Tecan Group AG (TECN) Earnings Call Transcript & Summary

Good morning, everybody, and many thanks for joining us today at the presentation of Tecan. My name is Sebastian Vogel of the UBS Swiss small and mid-cap research team. As usual, we start off with a presentation by the company and afterwards, of course, depending on the time left, there will be a Q&A. You can submit your questions, I believe so, and I will read them out loudly later on during the Q&A session. And without further ado, I warmly welcome Mr. Achim von Leoprechting, CEO of Tecan; and Ms. Micki, who recently took over the CFO role. And with that, I will hand directly over the word to you, Mr. von Leoprechting. Many thanks.

Thank you very much, and good morning, everyone. And it's an honor to speak to you today. Just to cover the housekeeping. As I will be making some forward-looking statements, please have a look at the safe harbor statement on Slide 2. And then with this, I would like to turn over to Slide #3 and to start the presentation and the discussion. Tecan is empowering the century of biology with what we do in our markets and with the clients that we're serving. And it's probably never felt more tangible than today being in the space of advanced biology as a player in clinical research and diagnostics. On Slide 4, we are outlining how we are benefiting from multiple mega trends in our industry. And let me list them for you and then afterwards make some comments on how we fit in and how we contribute. There is an acknowledgment that population growth is happening around the world and the population itself is aging. This is in itself poses challenges and demand on the health care system. There is increased high levels of investment in health care, in life science research, not only in western geographies, but also ongoing in emerging markets around the world. As the development of targeted pharmaceuticals and the use of companion diagnostics aiming at making therapies more efficient and more personalized as we consider areas like oncology and other areas of very expensive treatments. There's an explosion of biological knowledge in -- that is being leveraged into applied markets. So when you consider areas like advanced genomics, this has clearly a play in biological research, but is going to be leveraged into areas like food and agriculture as we speak. And then lastly, genetic testing directly for consumers as well as population sequencing programs are happening around the world at a fast pace of expansion. So with this, we as a company, and of course, as an industry, we are seeing this leading to increase of test volumes, but also increasing leads for productivity, reproducibility and standardization, precision, as well as robustness of processes, and of course, the associated regulatory compliance for the underlying market segment. So this all in increases the need for advanced laboratory automation. On Slide 5, we have outlined on how Tecan benefited from translating these mega trends into growth opportunities over the past years. And what you can see, starting off here on this graph from 2013, all the way to 2019, Tecan has seen with the successful execution of the strategic plans a solid financial performance on revenues, so the sales development shown here, leading up to a CAGR in Swiss francs of 8.6%, a very good expansion of operating profit or EBITDA, and alongside the very solid cash flow and expansion of net profits. So all in, I think we've demonstrated our ability to grow, and to some extent, outgrow the underlying market segments that we are serving. On Slide #6, I wanted to discuss how we fit into the framework of health care use and how our competencies are indeed effectively empowering the before-mentioned century of biology. So we engage in health care use cases like cancer, infectious diseases, metabolic diseases, hereditary and rare diseases and several others, helping customers to understand disease, diagnose diseases on an increased individual level, and ultimately, more economically and efficiently treat those diseases. So we're doing this by mastering application areas that span from genomics, all the way into protein analysis, and then ultimately going into cell and advanced tissue analysis, procedures and workflows. And underlying technologies would include sequencing, PCR, mass spectrometry, immunoassays, imaging, advanced staining and several others. And this is all based and leveraged from competency set that we have accumulated over 4 decades that, of course, includes the in-depth knowledge of these underlying applications and workflows, being expert in robotics and automation, as well as an increased investment and differentiation through software and informatics. We also have a very deep and profound knowledge of detection and imaging. As well, of course, the inclusion of products in addition to our liquid handling efforts to include increasingly reagents and consumables to take advantage of more complete solutions, but also helping our customers to more rapidly accelerate their work in a very compliant and productive fashion. This is all based on a very robust foundation of product development and system integration expertise around the world, a very well built out quality management system. But most importantly, what I said before, all founded on a very solid foundation on regulatory expertise and very efficient operations around the world. On Slide 7, we are calling out our vision statement so with all the before mentioned capabilities, we aim to be in every lab, every day, empowering our customers to do a better and more efficient job in clinical diagnostics, life sciences, research, and pharma discovery and production. On Slide #8, I just wanted to briefly introduce Tecan as a company to you. So we're just celebrating our 40th birthday. So we have been founded here on Lake Zurich 4 decades ago by a dedicated team of engineers, and since then, grown to become one of the leading companies to accelerate and automate laboratory processes and state-of-the-art diagnostics around the world. We're offering increasingly our complete solutions in selected application areas, mainly through the acquisition of capabilities over the past 6 years. And those include immunoassays for specialty diagnostics, specific consumables for LCMS or mass spectrometry sample preparation, as well as advanced reagents for our next-gen sequencing library preparation. We are headquartered in Switzerland, operating 3 manufacturing and R&D sites in Europe, and 4 in the U.S., 1 manufacturing site in Asia and we are running 1 larger software competence center in Frankfurt, Germany. The group is around 2,000 employees in total with a sales and service network operating in more than 52 countries. And we are fully floated on the Swiss Stock Exchange and reached a market capitalization at around CHF 4 billion in the last weeks. So maybe then on to the growth drivers and product launches, continuing on Page #11. And so as we grow our franchise, we're all building our investment and expansion decisions on a framework of a very clear strategic alignment with the underlying market opportunities. As a company, we are