Tesmec S.p.A. (TES) Earnings Call Transcript & Summary

Good morning. This is the Chorus Call conference operator. Welcome, and thank you for joining the Tesmec business plan guidelines conference call. [Operator Instructions] The conference call will be held by Ambrogio Caccia Dominioni, Chairman and CEO; Paolo Mosconi, General Manager; Marco Paredi, Finance and Balance Officer; and Carlo Caccia Dominioni, Business Unit Director. At this time, I would like to turn the conference over to Mr. Ambrogio Caccia Dominioni, Chairman and CEO of Tesmec. Please go ahead, sir.

Good morning, everybody. I have the pleasure to open this conference to keep you informed about the decisions taken by our Board of Directors in connection to the business plan guideline and information to the shareholder increase of equity. As already disclosed, we are going to make a presentation organized basically to clarify the reason why we're here and what the reason of our decision. Coming back to what is our general point of view, if we go to Slide #4 of our presentation, we have to clarify the different phases of our history in -- as a public company. We opened our scenario with the 2010 decision to become -- to enter an IPO with confidence. And our company in that period was organized on 2 basically traditional business, Stringing and Trencher, where Stringing was the traditional business of Tesmec and Trencher was a new business under development. For the decision taken during that period and following to our decision to become a public company, we started in the name -- for 10 years to diversify and keep trying to have an investment in high-technology area to be -- to give a future to our company. For this reason, in the last 10 years, our focus was to develop, first of all, an M&A activity that was concentrated in 3 business areas: a railway that we have a top position of company to keep -- to complete the line of our products in the Railway business. Energy-Automation, we made acquisitions of a technological company, a small company, in the area of digitalization, automation of electrical line; and the last decision taken was to stabilize the business operation. We made an acquisition on a service company that is mainly in France, and we completed this project beginning of the year with the supplemental business that is for sale. As of today, we have a full package of business, and we have a good platform to create the future for our business. In this year, the impact of this activity was that, basically, we made a huge effort to have an integration of know-how to try to reorganize our company to create a company ready for next phases. This was a capital-intensive business and also human resources high investment because we were obliged to reorganize company and to perform a strong activity to make integration and coordination of our business. The status basically of this business was also in connection with the procedure that we have to follow to certify products and to have product ready for the product we are following to do the safety role and to do the common goods that are in every country. This was -- it was a time-spending activity, and we are in a very good phase now because we have completed a lot of procedural connection to get all these products. Now and this is the pleasure is the first time after 10 years that we are going to present our guideline for business plan because this is a must to try to explain why we are here and what is our future and what is important for us in the future as the future develops. The focus of our development, we don't just have the consolidation of these platforms. And basically, our key business is going not to utilize the investment that we have done in order to go to further diversification. For this reason, I think that this is an important phase because, especially in a COVID environment, we can confirm that, with our platform, we are facing this not-easy situation in a good way because due to the fact that we have an international network and we have -- we are working in a key area of technological infrastructure. I think we are supposed to have a next future positive and we will use the possibility of opportunity. For this reason now, I will transfer to you to Mr. Mosconi that is going to open this conference because, as we have seen, our top managers are now driving this phase. And I think that, in the future, we have to clarify what is the role of the shareholder, what is the role of the management. The management now is going to introduce you, as we've told, Mr. Mosconi, General Manager; Mr. Paredi, CFO; and Carlo, that is going to be the new organization and the energy business director. Thank you, everybody. Now I pass you to Mr. Mosconi.

