Bell recorded a significant increase in EBITDA compared with the previous year with a remarkable growth rate of 171%. Q4 2022 was our best quarter in terms of both sales and EBITDA, underscoring our commitment to creating value for our shareholders. Overall, the consolidated net profit for the fourth quarter, it's a testament to the strength and the effectiveness of our overall strategy, demonstrating the resilience of our business in the face of challenges. We have increased our profit margin by 8 percentage points compared to the previous year, reaching RON 28.7 million and setting a clear trajectory for the future. Now let's review our P&L structure line by line, as we usually do. On the revenue side, our full year sales increased by an impressive 32%, reaching RON 322.5 million driven by a robust increase in transactions. As I just mentioned, Q4 was the best quarter in our group history with sales reaching RON 37 million, an increase of 36% versus the comparable period. This growth was fueled by same-store sales increase of 32%, resulting from a combined effect of higher transactions and pricing. Moreover, Q4 marked the seventh consecutive quarter in which both same-store sales and transactions increased year-over-year. The continuous growth in transaction volume has consistently contributed to our robust and restrained evolution. Essentially, since the onset of the pandemic, we have remained laser focused on building a strong foundation that has enabled us to achieve a double-digit margin of 10.72% and delivered an impressive Q4 EBITDA of RON 37.4 million. Moving on to the cost of goods sold for 2022. We note that it represents an increased weight in sales of 1.8 percentage points compared to the previous year, reaching 34.6%. This increase is exclusively due to the inflation in the raw material cost. And if we are analyzing the inflation pattern in 2022, the main outlier was food prices, which rose by around 30%, 40%. However, we were able to partially mitigate the increase in the chicken area during the second half of the year, where a partial recovery of the price difference was achieved. After the authorities issued an ordinance in the fall to stabilize the price of energy, suppliers were able to reduce the price component that accounted for this uncertainty and negotiate the selling price closer to the actual cost of production. We expect the group for the Q1 2023 to be in line with the figures observed in Q4 2022 without any significant increases. If we focus only on Q4, we can see that the net sales weight decreased by 0.7 percentage points compared to the previous quarter, reaching 33.1%. Additionally, in the second semester that we can see a reduction of 2.4 percentage points in the weight of food and material cost in sales compared with the first semester dropping from 35.9% in H1 to 33.5% in H2. We will now move to analyze payroll expenses. We continue to invest in our employees who are the driving force behind our success. Our personnel cost is a reflection of our commitment to build a strong talented team that can help us achieve our strategic objectives. In 2022, the overall payroll cost increased by 27.1%, but we recorded greater productivity as the weighting revenue was 21.7%, which is 0.9 percentage points lower than the similar period of the previous year. If we exclude the effect of the said reimbursement technical unemployment, which was immaterial for 2022, the efficiency gain becomes even more obvious at 1.2 percentage points versus previous year, i.e., 21.7% versus 22.9%. The weight of Q4 2022 in the overall period is 20.2%, which is 3.2 percentage points lower than the last year. Going forward to the restaurant expenses, our rent costs in 2022 amounted for RON 95 million, representing 7.2% of sales. It's important to note that we received rent discounts of RON 3.8 million last year, which had an impact on our figures. If we adjust for this amount, we see a decrease in the weight of rental expenses as a percentage of sales of 0.5 percentage points for the full year and a decrease of 0.2 percentage points for the Q4 compared to the same period of last year. This decrease in the weight of our rental expenses as a percentage of sales reflects the variable structure of our rent contracts in line with the changes in the sales volume. The next cost line is the advertising expenses. We believe that advertising is a critical investment in our business, and we'll continue to allocate resources to this area to support our growth and success. In 2022, the investment in marketing was RON 67 million, representing 5.1% of sales, also in line with our commitment. That said, we reached the other operating cost line with an expenditure of RON 185 million for 2022, representing 14% of sales with a decrease of 0.2 percentage points versus similar period of last year. The main 2 cost lines here are as usual utilities and aggregator commissions. There was a significant increase in utilities expenses by RON 18.6 million in 2022, primarily driven by 75% surge in energy cost compared with the 2021 full year due to