serving the life science research and in vitro diagnostic markets, each being characterized as sizes of around CHF 50 billion to CHF 60 billion each, with an underlying CAGR somewhere between 3% to 5%. So how we are positioned is shown underneath. Our Life Sciences division pretty much mirrors the Life Science Research segment as our Partnering business is serving mostly the in vitro diagnostics market. As you see, the lines are not very straight, but there is a bit of a kind of overlap between the 2 divisions. As also in Life Sciences, we are serving some clinical clients, and in Partnering, we have some sub groups of customers that serve the life science market. However, in terms of our strategic growth and expansion, we definitely like the markets we're in right now, and we are aiming at scaling up those capabilities, both through or -- but obviously also looking at scale and capabilities through M&A in the markets that we're serving today in lab automation and the outsourced part of the in vitro diagnostic instrument market. Then secondly, we are aiming, and we have already successfully entered this journey, to add additional pillars and products, particularly into the instrument portion of the Life Sciences area of our underlying market segment. And then thirdly, we are also expanding our reach into reagents and consumables by offering selected solutions in the areas of genomics, proteomics, and advanced cell and tissue analysis. So all in, these pillars represent a very good growth opportunity for us, and they will be targeted through a combination of organic and inorganic expansion over the coming years. Slide #12 outlines the -- one of the, I would say, most important differentiation and unique points about Tecan as we aim to transition technologies, particularly from research, into the diagnostic framework. So as you can see on this slide, our 2 divisions, Life Sciences and Partnering, are serving slightly different market opportunities where the Life Sciences part typically covers individual steps of a specific workflow through our Tecan branded products, whereas on the Partnering side, we are translating these learnings into technologies and solutions for leading IVD companies for the development of sample-to-result solutions that span the entire diagnostic workflow. And examples of this strength of translating research over the market of lab-developed tests into the in vitro diagnostic markets are represented as examples here, and I spell them out. They are next-generation sequencing. They include mass spectrometry and advanced mass spectrometry. But also sample preparation areas like liquid biopsies; circulating tumor cells, particularly aimed at the oncology; NIPT and infectious disease markets; tissue pathology, with all its flavors of traditional staining and advanced staining, including molecular techniques; and the translation of more innovative programs to identify and detect biomarkers through ultrasensitive ELISA technologies and many more. So the translational aspect of what we do is a very important differentiation. It has a lot of implications on how we run the operations and R&D organizations in our framework. On Slide #13, just a quick comment on the OEM or the Partnering division where we aim to be a partner of choice to the IVD industry. And we have now reached the stage and the maturity of this business where we're serving more than 35 existing partners with different instrument solutions around the world. And they include a variety of workflows, spanning from advanced genomics, PCR, transfusion medicine, tissue staining as well as other application areas. We have a cadence of new launches where we aim to complement and add to the portfolio through new partnerships, 2 of which are listed in the middle of this slide. One is a collaboration that we've launched last year together with Sysmex Corporation out of Japan, the system that is automating workflows of cell analysis, flow cytometry. And then a second system, again, where we have clearance from our clients to mention their name and our partnership is for a Swiss-based company, Lonza, where we have incorporated their workflows to endotoxin test, the area of bio production and facilities that they are serving. Under development is a significant number of projects that are currently being worked on where we have signed development contracts, and they are more than 5 right now under development, and they range from smaller to large potential, but also smaller to larger complexities. And then you have one project that we are able to disclose here and present, is a collaboration with a U.K.-based company, the Binding Side, where in this collaboration, we are advancing mass spectrometry to deliver the next-generation technology advances in the area of diagnosis of blood cancers. And then lastly, on the insulin pipeline, we have consequently built out our partnerships around the world. We're looking right now at more than 25 concrete concepts under discussions and in early phases of feasibilities. They span a very wide range of applications, but the application space is probably the most focused on right now is molecular diagnostics and advanced genomics. And we are constantly adding to the instrument pipeline using various sales approaches around the world, and particularly, of course, on large key accounts in the western geographies, but also partnerships increasingly in Asia. On Slide #14, just some examples of our product launches and the dedication of our teams to offer more comprehensive and complete workflows, particularly for advanced genomics, where we're combining our product offerings in automation, detection, software, consumables and reagents for next-generation sequencing. So in this workflow, now with the latest addition of our products, we are covering the space from sample identification, aliquoting, all the way through DNA or RNA extraction, into library preparation and library quality control. And as an illustration, on the right-hand side of this slide, you'll see a system that we launched last year that we call DreamPrep NGS, and this has received very favorable market reception. We've placed a number of instruments already in this space. And this is probably the most advanced turnkey solution for library preparation that delivers unprecedented productivity, speed and quality of these highly complex workflows in next-generation library preparation workflows. And then this year, earlier, we launched the second variant of the DreamPrep family, the DreamPrep NAP, again, offering a turnkey solution that allows customers elegantly to extract DNA or RNA from virtually any sample. And as you can imagine, this system was launched directly into the period of the COVID-19 expansion around the world and has thus received again very, very broad and very favorable recognition by our customers. On Slide #15, just an illustration of our continued focus and build-out of our recurring revenue businesses. And this is a very clear focus on application and solutions where we aim to offer more complete integrated systems and solutions that also feature consumables and reagents. And as you can see, we have been