Thank you, Mr. Caccia. Good morning to everybody. So at the beginning of this presentation, we would like -- we want to give you an overview of the market -- of the market sector in which the group is operating and the expected trends. The digital revolution, the environmentally compatible approach, the energy transition are the drivers that will push investment in the transformation of the energy transport infrastructures. In particular, strong investments are planned in the telecommunication with fiberoptic, renewable energy, smart mines and coring and railway, construction -- maintenance and construction of underground infrastructure such as water pipes and sewage networks. So as Mr. Caccia told, investment in this sector in general are not and will be not impacted by the recent global pandemic. But in many cases, they will be used by different nation as a support for local economies and, therefore, strongly incentive asset. So you can see in Slide #5 the sector where the group is operating. If you go on Slide #6, you can -- we can show you that thanks to the recent investment, we -- the group had knowledge and the portfolio of integrated products and solutions that position it as a technological solution provider with the possibility of gaining market share and increasing profitability without the need to make a further important investment. Impacted the strategic pillars on which this 3 years plan is based are: the first plan is a strong focus on the existing business by increasing the development of the current portfolio and the current geographical positioning. The system -- as a system integrator in digital processes and automation and special cybersecurity solution sector, this increase in recurrent revenue, like services, expanding the offered services, rental and especially in rental division, but also by acquiring medium and long-term projects that are the specific approach of the airports, of rail and automation. And of course, making a reorganization, and, let me say, develop the current organization in a more efficient way. So quickly, I would like to -- we would like to give you a quick summary how we decline this strategy, business unit by business unit. And it's important to start with Trencher. That is the main one. And the strategy in this sector is based on 3 main points, that are increase our rental and service offer as a recurring business to have a leverage on the technology to lay the cable and the fiberoptic on the ground for fiber, 5G infrastructure and renewable energy interconnection and develop the smart mining. If we go to the Slide #8, and we entered in -- very briefly in the rail business. You know that we are pushing for the international strategy, especially in Europe, to capitalize the experiences that we had in a domestic market. We continue in our research and development the progress for the presentation and certification of the vehicles. And we strengthened the position in the diagnostic segment. So now I will leave the floor to Carlo for some information regarding the energy sector.

So thank you, Paolo. Just go on with this quick summary. First, focus on the Stringing business strategy. So just a couple of the [indiscernible] periods that we see for the year in the Stringing business are the entering in the Energy Distribution segment, distribution and underground segment, both in the U.S. and in, let's say, Europe or especially Western Europe countries. The strength of the position in the, say, on the so-called strong grid business, with a special focus, even in this case, on the more developed countries. And the development of the reconductoring business that we consider as basically maintenance and reformation of existing lines more than construction of new lines. Going on with the Energy-Automation business sector. Basically, the key points for the next future period and plan period are the internationalization of the market that are basically following 2 main topics. The first topic is following our main customers. So basically, where our current and main customers are present. And well, basically, the sales network of Tesmec is already strong and present. Second is developing the system engineering. That means basically going from -- that will allow us to present and to supply -- pass on the supply of simple product to turnkey solutions. And the third one is the, let's say, rationalization of the operational structure. That basically means going from prototype volumes to industrial volumes on the operational side. So just these are the quick pillars, quick summary of the key pillars for each business line. Now we leave the floor to Marco, who will introduce you briefly the guidelines of the business plan.