the increase in the unit cost. However, the energy cost hike was somewhat mitigated in Q4, leading to a decline of 26.7% in energy cost as compared to the previous quarter. The other main component is represented by aggregator commissions that increased by 4.4 percentage points versus similar period of previous year. However, despite the increase, the proportion of aggregator costs in net sales decreased by 1 percentage points from 4.7% to 3.7%. In Q4, aggregator costs decreased by 7.7% compared to the similar period of last year and the proportion in sales decreased by 1.6 percentage points from 4.9% to 3.3%. When we exclude aggregators and energy costs, the weight of other operating expenses in sales is consistent with the previous year. There was an increase in depreciation of RON 8.7 million, which can be attributed to 2 factors. Firstly, network development of new units had an impact of RON 4.1 million. And secondly, there were one-off provisions related to the closure of unprofitable location amounting to RON 4.7 million due to the closure of 2 KFC stores in Italy at the beginning of 2023 and the planned closure of 3 more Pizza Hut delivery location during 2023. G&A recorded a decrease of their share in the consolidated sales with 0.8 percentage points from 4.7% in 2021 to 3.9% for the current year. Regarding finance costs, there is an increase of 59%, reaching RON 13.3 million due to the growing cost of financing since the beginning of 2022, and some negative FX evolution as well. Looking to balance sheet. I'm also happy to see our strong cash flow position, providing us with the resources to invest in our business and pursue new opportunities. Solid growth in free cash flow generation, supporting group's liquidity has been achieved, reaching RON 128 million at the end of December. In 2022, we have a disciplined capital spending as we continuously invest in our network by opening new stores, remodeling the existing one and focus also on digitalization. Regarding our bank covenants, we are in a safe position as our ratio of net debt to EBITDA was only 0.7, which is well below our current bank covenant of 2.5. Our ability to consistently deliver strong financial performance and create value for our shareholders in the future, it's a source of great confidence for us. This is exemplified by the significant increase in our normalized earnings per share, which rose by 71% compared to the previous year. We remain committed to pursuing our strategic objectives and leveraging our strength to drive sustained growth and profitability in the years ahead. On the next slide, we have presented a overview of revenues, expenses and EBITDA. Throughout our efforts to optimize operations and manage costs, we have successfully improved our profitability. Our top line and bottom line numbers have shown impressive growth with Q4 '22, marking our best quarter to date in terms of both revenue and EBITDA, as already mentioned by me and Calin. The following slides, as usual, display our market and brand share. Romania remains our main market with a share of 86%, while Italy secured a market share of almost 13% despite a slow start of the year marked by lockdown measures there. In terms of brands, KFC brought in revenues, RON 1,130 million, accounting for a share of almost 86%. Pizza Hut generated revenue of RON 123 million with 9.3% share, while Taco Bell, RON 70 million, representing 5.2 percentage share. The following slide is the usual update on COVID restriction and staff information, which remains unchanged since the beginning of the year. Probably this is the last time we'll have such a topic part of our deck. As we progress to the next slide, we can see the evolution in the plan for our development. At the end of 2022, we are operating 177 restaurants, 155 in Romania, 20 in Italy and 2 in Moldova. We had opened 8 new restaurants for KFC to Pizza Hut and to Tacos. In January 2023, as I mentioned earlier in the depreciation [ provision ] we had closed 2 location in Italy, the KFC Verona Corso Milano and the KFC Torino Moncalieri. Starting from 1st of January 2023, if we're speaking about the fiscality, the specific tax for HoReCa is no longer available and has been replaced by the profit tax or the tax on micro company income. The companies have the option to switch to one of these new tax schemes until 31st of March. But due to the lack of issued application norms, uncertainties remain regarding the implementation of these changes. Because the law was enacted at the end of the reporting period, we have registered the deferred tax impact in accordance with IAS 12 income tax. Specifically, we booked a deferred tax liability of almost RON 1 million in Taco Bell and RON 0.7 million in Pizza Hut. Before giving the floor to Monica, we have the info related to the capital markets. Emphasizing the evolution of our share price versus the benchmark and the reminder of the dividend approval at the end of December with the next date as of 10th of March, and the payment date as of 31st of March this year. And now I will turn it over to Monica.

