CURO Group Holdings Corp.
Q3 2021 Earnings Call Transcript

Published: 2 Nov 2021

[Operator:]

Hello, and welcome to the CURO Holdings Third Quarter 2021 Conference Call. All participants will be in listen-only mode. . Please note, today’s event is being recorded. And now I’d like to turn the conference over to Matthew Keating, Investor Relations. Mr. Keating, please go ahead.

[Matthew Keating:]

Thank you. And good morning, everyone. After the market closed yesterday, CURO released results for the third quarter of 2021, which are available on the Investors section of our Website at ir.curo.com. With me on today's call are CURO's Chief Executive Officer, Don Gayhardt; President and Chief Operating Officer, Bill Baker; and Chief Financial Officer, Roger Dean. This call is being webcast and will be archived on the Investors section of our Website. Before I turn the call over to Don, I’d like to note that today’s discussion will contain forward-looking statements based on the business environment as we currently see it. As such, it does include certain risks and uncertainties. Please refer to our press release issued last night and our forms 10-K and 10-Q for more information on the specific risk factors that could cause our actual results to differ materially from the projections described in today’s discussion. Any forward-looking statements that we make on this call are based on assumptions as of today and we undertake no obligation to update or revise these statements as a result of new information or future events. In addition to U.S. GAAP reporting, we report certain financial measures that do not conform to Generally Accepted Accounting Principles. We believe these non-GAAP measures enhance the understanding of our performance. Reconciliations between these GAAP and non-GAAP measures are included in the tables found in yesterday’s press release. Before we begin our third quarter update, I’d like to remind you that we have again provided a supplemental investor presentation. We will reference this presentation in our remarks and you can find it in the events and presentation section of our IR Website. With that, I would like to turn the call over to Don.

[Don Gayhardt:]