Thank you, Carlo. Good morning, everybody. In Slide 11, we would like to show you the KPI of our plan shown in the 2019 pro forma result, the 2020 pro forma result was called forecast, and the special result and the end of plan in 2023. At the last time when we showed and presented the results of the first half of 2020 year, we show the performance KPI. I mean, the KPI including the full service group on a yearly basis for both 2019 and 2020. You know Tesmec bought the 4Service Group in April, so we would like with pro forma to show the benefit of integration of the rental activity in our business on a yearly basis. So as general overview, if you see the result in 2020-'23 in the business plan, self-financed, our target is to increase the growth of revenues around 40% to give a strong and sharp increase in profitability, thanks to the contribution of all businesses. And in the same time, from the fact we already invested in the previous year in our business, we want to generate significant cash flow over the period and decrease the net financial position at end of the plan. We say self-financing because the plan doesn't include any cashing from the share capital increase with rights issue. And due to the fact in the last 2 months, the group worked with a financial institute to collect EUR 50 million of a new credit line to support the growth or investment of 2021 and also the, let me say, the next month. Thanks to this line, we are confident in our growth. And in the same time, not only in Italy, but also in Norway. In Norway, we collected out EUR 80 million -- around EUR 80 million of credit lines of debt, showed to the market that the financial institutions trusted our business plan, trusted our sector in which we are working. And for sure, they try to follow us in the next years. If you go in the main KPI, we showed the turnover, the EBITDA and the duration between the net financial position over the EBITDA. We see that, in general, for the turnover in terms of compound annual growth rate, we grow from the famous EUR 200 million end of pro forma -- end of 2019 to EUR 27 -- EUR 275 million -- or around EUR 290 million. So we mean -- and CAGR of 8.5%, around 10%. Why we see this important growth? Because in each business line we are working with previous year to create, to generate a variety of growth for the next 10 years or so. I mean, for example, at the performance of next year would be impacted by the growth of Energy-Automation. Our first strategy is going to move from prototype divisions or subdivision to industrial division. In the Stringing segment, we are going to back to historical performance because in the last 2 years, we invested in our product range, our portfolio. And so our expectation is to follow the main reason in our [ daily ] market, like the U.S. market and European market for the reconductoring activities. And in the same time, thanks to the fact that we organized our portfolio, we are going to increase our profitability. We have some expectation also in the distribution activity in the market for the energy division to collect all the opportunity that this segment can generate over the years. One of the important things that you have to consider is the fact that from 2019 to 2023, we are going to reduce the impact of Trencher division from the 60% on revenues in end of '19 to be approximately 50% of end of 2023. These points about the Trencher, it means that the company is working in a long-term backlog and mainly inside the Trencher division. We have an important impact which we were recovering revenues from our rental and service. I would like to reiterate the point that we talk about the pro forma because Tesmec Group, both 4Service Group in April. So that allows us to think that we are going to generate on more profitability. So thanks to profitability, we are going to the second KPI, the EBITDA, in which we have a significant increase in recovery of -- sharp recovery of margin. So the CAGR, the expected CAGR over the year, we talk about 17%, 18% of the EBITDA. As I say, one of important things is connected to the margin generator from the rental and service activities, not only also we had to consider that we are going to consolidate the impact of products on automation with high-value margin. We are going to rationalize it and somebody [indiscernible] products in Energy division. And in any case, over the -- we don't see any kind of increase in fixed cost, let me say, as a standard growth. But we are -- our organization now is ready to support the 40% growth in revenue over next 3 years. So that is one of the main points that we want to underline. And if you consider the fact that we had fixed cost in percentage over the revenue, better production and optimization of operation structure because we are going, for example, as in Energy-Automation, we're going in from a prototype phase to invest in digitalization of [ space ]. And the same time, we can take advantage from the scale-up of this kind of activity. At the end, obviously, considering the impact of the turnover, considering the impact of the EBITDA, the profitability, obviously, our target impact in terms of ratio between the current financial position and EBITDA, so we are going to move from 4.4 of end of 2019 to around 1.5 end of the plan. This has generated, obviously, from the better profitability over the plan, but mainly because, obviously, we discussed about that in the previous meeting, in previous conference about the results of the group, we are going to improve in all business the net working capital. Why we are going to improve? Obviously, because in the first half of this year, we increased our inventory to support the growth, but also due to COVID impact, but mainly because we are going to create standardization and rationalization of our projects. In the next month, we are going to implement inside the group the unique ERP system that can allow us to better manage, to better control the stock of the traditional sector like Trencher and Stringing. And obviously, for each business, we are trying to -- with our financial partner, we have tried to create a specific line that are going to satisfy the need of this business, like Energy-Automation, like Rail. And so we are going to generate better management policy. Over the year, we don't see any particular CapEx in this plan. In the full year, the total amount should be around EUR 60 million with a progressive reduction to 5% of the CapEx and revenue end of 2023. And for sure, so I would like to reiterate one point that the investment that support the growth in this plan are made in the previous year. So in the first phase of the company in the [ first ] subsegment. I would like to pass the floor to Mr. Carlo Caccia, just only to show the next point related to share capital increase. So we go to Slide 14.

Okay. Thank you, Marco. So just to summarize, as of yesterday, the Board of Director of Tesmec approved the share capital increase of a maximum amount of EUR 35 million. Let me give you a couple of targets that will basically -- that are basically the focus for this rights issue. So first of all, the strengthening of the financial structure of Tesmec. And second of all, that without very, let's say, high priority, we -- let's say, we basically analyzed what are the key areas where to -- how to announce the growth of our strategical business in each business area so we evaluate and redefined for each business area some key strategic aspects, some key strategic projects. Basically, just a few words on each of these. So for the Stringing business, Stringing segment, the strengthening of the positioning of the group on North America -- of North American market. For the Energy-Automation segment, the support on the internationalization of the business activities, where basically our main customers are already operating. For the Trencher business unit, a consolidation of the rental organization also to take advantage of further in -- further opportunities on existing markets. And on the Railway area, the, let's say, some further investments on the diagnostic systems in order basically to strengthen our positioning and also our transition from mechanical solution to, let's say, to more -- much more software-based and digitalized solutions in the segment of the, let's say, predictive maintenance and diagnostics. So just basically, this is to sum up what are the key areas where Tesmec is focused on investing with the value of the right issue. As also said before, let's say, all the plan that we show today and all the figures that Marco showed you in the previous slides are not including any cash-in from the share capital increase. So I guess, it's the time to give the floor to the Q&A part.