quite successful to expand the total contribution of recurring revenues, starting off in 2013, now spanning more than 41% in 2019 as an overall contribution to the Tecan revenues that we generated in the last year. And these products span from differentiated reagents for specific workflows in immunodiagnostics or genomics. They also include functional consumables for mass spectrometry, more general consumables for the workflows that we are supporting, but also very importantly, includes service, spare parts, an increased range of also differentiated software products that we called out here as Introspect and Connect, that are very important growth pillars for us going forward in the space of lab connectivity, productivity control and the expansion of digital service tools. So now switching over to the financials and the outlook. So on Slide #17, maybe just allow me to make some comments on how we are currently being exposed or working through the face of the coronavirus reality. And I made a couple of comments earlier this year when we announced our 2019 annual results in March. And the underlying pattern of head and tailwinds that we're experiencing in this period has continued and probably the amplitudes have gone higher, but the underlying trends are very similar and can be described through what we discussed even earlier at the onset of this outbreak. So for the research markets, we see a very robust demand for our differentiated workstations like the DreamPrep or other automation systems that help researchers. And you see here one example from a publication very early on out of the China Wuhan outbreak where our products were used to characterize the specification and mutation levels of the SARS CoV-2 virus. And this is something, of course, that also progressed around the world where customers are using our automation solutions in research, and obviously, now also in scaling up, to some extent, the drug and medication, but also the vaccination trials that are ongoing. On the other side, we've also seen negative effects on the research side or the academic market, where, as you can imagine, due to the lockdown situations, we have seen starting again off in China and then transgressing around the world, seen significant delays due to site shutdowns of universities and research labs, impacting installations and serviceability, and also supply of our consumables and reagents into these research facilities. On the clinical testing side, we've been, again, very early on in supporting clients, both through our Life Sciences and our Partnering division in the effort to scale up genetic testing for the affected populations of patients. We have since then scaled up significantly our support, not only in China and South Korea, where, of course, we started, but increasingly now around the world, covering regions from Australia, to Israel, to Russia, Europe, of course, and ultimately, into the U.S., and ongoing into some other emerging markets where we've seen multiple instrument orders coming in and we're in the process to now deliver. And together with our partners, get these systems up and running for scale up testing. And the only element that I wanted to call out is also a headwind effect that we've seen in the clinical market, is that for some elements of our Partnering division where we are supplying components to partners that are not directly affected or targeting the COVID containment, we had seen some slowdown of the consumption of our building blocks that supply to partner factories, just again, based out of lockdown situations or site closures where the consumption of our components into the build-out of IVD instruments had been somewhat slower than originally planned for. But all in, we faced, again, both head and tailwinds that we are currently incorporating in our planning and execution. On Slide #18, just again to recapitulate our sales development and the growth journey that we've been on. I mentioned before, the CAGR since 2013 had been 8.6% or 8.9% in local currencies. We've grown substantially, from an organic and inorganic standpoint, with 2/3 coming actually from organic or in-house R&D delivered growth. We have seen major new instrument platform launches in both the Life Sciences and the Partnering segment seen very -- and driven a very expansive growth in China, in particular, where we now see a contribution of China to exceed 10% of total Tecan's revenues. We have expanded the addressable market and recurring revenues to target acquisitions. So we've made 6 acquisitions leading to the footprint that I outlined before, giving us also now the first production site in Asia with an acquisition that we executed in last year with a production site in California and a production site that we now incorporated in Vietnam. And as I outlined before, we're offering increasingly, through these acquisitions and in-house R&D programs that, of course, now work to expand the reach and the product to offer even more complete solutions for the before mentioned selected application areas. So now lastly, on the financial outlook for 2020. And these comments are the same that I made in March 17 and they incorporate all the latest thinking around the impact of the coronavirus crisis. We are forecasting to grow in local currencies in the mid- to high single-digit percentage range. We are assuming, compared to previous year in 2019, even higher share from organic growth. And of course, as said, the impact of the coronavirus outbreak on the full year business performance cannot be fully predicted at present. But since March, I think, of course, we learned a bit more and we included these learnings into the restatement of this guidance. As always, potential additional acquisitions are not taken into account in the revenue projection or guidance. On the EBITDA margin outlook, again, I think we had seen a very positive margin trend in the traditional core business in 2019. We are anticipating a further increase in the reported EBITDA margin to around 19.6% of sales in 2020. This continues to include acquisition-related costs that come from previous acquisitions and have been discussed and highlighted in previous meetings. And again, potential additional acquisitions are not taken into account in this outlook. So with this, I think I conclude the presentation at this point. Again, I think trying to circle us all back to the statement that I made in the beginning that we, as a company, aim at empowering the century of biology. And as I said, we feel in the current response to the COVID crisis probably even more connected to this statement. And our teams around the world are giving everything to meet the demand of our partners to contain the crisis by scaling up automation, but also helping researchers around the world to identify mutations and identifying the best treatments for the virus containment. So with this, I'll probably stop at this point, and I believe we have a few minutes for Q&A. So any questions, please feed them through the organizers, and I'm more than happy, together with my colleague, Tania Micki, who is with me on the call, our CFO, to answer any questions that you might have.