Thanks, Matt. Good morning and thank you for joining us today. The third quarter represented another period of strong performance as we continue to make significant progress in several key areas of our business, all with the aim of continuing to grow and evolve our company to drive earnings growth and value creation. I'll briefly review some of the highlights from the third quarter. Company owned loan balances grew 77% year-over-year growing 15% revenue growth. Canada's rapid growth continued accounting for over three quarters of consolidated loan balances at the end of the quarter. We started to see significant balance increases in our Canadian POS business related to Flexiti’s previously announced signing of LFL Group, Canada's largest home furnishing retailer, which we expect will help us become Canada's largest buy-now-pay-later POS lender. Flexiti’s loan balances increased 37% sequentially, and origination volume nearly doubled versus the same period a year ago. We continue to experience tremendous loan growth in our Canada direct lending business as overall demand returned to pre-COVID levels our loan balances grew 34% versus the third quarter of last year. Sequential loan growth returned for our U.S. business as absent the run-off of our Verge credit portfolio our earning assets in the U.S. grew 9% from the quarter ended June 30. Our net charge-off rate improved year-over-year, and delinquencies remained at historic lows as customers continue to demonstrate strong credit performance. In addition, with Flexiti’s rapid growth has been primarily Prime customers, we anticipate not only faster balance sheet growth, but also lower overall loan loss rates. Finally, we strengthened our financial position with a highly successful debt issuance. In the U.S. we returned to posting sequential loan growth that was at the high end of our expectations, as we expect to see balances continue to increase. U.S. gross combined loan receivable balances declined 5% compared to the prior year, but increased 4% sequentially. Excluding the runoff of California in Virginia loan portfolios, U.S. gross combined loan balances increased $28 million or 15% year-over-year, and 9% sequentially adjusted overall on the Verge portfolio. The year-over-year increase in U.S. loan balances was expected as the effects of the U.S. federal government stimulus payments from earlier in the year diminished resulting in increased customer demand. We continue to expect improvements in U.S. originations as the economic recovery continues. Consolidated revenue for the third quarter was $209 million, an increase a 15% from the same quarter last year. We reported adjusted EBITDA of $38 million and adjusted EPS of $0.15 per share compared to last year's adjusted EBITDA of $36 million and adjusted EPS of $0.27. Our provision for loan losses grew 29% year-over-year, resulting in 9% growth in net revenue. Roger will have much more detail later, but we think that the credit continues to be very strong. For the quarter our consolidated net charge-off rate improved by 240 basis points, as stable performance in our Canadian direct lending segment combined with the additional lower net charge-off Prime POS book balances were partially offset by increases the U.S. driven by portfolio and new customer growth. Canada net charge-off and delinquency rates remain at the low levels experienced during the pandemic. While U.S. net charge-off and delinquency rates began to trend toward pre-pandemic levels. Normalized operating expenses compared to the prior year pandemic levels, primarily volume related variable expenses and performance based compensation and the operating expense base acquired with Flexiti in March of 2021 through a $5 million decline and adjusted net income. Recapping these segments, Canada Direct Lending’s growth and loan balances grew revenue growth of 35% year-over-year. Revenue growth combined with flat net charge-off rates and operating leverage, resulting in adjusted EBITDA growth of 68% for Canada direct lending. For Canada POS, Flexiti contributed $11 million in revenue during the third quarter, but posted a net loss as expected from provisions on loan growth and increased operating expenses, primarily to support our LSL rollout. Flexiti’s originations increased 174% or C$127 million to C$200 million compared to the prior year’s third quarter, driven primarily by the continued addition of new merchant partners, including the initial LFL volume, and our newest partner London Drugs. It's worth pointing out that revenue tends to lag origination volume or Flexiti because of its lower yields and the structure of some of these products. We expect Flexiti’s growth trends to continue to accelerate as former Desjardins cardholders will lose utility as of December 31 of this year. We estimate that these card holders create the potential for an additional C$350 million and annual volume across the LFL Group financing program. While Flexiti’s focus remains squarely on executing on the considerable LFL opportunity, it also has several other growth initiatives underway, including continually building on it’s established pipeline of prospective merchant partners as it strives to become Canada’s leader in retail payment partnerships. Investing in the direct-to-consumer channel with plans to launch a DTC digital campaign to further accelerate new customer acquisitions, devising strategies including the development of a paying for product to address the sizable small ticket retail market in Canada, which is estimated to include close to 80% of the total retail spend in Canada, investing in programs to serve more non-prime customers. Cross selling initiatives between CURO and Flexiti are already underway. We have plans to roll out a separate Flexiti wave branded card next year that is designed for non-Prime customers. Extending Flexiti’s historically Prime customer base to non-prime individuals represents a true win-win, as it provides non-prime consumers with the credit needed to improve their lives while delivering higher approval rates for our merchant partners, which serves to increase their top line. We are happy to report that both our Canadian businesses are tracking very well to the upwardly revised earnings outlook that we provided in our investor presentation at the end of third quarter. U.S. revenue was basically flat to the third quarter last year as loan balances were still down modestly year-over-year. Higher loan loss provisioning or relative sequential loan growth and more normalized levels of operating expenses for variable costs and performance based compensation resulted in a year-over-year decline in adjusted EBITDA of $8 million. As mentioned on our last earnings call, we made a difficult decision to close 49 U.S. stores during the second and third quarters to manage local store market density and to respond to our customers evolving usage patterns. The closed stores represented 25% of our U.S. store footprint, but they only generated 8% or U.S. store revenue in 2020. The closed stores had annual operating costs of approximately $20 million The majority of our customers at these impacted locations were able to take advantage of our omni channel model and transitioned online to an adjacent store or to one of our contact centers. I'm very happy with the work that we've done on our journey to transform CURO into a full spectrum North American consumer lender, while reducing risk and creating value by diversifying our product and channel mix. Through both organic success and the Flexiti acquisition, we've meaningfully grown in Canada, which accounted for 79% of our company own loan balances at the end of the third quarter. We made the tough decision to rationalize our U.S. store base to best meet customers evolving usage patterns. We continue to invest in new products such as credit cards, which we plan to launch later this quarter in the U.S. And we continue to invest in our internal technology at risk and analytics platform. The strength of these platforms helps us to quickly migrate customers to our online channel, and to continually refine our credit decisioning, creating new product opportunities in all geographies. Finally, as always, I'll close by thanking our 3700 team members who continue to meet our customer’s financial services needs and to help us execute on all of our strategic priorities. I'll now turn the call over to Roger.