Thank you.

Thank you all for the attention. And so let's go on with the Q&A.

[Operator Instructions] The first question is from Alessandro Tortora with Mediobanca.

Yes. I have, let's say, 5 question, okay, if I may, considering the -- a lot of key points you discussed for this business plan. The first question will be related to the rationalization of your product portfolio. Can you give us more detail on this point? Just to understand if you're going to reduce the number of products, if you're going the -- if you're going to simplify, okay, the product code you have. So that we have an idea of what does it mean, okay, this process for you. The second point -- the second question is on the automation. I understood from your presentation that automation is a driver of growth for you. Can you divulge in here in terms of contribution that this new segment will have in terms of turnover, if, for instance, we look at 2023? On -- the third question is on the CapEx side. I understood your target, let's say, a cumulative target to have around EUR 60 million CapEx. Can you give us an idea of which sort of investments you are going to do to the rental fleet. If I remind well, you have almost 60 Trencher, okay, considering also the inclusion of 4Service. Do you plan to increase, is it? Or we can assume that the projection in terms of revenues that you made are based on a stable number of Trencher fleet? The -- I forgot. This should be the fifth one, okay? The fifth (sic) [ fourth ] question is on the working capital. Can you give us, considering the target of debt-to-EBITDA ratio that you mentioned before, what are the assumptions behind working capital on sales you are making?

Okay. I can reply to you regarding the rationalization of the product. And we -- so we have to analyze business unit by business unit. We start from Stringing. The Stringing, we finished our develop of the complete line called digital machine. So we will not have, in the future, the double rental machine, traditional hydraulic plus digital. So the digital range is already developed and tested. And so we are on the market since the start of this year with the new completed product range. If we see -- if we go now on the Rail side, as probably you know, we have basically 2 platforms, one with axle and one with bogies. With different performances on these 2 platforms, we build our complete portfolio. So the platform are basically 85% -- 75% already certified in Europe. So we are finished this year all the procedure for the certification. And after that, the rail product is finished as a research and development. On the Trencher side, we did a big job, big engineering job to utilize also in this sector the platform. So you know that our machines, our product is a multipurpose machine. So we -- it's a modular machine. We have 3 different platform with different performances on which we can assembly different attachment for different applications. All the portfolio is ready now to -- and starting from this year, we don't have any new project, but only, let me say, sometimes tailor-made solutions starting from the basic project. For the automation, I leave the floor to Carlo for product automation. That probably is most important factor of the new situation of the digitalization.

Thank you, Paolo. Yes, for the Energy-Automation sector, of course, it's impacted in terms of, let's say -- let me talk about the Energy-Automation also, going also to your second question, that is the one related to the backlog and to enter into the contribution of the automation on the growth of the business plan. Basically, what is completely different from the past in Energy-Automation business, is that, basically, the last few years where start-up phase, where we focus on certifications of -- with our main customers with the qualification of the different products and basically on the buildup and definition of the product revenue. Right now, we are coming -- we are basically in a different phase on automation that we've seen also on the numbers. In fact, there will be a big -- you will see a big increase also in terms of backlog for the Energy-Automation side. So basically, also from June, a big increase in the number of backlog. So basically, just to give you a quick reply on the question how it will contribute, the Energy-Automation, in the growth of the business plan. Basically, we see the volumes of Energy-Automation increasing by 3x -- almost 3x in the next -- after the 2023. And also, with an increase, a specific increase in the margins that are coming basically from 2 factors, the industrialization of the platform, that is the one that we already discussed many times, and also a big impact on the cybersecurity technology, that is basically totally new trend, say, totally new trend for our technologies that is basically increasing a lot, helping us in increasing also the margins on the single product. I will leave the floor now to Marco for the third question, that is the one related to CapEx.