Thank you, Achim.

Many thanks, Mr. von Leoprechting for this insights. As you mentioned, we have definitely some time left for Q&A. [Operator Instructions] The first question that popped up was with regard to the current corona situation. You mentioned headwinds and tailwinds in that regard. How would you describe -- would you see one or the other prevailing at the moment?

That's -- I think it's still -- I mean in our thinking, it's still early, early, early days, and we are kind of adapting to the situation daily. But of course, when I reiterate the guidance on growth, we very with sober minds kind of incorporate, again, what we're seeing is the kind of the amplitude is getting probably larger in both directions, they're still reflecting the same guidance on mid- to high single-digit growth. So it's -- but both effects are still very, very, very significant. And as I said, I mean one of the largest headwind effects was the site closures of research sites, and both in academic, but also clinical and pharma research. And I believe there are pretty comprehensive reports out there that illustrate what percentage of labs are opened again or reopening. And of course, we are following this trend, again, very closely, starting off in China where now the lift of the restrictions is probably most tangible. We're seeing academics coming back online. It's still not at normal levels, but we believe because this is typically a business where we deliver products, like our detection instruments or reagents and consumables to some extent, that this is also a business that after the lockdown periods of these labs, we should be able to recover a good portion of this going forward. But of course, in some administrations, the lockdowns are still pretty harsh. And also, the U.S. is a very, I would say, spotty pattern right now. So it's still early to say how this will play out, but what we expect is this effect will continue for still some time in terms of restrictions to access accounts from a sales and marketing perspective, which is why we are shifting gears towards e-commerce, e-marketing, accelerating the journey that we have been on for some time now to, yes, basically mitigate some of the expected restrictions. On the tailwind, same thing, I mean as we saw the pandemic migrate around the world. And as you are all aware, the reactions and decisions to scale up testing varied significantly by country and administration. And we've seen, of course, more, I would say, deep efforts to scale population-wide, starting off in South Korea, but also other regions follow this similar pattern. Even within Europe and in some different states in North America, I think the maturity of testing is still very heterogeneous. So as we kind of, of course, work directly with testing labs through our Life Sciences division, supply open systems for COVID testing as well as working on the OEM partnering side with established IVD companies that offer them sample-to-result solutions, we are in a very, I would say, positive situation to scale up demand, and based on the fact that most technology that we supply on either side of our businesses are using very similar modules and underlying architecture that allows us to scale production quite efficiently.