[Roger Dean:]

Thanks Don and good morning. Don covered the consolidated and segment loan growth and earnings highlights. So I’ll focus my comments on credit performance and a few other points. Starting with delinquency and credit trends and other key drivers for Q3. I’ll reference page pages six and nine of our earnings supplement deck. Looking at weekly delinquency trends by bucket, both countries continue to see historically low delinquencies although the U.S. began to trend closer to pre-COVID delinquency rates more than Canada. For example, you'll see from the chart that the U.S. pass through rate this quarter was 110 basis points lower than the third quarter of 2019, while the Canadian direct lending pass through rate was 180 basis points better than the third quarter of 2019. Our third quarter consolidated net charge-off rate improved 240 basis points year-over-year, while increasing 70 basis points sequentially. Canada direct lending’s net charge-off rate was basically flat to the same quarter a year ago, and improved 20 basis points sequentially. Canada direct lending’s net charge-off rates remain significantly below pre-pandemic levels. And we expect that trend to continue because of portfolio seasoning, improvements and underwriting and servicing and the underlying financial health of our other customers. The Canada POS net charge-off rate was flat sequentially as expected. Finally, loss rates in the U.S. increased 440 basis points year-over-year and sequentially bouncing off historic lows because of loan growth. You'll see in the MD&A section of our earnings release, that the increase was concentrated in Texas, CSO loans, where balances grew 17% sequentially. The jump started growth along with a related higher ratio of new to returning customers, and origination mix shift from stores to online all caused higher net charge-off rates for Texas CSO volume, which would be expected. It's due to demand mix and growth, not deterioration and underwriting standards or underlying consumer credit quality. Let’s turn next to the provision for loan losses. Allowance coverage rates declined from the fourth quarter more so in Canada on sustained overall improvement and net charge-off rates. Based on the trends we're experiencing, we would not expect to see additional reductions in allowance coverage rates in Q4. On page 10 of our earning supplement, you could see that for the third quarter of 2021 our consolidated loan loss provision was $7 million higher than net charge-offs. Last quarter, that is Q2 of 2021 the loan loss provision was $7 million less than that charge-offs. So sequential earnings were affected by that $14 million swing from Q2 to Q3. Looking ahead to the fourth quarter of 2021, I’ll again point out that we expect sequential loan growth and generally stable credit quality through year end. So we also expect continued normalized provisioning relationships where the low loss provision on loan growth will exceed net charge-off dollars, likely to a greater extent than in this third quarter. With continued sequential loan growth improvement in the U.S. and increases in operating expenses for advertising in Flexiti, Q4 earnings will likely be lower than any quarter this year. We'd expect the more normalized provisioning dynamic to extend for the U.S. business through 2022. We also included on page 11 of our investor supplement, a recap of run rate operating expense levels to assist in analyzing Q4 going forward. We posted an investor update to our IR site on September 28 2021, where we raised our 2022 and 2023 revenue and earnings outlook for our Canadian businesses. These revisions are also recapped on page eight of this quarter’s supplemental investor presentation. Our update was based primarily on better than expected loan growth, resulting in higher average loan balances exiting 2021 and continue to draw on credit quality trends for Canada direct lending. Our revised outlook calls for Canada to contribute pretax income of C$210 million in 2023. We also pointed out that based on this contribution from Canada, and the anticipated post pandemic recovery of U.S. earnings by 2023 we believe we have this ability to adjust EPS north of $3 per share in 2023. Turning to the balance sheet, on July 30 2021, we closed our successful offering of $750 million of 7.5% Senior secured notes due 2028. The new issue replaced our former $690 million of 8.25% Senior secured notes through 2025. In addition to upsizing the offering, lowering the coupon by 75 basis points, and extending maturities by three years, we achieved important flexibility and improvement on several indenture items. Most notably additional flexibility to finance the growth of Flexiti. We ended the third quarter with $206 million in cash and $377 million of liquidity, including undrawn capacity on revolving credit facilities, and current borrowing base levels. We believe this provides more than sufficient capital to execute on several different organic growth opportunities in the U.S. and Canada, while we continue to evaluate M&A opportunities, and maintain return of capital to shareholders, through quarterly dividends and share repurchases. This concludes our prepared remarks and we’ll now ask the operator to begin Q&A.

[Operator:]

Thank you. The floor is now open for questions. . Our first question comes from Moshe Orenbuch with Credit Suisse.

[Moshe Orenbuch:]

Great, thanks. Something you could talk a little bit about the Flexiti non-prime card and the rollout. Just talk about, the scope of the product. And maybe also perhaps the pain for product in Canada seems like two interesting kind of new potential products.