Carlo? Carlo? Carlo? Sorry, if I may, to better understand, so if you're going to triple your sales, okay, in the Energy-Automation, just to have an idea, this division, how much it will, let's say, represent? Like 10%, 15% of total -- of your total sales? Just to have an idea of the weight of this division, okay, in 3 years from now.

The weight on the -- let's say, will be around, let's say, more than EUR 30 million in revenues and almost EUR 40 million, let's say, in 2023. And this, let's say -- let me -- just to give you a few data on this. Basically, this is an estimation that is based on backlog that is increasing. I guess there will be -- we have already a strong increase in backlog from June to August, and there will be a further strong increase in the month of September. So basically, the volumes that we see in our business plan are already structured and consolidated on, let's say, up to 2022 on the -- thanks to new contracts and new backlog that is in [indiscernible].

Okay. For third question about CapEx, so that view is about EUR 60 million in 4 years. In terms of which kind of investment, okay, we can say that half of this expected by yearly basis are related to the maintenance of our portfolio. So then the standard, the cycle, normal activity concerning the current portfolio, the portfolio that can allow to grow our performance. In terms of rental, we -- our expectation is to replace the sales of Trencher in the rental. So our expectation is a margin increase of the rental and the fleet because we are going to replace which one we are going to sell. So let me say the normal cycle flow in the production -- in the rental and service activities. To replace in this period, we have to replace [indiscernible] because we have some production peak, both for the sales and rental activities. So in this moment, we are to handle to manage this situation. So we don't see a bigger impact in this plan about the fleet. The main part of the CapEx are related to, let me say, standard activity, intangible assets. As I say, we are -- we're working trading around the world. Obviously, our facility needs some equipment to run, to support. But we can say that it is our standard CapEx level. So the fourth question about the net working capital, our expectation is to close the 3 years' plan by 2023 with around 33% of impact of net working capital on sales. How we can reduce this percentage? Obviously, we increased the sale, but the main activity comes from, I can say, efficiency of inventory. But let me say, a flow, a better flow in our ERP organization. And obviously, the reduction of the degree of inventory remains. As I said before, we try to collect a better credit management for each business according to the needs, according to the time, the day of each business. So that is our overview in our net working capital. With important connection with our supply chain, right, in the first -- in 2020, we support our supply chain. And thanks to the new agreement that we are doing -- manage in -- for the stock management, also for the supply stock management, we are going to reduce the impact, this impact. For example, in Energy-Automation and in Stringing division.

The next question is from Enrico Coco with Intermonte.

Three questions, please. The first is a clarification about your financial targets. I think the capital increase is not included in the debt target. So EUR 130 million net debt at the end of this year and then 1.5x net debt-to-EBITDA in 2023. Now my question is, if I include the capital increase, should I decrease the net debt by EUR 35 million or the part that would be subscribed by the main shareholder is included in the plan? This is the first question. So out of the EUR 35 million of capital increase, around EUR 15 million will be subscribed by the main shareholder. The question is if the financial targets include this EUR 15 million, which will be, again, subscribed by the main shareholder of the company. Then the second question is about the profitability. I would like to understand if the growth in EBITDA reflects just the operating leverage of the business, so the growth in sales you have in the 3 divisions? Or the plan includes a cost cutting? And then the last question is about the organizational structure. I read in the press release that you plan to implement a different organizational structure. I would like -- if you could just -- could add more color on this.

Okay. So the first point related to the cash related to the capital increase. As I said before, we said before, the plan is self-financed. So the EUR 35 million are not considered. But to your question in our plan, it's already included in the net equity, the EUR 9.4 million related to acquisition of 4Service Group in April. The remaining part will be Trencher business in our net financial position. So the first question.

About the second question, I can reply. Of course, the growth in -- is supported by a mix of factors. The [indiscernible] is the revenues that are forecast that are made by a different mix of products, more technological products in all the business unit division. So the big effort that we did in the research and development is to have product lines that are not considered like commodities, so to have a less price pressure. And this is the first point. The second one, of course, we are operating also on the efficiency of the structure. We have decided last year to introduce to change our ERP system, and this is the occasion to reorganize after 25 years some internal procedure and to have a better organization for the new -- in the future. So regarding the optimization, I leave the floor to Mr. Caccia.