Perfect. And now the next one is also referring to your presentation. When you mentioned academic research that you faced some headwinds over there, can you quantify your exposure to this submarket?

Yes. I can probably give you a bit of an illustration. It's not kind of fully reflecting the picture, but you probably can assume that for us academic as a segment, as a company represents roughly around 10% of our revenues that we generate in our Life Sciences division. And again, to remind you, the Life Science division is approximately 56% of what we do. So it is a meaningful part of our business. But again, this is something where I think the headwinds are probably the fiercest at the moment with our inability to work with customers to make installations and conclude revenue recognition, if you want, and supply of products. But this is roughly where we are. It is meaningful, but it's not, by far, the majority of what we do. It's -- yes, it's like 10% of the Life Science market.

Understood. There was another question. If the current situation or the current backdrop is impacting also your business mix with some sort of submarkets having less demand and some potentially others have more demand, so is there much of an impact on the business mix that you can see on your side for now?

Yes. Yes. No, I think that is something where -- I mean we had to very rapidly reshift resources and -- in response to the product mix. As you would imagine, the area of automation systems, if those are the kind of the IVO product range or fluid product range, in very high demand. And what I said before, one of our advantages is that we use both on the Partnering side and on the Life Sciences direct product side, very similar architecture. So we introduced shift systems here where we're adding resources. And we have quite some runway to scale our operations. And again, keeping in mind that we typically only do final assembly and testing. And we have a very good network of suppliers, which, again, is something we've been very actively working through these kind of lockdown periods, obviously, having a kind of pandemic plan and a risk mitigation plan, but never seen something at this scale. But to this moment, I can say we've been very diligent and saw a lot of cooperation by our suppliers. And we've able to kind of respond to the mix by also shifting our suppliers, shifting our inventories, both in our incoming warehouse, but also in our outgoing decentral warehouses. So based on our modularity, I think we've been quite fortunate that we could respond very quickly and could redirect resources from some product lines that see less demand to group production environments and see higher demand. That's not for all products, and as I said before, areas like, for example, detection are probably affected most by the academic side of things. But again, there, we operate all our sites under the ISO certifications that allow us to produce also modules and other products for other product areas, and this is something that we're also leveraging right now. So I think all in, I think we could respond pretty elegantly based on the underlying synergy of our production ranges, not for all products, but for most of them. So in all in, I think we feel pretty good about the responsiveness towards H2. And then obviously, counting also on some recovery of the academic market into H2, maybe not to the full extent, but at least to some extent, and this is how we are thinking about inventories and managing our incoming supply.

Understood. There was another question coming up, and it's with regard to the business that is unrelated to the coronavirus, if there's much these days. But if you can shed a little bit more light how that is developing.

Yes. And of course, we both -- on the Life Science side as well as on the Partnering side, we do have partners that have franchises outside of infectious disease testing, but they are mainly in areas like cancer, research, cancer diagnostics, but also areas like transfusion medicine and other areas. For us, particularly on the Partnering or OEM side, we are not seeing significant changes in the pattern of our engagement or the underlying business that we do. Again, maybe because -- I mean we are in areas, like I said, transfusion medicine, where maybe there is a bit of a slow demand of blood donations or blood allocations to hospitalized patients, but this is a market that is still, I mean, very much dependent on automation systems. And I think this is something where I think the business is still going pretty robust, as well as areas like advanced cancer, cancer diagnostics. And of course, there is, I think, some evidence that some of the kind of earlier screening procedures in cancer may be deferred out, particularly where our partners come in is in the area of more acute cancers, which I think is something that is still happening to most of what we can see right now. And of course, on the Life Sciences side, we've seen some shift of research, like I said, mainly through site closures, less than repurposing of research directions. And again, in the space that we are engaging in right now, we're not seeing a drastic decline like maybe you would anticipate it in -- or that's being kind of documented in areas like hip surgery or kind of more invasive, noncritical routines. We are typically not in these type of medical or clinical environments.