Thank you, Vale. Good afternoon, everybody. Sphera's fourth quarter and full year results demonstrate the power of our iconic brands that stayed relevant [ eating ] distinctive throughout the year with the help of a well-balanced marketing calendar. As Vale already mentioned, we finished the year on a high note with restaurant sales growth of 36% in Q4, which translates to revenues of RON 369.2 million, which is obviously another record for Sphera. This impressive performance despite a challenging environment, is a reassurance that good days are ahead of us. And in the next few minutes, I will share the most important marketing initiatives launched in the last quarter of 2022. And I will start by highlighting the fact that we increased prices again in December for the 3 brands in order to protect the bottom line and absorb the increased cost of inputs. And now starting with our red brand, KFC. In Q4, we built on the winter campaign, the almost-Christmas meal, which has been relaunched this year after the success it had last year. And we launched a special bucket with the aim of strengthening sales and boosting transaction levels. And we're targeting specific moments and placement in order to tap into the holiday spirit. As you already know, our marketing calendar is multilayered. So we also ran a secondary campaign, which this time focused on innovation, and we successfully launched Double Down, which helped us increase frequency among regular users. The product, as I mentioned, is an innovation, and it supports our efforts of strengthening the burger territory, which is a profitable one. As Calin mentioned, value for money was an important pillar this year for our strategy. So during Q4, we continued our efforts to reinforce this pillar. And we communicated value products like the iconic Tuesday Bucket, our all year round coupons that are offered through our mobile app, which change every 6 weeks on average. With the objective of offering consumers easier access to our products through Click & Collect, we launched a campaign with prices in collaboration with Coca-Cola, which increased the active users of our mobile app. Last but not least, in Q4, we restarted the I want to go to high school campaign where we collect donations from customers to provide financial assistance to use from difficult backgrounds to be able to continue their education. Moving on from KFC to Pizza Hut. Our winter campaign for Pizza Hut was an innovation campaign and we focus on an iconic product, Cheesy Bites. And we also added a new product called Meaty Bites, and the campaign delivered sales and increased consideration by building on distinctiveness and strengthening our best Pizza attribute. Pizza Hut is also a multilayer calendar. So as a secondary layer for Q4, the brand communicated value offers for both its dine-in and delivery channels, which resulted in same-store sales growth. The value offerings range from early week specials to abundant value offerings. So in December, so at the end of the year, in December of 2022, we finalized a complex menu optimization process for Pizza Hut, which was rolled out in all the stores and will result in a lower cost of goods and the more efficient back-of-house operations. And moving on to our purple brand. The Mexican-inspired brand focused its communication in Q4, again on innovation by launching a product called Double Crunchwrap, a fan favorite with a twist, which resulted in both trial by light users and increased frequency among regular users. In Q4 of 2022, Taco Bell had its 5-year anniversary. So we offered prizes and discounts to mark this moment to both loyal consumers and dedicated employees. And something that you've heard from me this year, we started this journey at the beginning of the year. We launched our loyalty program, which is done through our mobile app with -- which offers a rewards program. So we focus -- we kept the focus in Q4 for loyalty, and we will do it onwards in 2023. Last but not least, and Vale mentioned this digitalization is very important for our brands. And you've seen this before focusing on ease of assets is very important for us. It has been one of the pillars for this year. So we are trying to offer our customers frictionless experiences whenever they use our digital assets. And now moving on to our last slide, a few highlights of our performance when it comes to performance by brand, and we'll talk about sales and profitability. We'll start with KFC in Romania. Q4 was another strong quarter of growth for KFC, as all store performance improved 35% year-on-year. And same-store performance saw 31% year-on-year, which is an excellent result. KFC Romania closed 2022 highly profitable with an EBITDA of RON 99.8 million and a net profit of RON 68.6 million. Moving on to KFC Italy. All stores registered a 32% sales increase in Q4 2022 compared to last year, while the same-store evolution saw 29% sales increase. Something worth mentioning is that U.S. Food Italy significantly decreased the restaurant operating loss due to a strong second half of the year and the normalized EBITDA of 2022 stood at RON 3.7 million. Moving on to KFC in the Republic of Moldova. The sales here in this market registered the most notable increase in Q4, reaching RON 5.1 million. So KFC Moldova closed 2022 with an EBITDA of RON 2.7 million and a net profit of RON 2 million. Moving on to next slide, yes, Pizza Hut. In Q4, the brand registered 39% increase in all store performance and the 34% increase in the same-store performance. In 2022, Pizza Hut in Romania opened 2 new units, which helped those store performance. Moving on to Taco Bell. Taco Bell same-store performance in Q2 (sic) [ Q4 ] registered a 46% increase year-on-year, an excellent result, while all store performance saw a record increase of 56%. We should mention that in 2022, 2 new Taco Bell restaurants were opened. So Taco Bell closed 2022 with an EBITDA of RON 2.5 million. And that -- this concludes our presentation.