[Bill Baker:]

Yes, good morning, Moshe. This is Bill Baker. Hope you're doing well. Yes, so we think it's a great opportunity with the Flexiti non-prime card. And the reason to have a separate card is really just the customer experience. Because if they're applying for a 0% financing for 12 months, and get declined, but then are offered something in the mid-20s or high-20s. We think it's a better customer experience just to be upfront with the offering so they understand what they're applying for. And then just have a higher approval rate, we think acceptance will be better. And again, the customer journey will be better. So, but we're really excited about how that positions that product and that card. On the paying for component to it that's really a competitive move, because a lot of the competitors offer that, we hear that from the merchants that they would like to offer that to customers. And we think it's a good way to not only retain the merchants that we have today, but attract new merchants in the sales pipeline by having that offering. And it's also I should mention that it's a much smaller purchase paying for is typically going to be like maybe a $300 or $400 purchase, were in the core Flexiti product, you're closer to $1,000.

[Moshe Orenbuch:]

Right?

[Bill Baker:]

And -- apparel and cosmetics and stuff that some of those are better suited for a smaller ticket paying for applications. So that's in development up in Canada right now. So...

[Moshe Orenbuch:]

Just out of curiosity, which you have to, like resign each merchant or your agreements with them, where you could just roll it out? Like, how does, how would that work?

[Bill Baker:]

I think it's covered in the agreements we have, from everything that we do same as cash programs at the very link, so it's really, it's a bit of a variation. And we haven't, we already have a longer term installment product as well. So it's kind of it's covered on the agreements we have. I just think the thing for us is to make sure that we work with the merchants that we tailor that product to the right kind of items that they're that there is, because obviously something that's a 180 days, same as cash, except you're talking about furniture, larger appliances, etcetera, that may work for a longer term installment program. And this is some of the stuff that, affirm, and some of the bigger, bigger final pay later companies in the states, so a lot as well. So, so really, it's working with the merchant partner, tailor a pay in for product to the right kind of product that they're offering, that they're selling.

[Moshe Orenbuch:]

Perfect, that makes sense. Roger, maybe just, kind of any, any sense a little bit more sense as to how to think about the credit normalization and the provisioning normalization over the next several quarters. I know you talked a little bit about Q4, how just how do we think about it, kind of over the course of the next few quarters?

[Roger Dean:]

Yes, I think, I think this quarter was kind of in was indicative of kind of a return to normal for the U.S. business. For the Canadian to Canadian businesses, we're not seeing anything yet, even with the growth, but the growth has been more steady. So we haven't get that crazy dynamic of allowance release and negative provisioning in Canada, so Canada's kind of steady, that the relationship between the provision and loan growth should be stable through next year. For the U.S. this quarter was indicative, quite frankly, as you know, the more we grow, the more the more upfront provisioning, we're going to incur. So I think that I talked about it in the prepared remarks, or delink, the delinquencies have trended back towards 2019 levels. And that was concentrated in Texas, and was driven by just quite frankly, the mix shift to online and, and the percentage of origination to new customers. I think the third quarter is if you take the third quarter relationships between provisioning net charge-offs for the U.S. extend that through next year. I don't, we don't we don't see anything that would indicate that we're going to, we're going to by next quarter return to 2019 levels, but we're trending that way, in the U.S.

[Moshe Orenbuch:]

Okay. Thank you.

[Operator:]

Thank you. And the next question comes from John Hecht with Jeffries.

[John Hecht:]

Morning guys, thanks very much. So real quick, on that 23 guidance? Should we be thinking about kind of the call it the net revenues as a percentage of total revenues minus the provision consistent with kind of pre-COVID levels? Or does the Flexiti acquisition change that mix a little bit?

[Roger Dean:]

Oh, I think yes. I think it changes a lot. John, Flexiti’s allowance rate is 6%. And, and the charge-off rates are in the force. Whereas, the rest of the Canada direct lending in the low teens on the charge-off rate, and in the U.S. runs in the 50%, 60% range. So on a quarter, even on a quarterly basis, so yes, John to your point, that if you look at the relative revenues on the 2023 guidance, and apply to those the provisionally implied provisioning on that it does change it does change the net revenue. It doesn't, it takes a net revenue margin down slightly. But not a lot.

[John Hecht:]

Okay. And then U.S. can you tell us like what the mix of the new customers versus call it, current customers was and credit and anything going on with customer acquisition costs?

[Bill Baker:]

Hey, John, it's Bill. Good morning. So the current AR mix in the U.S. is 18% new customers. And that compares to 15% last year, and 20% in 2019.

[John Hecht:]

Okay.

[Bill Baker:]

And as far as me as far as credit goes, I mean, I think as Don said in the prepared remarks, credit is strong. Now there's no question. You do see some, some mix because of the AR increase year-over-year, also channel mix. So about 71% of revenue in the U.S. is coming online. That compares to roughly 50

[John Hecht:]

Okay, great. Thanks very much guys.

[Operator:]

Thank you. And the next question comes from Bob Napoli with William Blair.

[Spencer James:]

Hi, guys, thanks for taking the question. This is Spencer on for Bob Napoli. I appreciate the color on gross margins. Can you guys provide any accounts on operating margins looking out through the forecast period you guys provided?

[Roger Dean:]

Operate? I'm sorry? You pretax or which margin are you asking about Spencer?

[Spencer James:]

Pretax operating margins relative to 2019 levels?

[Roger Dean:]

By 2023, we're back at 2019 levels. We’re at 2020. Yes, so 2020 was pretax margin was about 12%. This year, we're going to run in the high single digits that we will get back, I think we'll get back to 2019 pretax margins, certainly by 2023, probably not in 2022.

[Spencer James:]

Okay, thank you appreciate it. And then I appreciate you guys have provided some revenue mix for Flexiti. In the past the different components, interest income versus fees, what percent of that revenue is recognized at the time of origination?

[Roger Dean:]

Well the yield, the annual yield is about in the high teens 18%, 19%. And it depends on the merchant, what the mix of that is. At the time of origination, you're not in the first month of origination; you're recognizing one month's worth of that 18%. I mean, it's not there's nothing, the accounting doesn't front load or back load, the revenues. It's even in for lack of a better word, it's even recognition on the port -- whether it's merchant discount or interest or or fees, there's nothing really front loaded or back loaded on the revenue side. It is worth pointing out in Flexiti though that such to the extent that that merchant discount is spread is basically earned up or you get it upfront from a cash perspective. And it's earned and it's amortized over time. It does make a difference between the gap earnings for Flexiti and the cash earnings for Flexiti. This quarter on Flexiti’s that that difference was about C$10 million almost the entire amount if, if you took the it's about half and half the difference between cash and recognized merchant discount was about 5 million for the quarter. And the excess provision over net charge-offs was about 5 million. So if you've added those two back Flexiti was about breakeven on a cash basis for this quarter. This plus a little bit but almost breakeven.

[Spencer James:]

Thank you, appreciate the color.

[Operator:]

Thank you. And next question comes from Vincent Caintic with Stephens.

[Vincent Caintic:]

Hey, good morning. Thanks for taking my questions. It was nice to see the sequential loan growth this quarter across all the different products. And I was wondering if you could maybe describe sort of what you're seeing in terms of customer appetite and customer behavior. And any sort of changes you're seeing or trends you're seeing with these customers. So you talked about the AR of percentage G mix, I guess, wondering in terms of originations, how much of that is new? And is there anything specifically that's driving it sort of maybe just the government stimulus ending or something else? Thank you.

[Don Gayhardt:]

Hey this is Don, morning. So some of the kind of general trends, I think we feel and obviously felt really good about the quarter and just respect to the U.S. are really good about the quarter. Certainly we've been putting more money into the advertising channels. And we would expect to see, the continued kind of recovery of balances as we roll through 22. And I think it, by and large, we feel really good about that, and really kind of have pretty high level of competence in that. Like, that's just the things that we're kind of keeping an eye on. We've said a lot, that the best time to be in this businesses, and this goes for a lot of lending businesses is the first, two to three years after a downturn. And we obviously had a really severe downturn, and we're recovering back from that. The difference about this downturn is that it didn't come with a, a credit cycle downturn. So, that obviously, between stimulus and customers sitting at home, and not spending money on discretionary travel, and dining out, you had a severe downturn coupled with historically great credit quality pretty much across the board for every lender prime, one prime etcetera. So, and that's clearly a anomalous occurrence to say the least. So, we're coming out of not, it's not kind of a normal economic cycle, credit cycle, recovery. So we're just kind of watching how that could influence consumer behavior was coming out of that. And then the second thing is just if you look at, I saw staff the other day that show how serving consumers how they feel about the labor market versus the economy. And we certainly have those separately, they typically those two run together, and what that means that people are feeling good about labor market good about the economy, that's going to drive, a higher level of consumer confidence is, which is what we kind of most closely think that loan demand is kind of tied to. But what's happened now is if you look at the survey data, consumers were really good about the labor market, but there's a big gap between how they feel about the overall economy. And if you look dig into that, it's some of this sort of uncertainty like government policy, and a lot of it, it's uncertainty about inflation. And so wage growth is great. But if wage growth was coming, as a result of inflation, as opposed to just economic recovery, in a labor market, the tightness in the labor market, that that's going to make people a little bit uncertain. And certainly energy prices, etcertera are, and prices pop are going to play into that grocery prices, etcetera. So, I think those are the two things we're kind of watching, both from a kind of a credit standpoint, and a kind of demand and a demand standpoint. But again, those are just those are the, I guess, the kind of qualifiers. But I don't want to detract to the point that we do feel really good about where demand was in the third quarter where it's trending in the fourth quarter, and how we feel about 2022 for the recovery of the U.S. business. So I will be on your second part of your question about the origination new customers? So I don't think we have that a little follow up on that.

[Roger Dean:]

Yes, so right now, if you look at the accounts receivable 18% of the accounts receivable is through new customers that we have never seen before. So not returning, but truly new. And that compares to 15% a year ago, and then 20% in 2019. So getting much closer from a percentage of accounts receivable to where we were pre pandemic.

[Vincent Caintic:]

Okay, great. Appreciate it. And that's very helpful detail. Thank you for that. Separate question and switching over to Canada and Flexiti. So nice to see hear about the different products. Nice to see that list of the different merchants you have on your slides. If possible, if you could talk about, say, the potential pipeline of merchants that you're working on, and maybe even going beyond that, when you think about the potential, I guess, gross merchandise volume that you might get out of Canada and what the addressable market is, if you could talk about that, as it relates to Flexiti, that would be helpful. Thank you.

[Don Gayhardt:]

Yes, so this is Don. So there are continue to be some merchants that are like LFL Group that are that were previously with Desjardins and are sort of up for grabs as Desjardins winds down their point of sale business. So we continue to pursue, some of that obviously LFL was the biggest piece of their -- of that of the Desjardins business, and we've captured that so it won't be anything on that kind of scale. I think we have really good potential in this couple of one is categories like jewellery, which and I think it's really important for us to keep kind of a healthy mix of merchants and merchandise that we're financing. So we're not overly levered to one to one category, but you think something like jewellery where it was during the pandemic was, a lot of jewellery stores were closed. It's not, it's not something that sells as well online versus in the certain items, certainly as in, in the retail stores. So, there's good recovery there. There are some opportunities there for us to, we think to win some business in that category. I think that as well online, we do we have a nice program with Wayfair and Canada; we continue to work with them to increase some of the promotional programs that we can run with them. And we do sponsor away for our cars actually is a brand new wave card in Canada as well. So we're happy with that relationship and hopefully that just the organic growth of that business will be good for us in Canada. I think the other part is we talked about the both the wave card and the non-prime card and giving us an appeal for more sort of brands that are not as high end brands. And particularly in some of the furniture and electronics categories helping the sell through more kind of middle market brands with the wave card is important. And as I mentioned the smaller ticket stuff again apparel, cosmetics something or having a paying for a product or maybe even if it's a, you extend it a little bit beyond paying for depending on the promotion is going to help us a winning 80% of the -- but 80% of retail spend in Canada which it costs kind of small ticket. So I think there's a lot of opportunity in the small ticket world first with a with a paying for product or maybe it's a paying six or paying eight, because you can run a different kind of promotions once you have that kind of functionality in the in the system.

[Vincent Caintic:]

Great. That's very helpful. Thanks for much.

[Operator:]

Thank you. And this concludes the question and answer session. And I would like to return the call to Don Gayhardt, CEO for closing comments.

[Don Gayhardt:]

Yes. Great. Thanks everybody for joining us this morning. Look forward to talking again when we report our year-end 2021 results in early February 2022. Thanks. Bye.

[Operator:]

Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.