Understood. There was another question, if -- and I was asking if you can outline the path to higher operating margins And the role that mix and operating leverage play -- is playing in your thoughts on a group level, to get to the sort of higher operational margins.

I mean, maybe I can start off and Tania can chime in. And yes, of course, for us, kind of the best leverage on what we do is top line growth. And we are kind of relatively benefiting from this, both from a kind of sheer growth perspective, but also from a kind of mixed portfolio, of course, which is why we are putting so much emphasis on the kind of this area of recurring revenues in service, spare parts, plastic consumables and the increased portfolio of reagents. And probably, it's also safe to assume that the leverage of growth is a little bit different in the 2 divisions. I mean, in Life Sciences, typically, we have higher expenses and costs to sell and support our clients because it's a direct product business. And of course, on the other side, typically, we generate higher product margins in the direct business, whereas on the partnering OEM side, this is an area where, I mean when you consider sales and operational resources, it's really a key account business, so it's a B2B type of franchise. And this is where, of course, we benefit most from a direct leverage from top line growth. But maybe, Tania, you want to kind of add a couple of comments on what we're also doing actively to kind of increase operating margins?

Sure. And we started already a few years ago to take out costs, particularly in our operations. So we had a lot of good improvements in our freight cost, particularly last year. This year, however, again, looking at the tailwind and headwinds of our -- of the corona impact, what you can see is that we had some cost increases from the freight perspective, also from efficiencies and from the perspective of our absorption because of the lockdown situation. On the other hand, we have savings from the travel costs, that, of course, we are incurring on a much lower scale than before. And we also have savings from deferred hirings. We are also looking into other costs as we did in the past, and we continue to balance the 2. So from that perspective, volume mix and costs, we still aim to what we have guided for, which is around the 19.6% EBITDA margin.

Perfect. Maybe there's one further question, and that is going that way. So if Tecan continues to grow, has there been any difficulties in maintaining the balance between being a partner to a competitor to some of your clients?

Yes. We are keeping a very clear line on where we want to expand our Life Sciences business and where we see the advantages of using a wide range of partners to commercialize our systems on the clinical diagnostics side. So clearly, for us, the focus on Life Sciences is in research, in the scale-up of technologies into a segment that is called laboratory developed tests. And this is typically a very rich space that leverages and demands open systems. So this is where we are engaging in workflows, all the way from fundamental biologic research, over pharma, and into clinical work with our open platforms that can incorporate and feature any type of reagent, either developed by the lab or by a variety of multiple reagent vendors and suppliers. And that seems to be a very cost-effective and rapid methodology. Even now in the COVID situation, we're seeing this scaling up to very significant levels. And then on the Partnering side, as I mentioned, I mean, this is typically where we develop sample-to-answer solutions. And this is something where we, as Tecan, have decided not to engage to combine and clinically validate entire workflows to that extent because this would prohibit us from working side-by-side with a lot of clients in the IVD space that have similar workstations and similar products from us, but then differentiate through their software and through their reagent content. So when you look at our mix of clients in areas like infectious disease, for example, you will see many companies leveraging traditional PCR technology, using a very common infrastructure that we supply through our automation platforms. And in adaptation to the workflows, we typically only customize the appearance, the colors, the shelves, and the software and some of the workflows that they need for their systems. So for us economically, it's a much better way to scale in these 2 directions. But then having a lot of underlying synergies between the divisions that give us, what Tania alluded to, a lot of operational leverage because we are typically bidding all our solutions from specific sets of modules and increased also modular architecture or software.

Perfect. Many thanks. I guess, with that, also, time is up. So I want to thank you all for joining us. And also, of course, many thanks to the presenters. And I wish you a great rest of the day. Goodbye.

Thank you. Bye.

Thank you. Bye-bye.