Thank you, Monica. We will now open the floor for questions. As a kind reminder, if you would like to ask a question, please type it in the chat box, and we will read this out loud, and then we will address it. We already received several, several questions. So I would like to proceed and read them out. The first question is from [ Cosmin Patruti ]. Congratulations for the quarterly results. My questions are below. Can you provide an update on the strategy for development acquisitions of new brands?

I'll answer to this. We will continue our strategy to develop especially KFC restaurants drive-throughs in Romania and also in Italy. We have been planned for this year a number of 9 stores to be opened. And in the same time, our -- the welcome agreement with Yum was finished at the end of last year. And we are in the process to negotiate another one.

Thank you, Calin. The second question, what is the remaining pricing power of KFC in terms of price increases compared to main competitors? At this point in time, can you pass additional cost inflation to the consumer?

So I'll take this question. In terms of additional price increases, this is a living organism since we are facing inflationary pressure, and it's not only us, it's the whole category. So we believe that going forward, we will have the same pricing power as we had in 2022 because we do look closely at competition and the pressures that we are facing, especially when it comes to raw materials, it's the same pressures that they are facing. So we believe that we -- as we did in 2022, we will be able to offset increased cost of inputs by a combination of price increases, but also value offers to the consumers that will help them access our brands.

Thank you, Monica. The third question. Main concern for 2021 during the pandemic was top line. In 2022, the pressure was particularly on the cost side. Where do you see most risks for the business in 2023? And this I'll ask Valentin to answer.

Sure. So 2023 will remain a very complex year. We foresee a lot of challenges during 2023. Probably the COVID-related ones are out of pictures, but we are still remaining to fight to the inflation, which probably will persist during 2023. As well, we are very carefully analyzing the purchasing power of the -- of our customers. So the consumption is one of the main topics. Obviously, this will be addressed constantly, as Monica just mentioned through value proposition. So we are not out of the pressure period 2023, it's still a year of extreme challenges, and we are here to mitigate them.

Thank you, Valentin. We now move to the second set of questions. Congratulations for the quarterly results. Question number one, why did you close the 2 restaurants in Italy?

The answer is very easy because of the low performance. But we decided to close the stores that generate the bigger process for us. And at the same time, we are looking to replace these 2 units with another [ stores ]. What I want to mention is that in this industry in the development process, the percent of 10% also [ 6 units ] is accepted, which means we judge the development based on the net new units that is so far.

Thank you, Calin. What are your expectations regarding the EBITDA margin in 2023? Are the Q4 margins indicative for what we can see in 2023?

So the expectation for the EBITDA of 2023 will be validated by the approval of the budget of this year. But if it is about to give you a guideline regarding this, we are targeting to have an EBITDA of around 10% for 2023.

What is your future beyond Pizza Hut development? How do you assess the results of your rebranding efforts?

At this moment, we are in the very deep discussion with Yum, regarding of Pizza Hut. And also, we are in the process of unifying the channels because in this moment, you operate 2 channels, the delivery channels and the dine-in channels. And once we'll fix the problems of the brands, we'll communicate how much -- how many we will develop. But in -- somehow in the future we will be small units based on delivery on the -- in the new format of first casual dine-in.

And what are your dividend expectations for 2023 besides the already announced dividend per share?

So the dividends will be monitored. I mean the capacity of the dividend distribution, it will be monitored throughout the year. Basically, it is dependent on the evolution of the context. As you already know, our dividend capacity still exists. So we have retained earning that offer us the capacity to further distribute dividends in the future. But this should be definitely correlated with the opportunities we have on the table, the case level and with the evolution of the market.

Now we have another set of questions. Can you please repeat what closings have happened during 2023? And what are the planned closings and openings during the current year?

I will take this, Zuzanna. So in 2023, we closed the following: in Italy, 2 restaurants, the unprofitable ones, i.e. KFC Verona Corso Milano and KFC Torino Moncalieri. In Romania, we have closed 1 Pizza Hut last year, I'm speaking about 2022 as well, a combination of profitability and contract expiration plus license for this one, it's both Pizza Hut Cotroceni. And in respect of the planned ones, the ones for 2023, we are targeting -- we have on our radar another 3 Pizza Hut restaurants to be closed, but this is still subject to validation. It will be done probably throughout the year. But the intention is clear that's why we have booked the provision in respect of this for the financial statement of 2022. And the [ direction ] it's again related to the profitability of the business, and it's part of our strategy to bring this brand's business profitable together with all the actions that we still have some of them mentioned earlier by Calin.

Thank you. And we have the last question. I would like to mention that if you have any additional questions, please type them now, otherwise, we'll be concluding the call in 2 minutes. And the last question is, what does qualify as a poor performance in relation of the stores? What are your target return on investment when investing into a new location?

So here, the decision was very obvious because there were loss-making and with [ our next ] -- no potential measures to make them profitable unfortunately. However, when we're opening a new restaurant, we have an internal process of approval, where we have -- where we are doing discounted cash flow for the period and we are targeting a set of KPIs. We can speak about a payback ratio for around 4 years, 4 to 5 years, IRR of at least 30% and significantly present value of the future cash flow.

Okay. Thank you, Valentin. If there are no further questions, we would like to conclude this call. I would like to just give you a reminder regarding our financial calendar for this year. So on March 30, we have the ex-dividend date for the dividend that we have discussed in this call. On 27th of April, we're going to hold the Annual General Meeting of the Shareholders. The documentation actually will be available together with the auditors report a month before. We will also be publishing the budget for 2023 as part of the General Meeting of Shareholders documentation. Other than that, on 15th of May, we will be presenting the first quarter and for the second half of the year. We have the half year results on August 30 and the third quarter on November 15. Later this week, together with Calin, we will be in London meeting investors at the Wood's conference. Therefore, we hope to meet some of you there. Thank you very much for joining our call, and we look forward to hearing you again on May 15.