Okay. Thank you, everybody. It is important for us to clarify again what means the organization for us. No doubt that we are going to be better focused on what are the business with best possible development. No doubt that we came from an [ iron ] company to a technological company. For this reason, our organization will change by giving a stronger push to the area that we are willing to become nonperforming. No doubt that this is basically connected to the CapEx that we have done in this year. And for this reason, we are coming up from a business unit activity, but to a bigger area. But basically, the organization will be more dedicated to market. As we talked about energy, no doubt, we see a strong integration between Stringing and automation. Second step that is really important is what is going on in the railway development that is in a way separate. And mainly, what are the big change that is going to happen is also as a result of 4Service activity. But for that -- for this reason, the Trencher business is going to be more committed to the current activity more than to say. And the value chain approach is going to be a strong push. And for this reason, we are giving new responsibility to management. For this reason, we have new generation coming. As a whole, as you see, the strong position of Mr. Mosconi as a general manager will be a push, and we are going to get Energy division busy and Railway and Trencher organization that are going to be finalized before the increase of equity. This is basically be ready to have a next phase, but is -- due to the -- this increase of [indiscernible] success, we are going to come out with a strong financial company, and we are better focused on profitability and not volumes. For this reason, I think that we are going to communicate in detail the new organization in next weeks.

[Operator Instructions] The next question is a follow-up from Alessandro Tortora with Mediobanca.

Yes. I took, let's say, a chance, okay, for 3 follow-up, if I may. The first one is on -- if you can give us an idea if going forward for the next 2 years, do you see the possibility, considering all the R&D you made in the past years, to reduce, okay, on the taxation side your tax rate and if this is already included maybe in your targets.? The second question is on the return on capital employed, if you can give us an idea of what is your target also on this ratio by 2023. And the last question is related to the next year. Considering that, clearly, 2020 has been a high one-off for you, but to follow, let's say, all industrial companies, can you help us to understand which sort of trajectory do you see in terms, for instance, at least for sales margin, I would say, for the next years, if for instance, we can assume that the company at least will recover in 2020 the level of the pro forma level of sales we achieved in 2019?

About the impact of R&D taxation, for sure, in our -- we have an impact of that, and we are going to review our taxation for the credit related to the development research. So that is impact mainly in Italy, also to do in consideration other rules that are introduced not only this year but also in the previous year, but that is an impact that is going to give [indiscernible] for sure.

One key point, Tortora, we are not making any forecast about these new recovery plans that are going to be applied. No doubt that we are expecting possibly to have [indiscernible] for increase of equity and second point of new opportunity because we are also in the south area for the new possible decisions that are going to be approved by retaining government. That can be a push that is not in our forecast.

They're not included in the plan.

And they have an important impact on our future, okay? About return on equity, if you want? Okay. We are expecting to have a strong payback about the new business. It was what is basically a connection to the decision taken that we are going to do equity. I think that the thing that is easy to understand, for example, in the area of business, we are going to take control in our American branch. That is basically joint, but is not consolidated and this can have a strong impact with a fast payback on our investment. We are now 50-50, and these figures are not in our perimeter. This is just an example of the decision we're going to push. So basically are not high-risk investments, but with a fast payback. About sales margin...

About the sales opportunity in 2020, a [indiscernible] for the sales overview and for the margin we discuss after.

Yes. Thank you, Marco. So we are quite optimistic of the next year due to the backlog that we have and the pipeline of the opportunity, the part of the opportunity that we are working. And so we expect to have 2021 better than 2019 with important growth in both in revenue and in the margins. On the growth of the revenue is, as I told you, due to the expectation that we have supported by backlog and by the feedback that we have from the main markets, some main market in some special countries or areas. And we expect also to increase the marginality because we have a full operator -- we will be full operating with the new product line with a complete -- in all the business lines. So we will have the state of the art of the product, and we expect to have a premium price on all the business.

[Operator Instructions] Mr. Caccia Dominioni, gentlemen, there are no more questions registered at this time.

Thank you, everybody. I hope that our presentation was clear. And anyway, we keep open our -- speak to have a one-to-one discussion for any possible question because no doubt that this is an important decision for that as a shareholder. We -- I confirm that, anyway, we are going to put the first focus around the new management approach to these new [indiscernible]. And I think that we understand that the COVID situation is not easy. We hope that the things are going on right now, but basically does not mean life is easy. But I hope that the situation is going to be stabilized, and I think that we are expecting for next year a better market position. Thank you, everybody.

Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones.