TTK Prestige Limited (517506) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Q1 FY '22 Earnings Conference Call of TTK Prestige hosted by Ambit Capital. [Operator Instructions] Please note that this conference is being recorded. I'll now hand the conference over to Mr. Dhruv Jain from Ambit Capital. Thank you, and over to you, sir.

Thank you. Well, hello, everyone. Welcome to TTK Prestige's 1Q FY '22 Earnings Call. We have with us the management of TTK Prestige. They are represented by Mr. T. T. Jagannathan, Chairman; Mr. Chandru Kalro, Managing Director; Mr. Shankaran, the Whole-time Director; and Mr. Saranyan, the CFO of the company. Thank you, and over to you, sir, for your opening remarks.

Thanks. Good afternoon, ladies and gentlemen, and thank you for coming. We've had a reasonably good quarter considering all the major challenges that this quarter had faced, a lot of them actually is almost for the better part of the quarter, unfortunately. We've had the lockdowns for practically the same amount of time as last time, though in a very different way. And yet, we've managed to clock 71% growth in top line, and there's a very substantial growth in the bottom line. And this is in spite of the fact that we've also had the challenge of the raw material price increases. And the good thing is that June ended on a very positive note. So we've got a good outlook for the coming quarter as well. I now look forward to your questions as they come about. Thank you.

[Operator Instructions] The first question is from the line of Ravi Swaminathan from Spark Capital.

My first question is with respect to the raw material inflation. So basically, have we taken all the price increases that is required to offset the raw material price inflation across all the product categories?

Yes. Yes, we have.

Okay. And so there would be no further price increases needed assuming the current raw material prices?

Yes. We have taken a compensatory cost price increase based on the raw material prices currently.

Got it, sir. And if you can give the share of e-commerce sales, what percentage you said as the overall percentage of your sales this time vis-a-vis last time? I mean if you can give a sense on how it is growing, it would be great.

So last year, the e-comm share was 24% throughout this quarter. And this year, it is 32%.

So 32% of the overall revenue of e-commerce as of now?

That's right.

Got it. Is there any big difference in terms of trade, say, in terms of profitability or something of that sort with respect to e-commerce vis-a-vis the regular channel? Any blend numbers?

So you have seen, our gross margins are actually expanded during this quarter as compared to the last year same quarter. And there is, of course, a slight difference in the margins between channels, but they are largely under control.

Got it, sir. Got it. And ad spend, so basically, how is it this quarter vis-a-vis the normalized quarter? So basically, is it still on the lower side or ad spends have come back to the regular spend, which we do normally?

So we normally have a straight line kind of -- we normally spend about 6%, 6.2% of our revenues on ads. However, you know that for the good part of this quarter, we haven't been able to spend that money, but we've committed that money towards the end of the quarter. June has seen a start in spending, which will continue. So the campaign is between June and July. So the ad spend, we are expecting it to go back to normal as we go along, and we're also seeing the demand to be normal like last year.

Got it, sir. But is there a possibility of -- I mean, other brands, some of them are talking about ad spends not going back to the previous level because some of them have moved digital and all these things. So is there a chance of ad spends, over the next 2, 3 years, sustainably being lower than the 6% of top line and say, 5% or even lesser?

We cannot answer for other brands. But I can tell you that the digital has become an add-on to conventional media because we cannot actually substitute one for the other yet. Of course, our digital spends are expanding while the other conventional media spends are not, but we believe that we will consistently try and build the brand as we have always done so far because that is what has kept us growing sustainably.

Got it, sir. And my final question is with respect to the overall growth. What kind of growth can we expect in FY '22? Can we see double-digit kind of a growth? Are we looking at that figure?

Well, we should look at that figure, but I would refrain from giving a specific guidance at this point in time. But yes, we are looking at a positive growth at the double digits. You know that we've grown by 71% for the first quarter.

And we don't know about any third wave.

And who knows about the third wave. So it's difficult to give a guidance, but things are looking all right. If there is not third wave, we will grow at double digits.

The next question is from the line of Sameer Gupta from IIFL.

Sir, my question is specifically on gross margin. So if I look at 2-year period, 1Q FY '20 versus 1Q FY '22, there is a 200 bps expansion in gross margin that we have seeing. And during this period, it has actually been only cookware segment, which has seen positive growth. And cookers, which is our biggest margin -- gross margin product has actually suffered the highest decline. And both aluminum and steel prices, during this time, are up by more than 50%. So what exactly is -- am I missing? What exactly is the source of this gross margin expansion? And does e-commerce channel have materially different gross margin?

No. It is not like that. You're right that the cookware sales has expanded while the cookers hasn't. And in fact, the cookers have actually declined. But the cookware margins and the cooker margins are comparable. They're not different. Actually, they are not -- in fact, the cookware margin is exactly the same as the cooker margins. The expansion that you are seeing is because we have had some level of channel mix and product mix that has happened. And I think over the period, you have to look at these things over a year. And I don't think you -- this is all evened out is what I'm saying. I've already told you that we have taken the price increases to offset the cost increases.

Yes, sir, and I understand that. Just to dwell a little more on the channel mix and product mix aspect. So margins across channels, are they very different?

They are different. But normally, what happens is there is a -- there are a couple of channels which are at one end, and the other end with another couple of channels. So normally, when one goes down, the other goes up, so it kind of balances out. So we've always managed to achieve that balance, and that is what you are seeing.

Got it, sir. And when we say product mix, it is probably the higher or the premium kind of products that are doing well within, let's say, a cookware or a cooker. Is that [ an assumption ]?

Absolutely right. Absolutely right. And we have also launched several new products during the last 7, 8 months, which are also healthily contributing to the cookware business.

Okay, sir. So to that extent, the channel mix probably stabilizes at a more normal level. There might be some risk to margins. Is that -- that would be the understanding, right?

There is no risk to margins. All I'm saying is that it will balance out. They are marginally different. They're marginally different. Yes.

Okay. Got it, Sir. Then it's -- that's only premiumization, then. Okay, sir.

What do you need -- yes, there is a premiumization. And what you need to know is in the company and the brand are strong enough to pass on the cost increase.

Yes. Yes. That is -- but still, there is an expansion, right? That is a...

Yes. Yes, yes.

The next question is from the line of Aditya Bagul from Axis Capital.

Congratulations on a very good set of numbers. Sir, my questions are on essentially trying to understand the channel mix. You said 32% of our overall sales comes from the e-commerce segment. I just want to understand, how has been the growth rate in the other 2 channels or 3 channels that we can -- our traditional channel, the brick-and-mortar channel versus the modern trade that we have? You can help us understand the issue. That's our question, please.

Yes. The way to look at it is, you must remember in this quarter that a large part of the offline channels were not able to open because of the lockdowns in various states. Now, in spite of it, I'm happy to tell you that all the offline channels have shown robust growth, high double-digit growth across the board. And the e-comm, obviously, has grown faster because e-comm was on right through the quarter. So that is why you are seeing a higher proportion of e-commerce during the quarter. But as I think everything opens up, it will kind of normalize back at that 25% is what my estimate is.

Sure, sir. Sir, my second question is actually with regards to a comment you've made in your presentation. You've mentioned that this time around, the impact of COVID second wave has been quite ubiquitous within the rural regions as well. Hence, the growth rate might suffer during the next part of the calendar year. Can you help us understand that a little more as to what are the trends you're seeing? Also, if you can help us understand, if there is a temporary disruption due to monsoon in the western part of the region?

We are looking at all of these as very temporary and transient disruptions, nothing serious over here. In fact, while the COVID was rampant in -- across the rural areas also, you have also seen that the recovery rates are in excess of 98% as we speak. So we believe that everything is going to bounce back as it has already indicated to us in June, and even July profile.

Understood. So sir, is it fair to say that July run rate is tracking last year's July or July 2020? [indiscernible]

Well, I'm glad to say that we are better than that.

The next question is from the line of [ Shanti Patel ] from [ Shanti Patel ]Investment Advisors.

Yes. My simple question is, what will be the return on capital employed as on 31st March 2022? And what will be the return on equity as on that rate? I mean you can give some guidelines.

Do you want the guidance for 31st March FY '22?

That is correct.

We hear it clear, more than 35% ROCE, after removing the treasuries out of it. It will be better than this year. I cannot give you any confirm number because [indiscernible].

Is there a [ equity ] approximately. I mean looking to the present situation, what your judgment is?

Our judgment of first quarter ROCE is better than what was last year. What is your judgment around COVID details. Will there be a third wave?

No. Let us say, there is no third wave, then what will happen?

Overall, let us say, the ROCE, we had healthy ROCE last year instead of a bad first quarter.

It will be not [indiscernible].

It will be better than last year in terms of the ratio of EBITDA on the capital employed. I can't give you numbers. We won't be giving the full guidance.

I'll tell you one thing. You can see that there's been, over the last 3, 4 quarters, a steady improvement in the balance sheet numbers. I think that you will expect. And as we are going along, that trend is continuing.

Okay. And what is our market set in respect of various verticals if you have 2 states?

So we have multiple categories that we operate in. We have pressure cookers, cookware, we have mixer grinders, gas stoves, we have so many categories. So the point is that we are presently leaders in all the 5 out of the 6 major categories that we operate in. We are not leaders only in mixer grinders. We are working towards leadership there.

[Operator Instructions] The next question is from the line of Koundinya Nimmagadda from JM Financial.

Just a couple of questions. Sir, firstly, can you comment a little bit about the working capital and cash flows in the quarter, and also the current channel inventory levels?

Sure. The working capital has gone up this quarter because we've had production, and we didn't have sales for some part of the quarter. And we have taken a very prudent decision to continue with the production because we didn't want supply chain disruptions like last year. So therefore, we have seen a working capital increase, which we believe is good for us. Secondly, we've also kind of hedged ourselves by adding to our raw material inventory. And therefore, we are hedged for the second quarter also, which is also good news. In terms of channel inventory, the channel inventory is normal like it was in Q4. And overall, last year, we have seen a reduction in channel inventory over the previous year, and we want to keep it that way because we want our collection going well, which is what is happening.

Understood, sir. Sir, secondly, can you comment on the sales mix from different regions like East, South, North and West given the impact of COVID wave in the Eastern and Southern markets? And how have we fared in each of these markets?

The good news is that all zones have grown very substantially. Of course, the South has grown lesser than the other zones, relatively speaking, because the South was more impacted by lockdowns for a long period of time. Even as we speak, Kerala is in lockdown. So -- but all zones have grown very substantially during this quarter as compared to Q1 of last year.

Understood. Sir, if I may squeeze in one last question. What is the quantum of price hikes that we took, sir?

The last price hike that we took on select products was between 5% and 6%.

And when was this, sir?

We have just announced it in July, actually.

The next question is from the line of [ Vipin Goel ] from [ Mirabilis ] Investment Trust.

I have two questions. Sir, first one, as you mentioned that the gross margin increase was first due to the mix of premium products within category going up, that is one. And then, second one was the channel mix. So my question to you is that this change in behavior of premium products coming in higher in the mix, so like is it a structural change or is it in some way relation to the COVID disruption, like the way we are seeing this in channel mix?

See, we believe very strongly that, as I said -- even in the answer to the previous question that this will kind of balance out during the year. Obviously, when we are launching new products, there is a launch volume that will go in, et cetera, et cetera. Structural or not, I think we need 2, 3 quarters to see. But there are certain trends that are clear, and those trends are that people are moving towards better products because they are using their kitchens more than ever before. There are trends that there is an overall movement towards brands. And that is on, and we have seen that on for the last 12 months.

Okay. Okay. Okay, sir. And then second one, I think you mentioned in the inventory remark. But then, just to like reclarify that, we didn't have any production-related issues in the quarter. And...

We did. We did. Our Tamil Nadu factories were closed for almost a month because of the lockdowns.

Okay. Okay. But now, the production has started, and that was the reason like our channel inventory was higher because we want to like catch up on the sales, say, if in case they come up in the next quarter once things open up.

Yes, and no because If we could have helped it -- if the production was allowed to happen, we would have produced in Tamil Nadu also. And that is something that we have actually supported [ IT ] costs as I think we've written in the summary of the performance. That is the way. But I think, as I said, it's good that we have the stock right now.

The next question is from the line of Bhavin Vithlani from SBI Mutual Fund.

Congratulations for a good set of numbers. Sir, we have a couple of questions. One is, if you could highlight the market growth for cookers, cookware and gas stoves in the quarter? And what is the trend that you are seeing from organized to -- unorganized to organized shift?

I will not be able to give you numbers for Q1 because those numbers are not yet out from the research agencies. That is the first point. As far as the last year is concerned, we have seen at least 2 to 3 percentage points shift from unorganized to organized as we are seeing in the general trend. That is something that we are seeing as a trend. In terms of category growth, we are -- you are looking at a very, very disturbed set of 5 quarters, so I don't think we can take a position right now. But I think we are still looking at a positive and robust growth situation for brands as we speak.

The second question is, I mean, I'm referring to the presentation where you've kind of outlined the new products, especially the Svachh burners that you've highlighted. Now if you could highlight how -- what is the level of premium that the company will be charging for these? And will this also aid to our profitability going forward?

So the Svachh range of gas stoves, which we have launched, in our opinion, are an absolute positive disruption in the category. It will give enough reason for people to upgrade to this gas stove because it's a great new level of convenience that the customer can get. Regarding the premium on this, obviously, the product is at a premium over the lower level of products that we sell. But it's not an unjustifiable premium. It's at the -- so we have 8 gas stoves. This is around at the same price. Our pricing strategy on our innovations have still been cost plus because we have tried to target a market share gain through our innovations rather than just milking up innovation in terms of price.

Okay. I think last question from my side. The observation has been that the Maharashtra factory still remains shut after 8 to 9 months of lockdown. If you could give us some outlook and guidance on that, that will be very helpful.

So we are in constant discussions. The matter has gone for mediation at the level -- assistant level, commissioner level. And there are meetings that are happening regularly. Obviously, there is -- nothing has been fruitful yet. But I can tell you that we are making some headway, but it's very difficult to predict when we will come out of this.

But we are -- we have other plans. So we will not suffer for any separating issues.

The next question is from the line of Achal Lohade from JM Financial.

So my first question is, in terms of the exports, we have seen a very strong growth in this quarter. So how are you looking at the export? Is there any new customer addition here or just an increase in terms of the exports value from the same set of customers? And with respect to our region statement about INR 5,000 crores revenue, in the last call, you had indicated that we are about 12 to 18 months behind the schedule. So now would you maintain the same or is there any shift in that?

So I mean, we are consistent from what we said in the last call, except that we have 1 more quarter of lockdowns, as you know. As regards to the export, I think it's a bit of both. We have had new customer additions as well as increased offtakes from the existing customers. In fact, our exports could have been even better had we got all the containers that we required. You know, there is a huge container shortage as we speak. The export pipeline is looking quite robust.

So would you be able to give any indication what kind of export mix we could have, let's say, for FY '22 or FY '23, sir, basis the pipeline or indications we have?

Basis the pipeline, we can tell you the growth rates that we had specified last time in the call, those we are on line to achieve.

Right. And this is largely for cookware, or is it for cookers as well, sir?

Both. Both. In fact, now we have also started exporting a bit of electric appliances, also.

Great. And just one more question, if I may, sir. With respect to the contribution from the Judge brand, would you be able to give some sense as to what was the contribution? And how are you looking at this from, let's say, 2- to 3-year perspective as we see that we're going to step up on the branding for Judge as well?

So the Judge brand currently is very small compared to the overall business, and that is by design. However, there are a lot of things that we are doing for the Judge brand itself. In terms of product strategy, we have a new website that has just come up. We have a new marketing strategy for it. The idea is to play in segments where we don't want Prestige to play. And that is the strategy and that is well on course. We expect the Judge brand to be a tactical brand for us and not trying to -- allowing it to cannibalize into the Prestige business.

No -- I mean no comment on what kind of mix would we look at, let's say, a 3-year perspective, 3- or 5-year perspective? Would that be 15%, 20% of revenues or not really, no?

I don't think we are looking at more than 10% at this stage, but it's premature to talk about that.

It's [ always ] 2%.

As of now, it's very small.

The next question is from the line of [ Heman Shanaya ] from [ Yash Securities ].

Firstly, sir, in terms of understanding the success of our product innovation, could you share some numbers as to how much would our contribution be from new launches, the way you track it, maybe, say, in the last products launched, in the last 1 or 3 years?

So let me give you a flavor for this. It's very difficult to put a percentage because we launched so many new products across categories. Our entire cooker range now has gone into Svachh. The last 20% also now, we are replacing with the Svachh. So actually, our pressure cooker range from next quarter onwards will be 100% in the new platform. I'm just giving you a flavor. The Prestige, in the cookware business, our granite cookware, which is the only 5-layer coating, contributes to over 50% of the total cookware business in the nonstick side. The other cookware, in fact, we have now stainless steel cookware, we have cast iron cookware, the hard-anodized cookware, close to more than 50%, 60% of that segment is coming from the new products. Gas stoves, we have just launched the Svachh platform, and we expect that things will move towards that very soon. Mixer grinders, almost 70% of our sales is coming from models we've launched in the last 2 years, so on and so forth. I can go on and on and on.

Understood. Understood, sir. And sir, second question would be on our distribution expansion. So do we have a specific plan in place? I mean do we feel that we are weaker in, say, certain geographies where we want to increase our dealer network, or even in terms of our exclusive stores. I mean could you highlight our -- give some more color on our distribution expansion, both on the dealers' front and our own EBO network?

The last 4 quarters, as we have been telling you consistently, we have been adding to our distribution. In fact, last year was one of our best years in terms of new outlet additions. We've added more than 7,000 outlets. That exercise is going on. Even though there are lockdowns, we are kind of mapping markets, mapping new territories, mapping potential territories, et cetera, et cetera. It's a continuous process. Aside of that, the times we live in, I think there are newer opportunities to reach product to consumer, which we are taking into account. So the rural channels, the MFI channel, the -- there are B2B online channels like Udaan. There are several, several, several new opportunities, which we are using as we speak. There is a heightened focus on ensuring that our own exclusive branded outlets are also growing aggressively. So in spite of the lockdown, we have added to the network, in the first quarter, as you are seeing. We will continue that effort as well. We have also started our own company-owned store strategy where the costs do not justify franchising. We have over 6 outlets now, and that is another process that is going on. So a distribution expansion is a continuous process.

[Operator Instructions] The next question is from the line of [ Namit Mehta ] from KC Capital.

Just a couple of questions from my side. One, I just wanted to get your perspective on how e-commerce will change the business dynamics and competitive position to an extent. Are you concerned that the horizontal platforms in which these products are put up allow for easier market entry and greater competition in the long run?

Well, that is true if we don't change anything else. And as a brand, as you know, we are highly innovation-focused. We come out with new products all the time. We have our own fulfillment centers. We are developing our own websites to make sure that we participate in the e-commerce channels. So it is a balancing act, and I believe there is more of an opportunity rather than the problem, and that's what we are taking it as.

Great. And on the innovation point, I know that we are trending towards outsourcing more and more of our products. How does that impact our innovation cycle? Does it -- is it a little more difficult in terms of coordination versus some of our competitors who manufacture in-house?

No, not at all. In fact, we have very dedicated vendors, largely exclusive to us. We have a very strong product development department, which actually gives our own proprietary designs, which we then get it made through them. So there's a very, very well-owned process that is there. And in fact, this has been extremely efficient way of doing it.

[Operator Instructions] The next question is from the line of [ Varship Shah ] from [ Habrok Capital ].

Yes. Sir, could you speak about our premium products range? Like how the Prestige-exclusive store is doing? What's the long-term plan there?

I just said that we were trying to add to our range very aggressively and add to the number of outlets that we have very aggressively. I also said just now that we are moving into a company-owned store strategy where -- in larger cities where it's difficult to franchise. So there's a very aggressive strategy on the exclusive business outreach.

Okay. And these stores will have completely different range of inventories compared to our other...

So you are speaking about the Prestige Lifestyle stores, the new format stores? Yes. It's too early to say. Because, again, the lockdowns have hit us. So we will come back to you with the strategy on the Lifestyle stores maybe a quarter later.

And these are on the experimental stage.

Yes.

The next question is from the line of Achal Lohade from JM Financial.

Yes. Sir, my question was with respect to the South, given what you've said, better part of the quarter was kind of lockdown, so how is it evolving now? And do you see the kind of pent-up demand we've had last year? Would we see similar things kind of getting repeated, or this time around, it's somewhat different according to you?

Well, the initial indications are that it will get repeated because what we are seeing, for example, in Kerala is that they were -- for last -- 2 weeks back, they were open 3 days a week in some markets. And what we were hearing was that they had exactly doubled the crowd on the days they were open. So it is -- the initial indications are that the demand is very good.

Understood. And in terms of the margins, I know there is an element of seasonality as well. So how do we look at the margins? Because if we see last third and fourth quarter, we have had 17%, 19% kind of a margin. So from an annual number perspective, earlier, we were kind of hitting 15-odd percent. So what kind of operating margin can we look at assuming your thought base?

So there are 2 assumptions you have to make or 3 assumptions we have to make to say anything in that direction. You to then assume what the raw material prices are. We have to do the balancing act on how much we can pass on -- so far, we have been able to pass on. There's a lot of assumptions, but it's safe to say that we can maintain the same similar kind of margins on -- in a band of plus/minus 0.5% or 1%, even this year.

Understood. And with respect to the price increase, for the first quarter, on an average, what would be the price increase we would have had from September '20?

From September '20.

Yes. I mean initial round of -- I mean, since we started taking the price increase, given the cost inflation.

So it'd be between 8% and 11%, depending on what category you're talking about.

And I presume, in appliances, it would be even higher double-digit compared to cooker cookware?

Let me tell you the averages, on cookware and kitchenware, we actually took it up only by 5% last year. And the balance was in appliances. So you are right about what you're saying.

Right. So if I look at the revenue numbers from a 2-year perspective, I see that we've had a kind of a volume drop. I know it's hard to add volumes like that. But for each of the category, would it be fair to say that we've had kind of a double-digit drop in volumes, given the impact of lockdowns?

No. It varies from category to category. For example, in cookware, we've actually had a growth in spite of everything. In cooker, yes, you are right, there is a drop. Again, that is primarily because of the lockdown. It's not comparable. I would tend to look at this from the 9-month run rate that we had last year. And that was a good run rate, and got our best-ever run rate. That kind of run rate looks like it's going to come back.

The next question is from the line of Bhavin Vithlani from SBI Mutual Fund.

We're seeing strong growth in the cookware as a category. If you could give us some outlook on what exactly is changing from the customer side, or this is more to do with the company's own internal newer products and certain products that we introduced, which are more specific to the company?

So in cookware, nonstick has come back into fashion because people have understood the need for nonstick cookware, so that's growing. We, ourselves, have launched several new subcategories, which is also adding to the growth, for example, our focus on stainless steel cookware, our focus on cast iron cookware. We have launched newer products in hard advertise cookware. We've launched strike like cookware. So there are a lot of new segments which we have bought into, which is also causing the increase in the cookware business.

Understood, sir. The second question is, if you could give us the mix on the channel, the conventional channel? What was it in the quarter? Also, what are you seeing as a percentage of sales from our Prestige-exclusive outlets?

I wouldn't want to give you the percentages of all the channels, given the competitive sensitivity of the matter. But I can tell you one thing that once all channels start operating, we are looking at the e-comm stabilizing at about 25%. We are looking at our own retail stabilizing between 15% and 17%. That's what we are looking at.

Sure. Fair enough. And what would be the mix of South, non-South? As you mentioned that South, we did see disruption and that is continuing further, sir.

It's 45-55, I think. But nowadays, it's very difficult to put a finger on this because there's a lot of e-comm sales that happens. And that kind of cost has bought us sometimes, depending if there's an FC, which is not available in the South, if you go somewhere else, then it comes back. So there are lots of new dynamics that have come in. But safe to say it's about 45-55.

Sure. Just last question from my side. In your presentation, you have outlined the newer category of homes, and a number of new products that you have launched. These would be through the conventional channel, or these will be more through the Prestige-exclusive outlets?

Depending on the category, if there is a mass product, we will distribute it mass. If it is a niche product, then obviously, we will distribute it either through our own exclusive branded outlets or some high-end retailers or some large format stores or maybe just e-commerce. It's all category-specific.

[Operator Instructions] As there are no questions from the participants, I would now like to hand the conference over to the management for closing comments.

Yes. We expect to have a much better 9 months as compared to last year. And in any case, this presentation and whatever we've told now has got some sort of futuristic statements, which are the intention of the management. The success in making those quotes depends on various factors, both internal and external, where I encourage all the stakeholders to [indiscernible] trust in [indiscernible]. Thank you.

Thank you. On behalf of Ambit Capital, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.

Thank you so much.

Thank you.

Yes. Bye-bye.