Oatly Group AB
Q4 2023 Earnings Call Transcript

Published: 15 Feb 2024

[Operator:]

Good day, and welcome to the Oatly Fourth Quarter 2023 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Brian Kearney, VP of Investor Relations. Please go ahead, sir.

[Brian Kearney:]

Good morning, and thanks for joining us today on Oatly's fourth quarter 2023 earnings conference call. On today's call are our Chief Executive Officer, Jean-Christophe Flatin; our Chief Operating Officer, Daniel Ordonez; and our new Chief Financial Officer, Marie-Jose David. Before we begin, please review the disclaimer on Slide 3. During this call, management may make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our future results of operations and financial position, industry and business trends, business strategy, market growth, and anticipated cost savings. These statements are based on management's current expectations and beliefs and involve risks and uncertainties that could differ materially from actual events or those described in these forward-looking statements. Please refer to the documents we have filed with the SEC for a detailed discussion of the risks that could cause actual results to differ materially from those expressed or implied in any forward-looking statements made today. Also, please note on today's call, management will refer to certain non-IFRS financial measures, including EBITDA, adjusted EBITDA, constant currency revenue and free cash flow. While the company believes these non-IFRS financial measures will provide useful information, the presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with IFRS. Please refer to today's release for a reconciliation of non-IFRS financial measures to the most comparable measures prepared in accordance with IFRS. In addition, Oatly has posted a supplemental presentation on its website for reference. I'd like to now turn the call over to Jean-Christophe.

[Jean-Christophe Flatin:]

Thank you, Brian, and good morning, everyone. Slide 5 has the key messages that I want you to take away from today's presentation. First, 2023 was a pivotal year for the company, where we focused on stabilizing and recalibrating our business. We have achieved a lot last year, including fully funding our business plan by raising $465 million, conditioning our senior leadership team, taking actions to right size our SG&A structure, doubling down on our asset-light supply chain strategy by entering a long-term strategic partnership with Ya Foods, as well as discontinuing the construction of the production facilities in the U.S. and the UK, both of which will help us better focus our operations, while having appropriately timed expansion and capital efficiency. And we also increased our focus on the most profitable parts of our business to ensure that our growth will be profitable and sustainable. We did this all while improving our financial profile and we ended 2023 with a solid fourth quarter where both top and bottom-line results exceeded our expectations. As we look forward to 2024, our financial guidance reflects solid top-line growth, while delivering significant bottom-line improvement, as we maintain our focus on driving this business towards profitable growth. Specifically, for the full-year 2024, we are guiding to the following

[Daniel Ordonez:]

Thank you, JC, and good morning, everyone. I'll begin my discussion on Slide 11 with EMEA, which is our largest operating segment. The EMEA segment had a strong 2023 and it finished the year with a solid quarter. Constant currency net revenue growth was just below 12% in the quarter. Some customers bought product ahead of our price increases last here, which drove a strong 11.5% volume growth in the year ago period. This impacted the year-over-year growth. And however, looking through that, we continue to see this business as quite strong and the retail scanner data I will present shortly to support exactly that view. The segment's adjusted EBITDA margin improved to 15.9% in the fourth quarter, with capacity utilization just in the mid-70s in the quarter. We continue to believe this segment continues to have room to improve margins. Turning to Slide 12. On the left, you can see that the category growth remains healthy with oat drinks growth of 11%. On the right, you can see that throughout the year, we have steadily gained market share in our largest established markets. We're very proud to say that during the second half of 2023, we have achieved the number one market share in all plant-based milks in Germany, Austria, Switzerland and in the Netherlands. This is quite the feat, given that we only sell oat milk, one crop and not multiple crops but other plant-based milks. On Slide 13, you can see some of the progress we have made in our new markets. Our strategy is to enter these new markets by first entering the specialty coffee channel to create the oat milk category, the phenomenon in each market. These cafes are purely focused on super high-quality coffee and the coffee experience and they are the cutting-edge of the coffee culture. By demonstrating our product quality and establishing trust within its community, we build our brand's credibility and value proposition. As you can see, our strategy is working. We are already selling our products at a significant portion of these coffee specialty cafes in our new markets, with most countries over 60% represented. Going forward, we plan to continue nurturing these relationships while expanding beyond this channel. Now turning to Slide 14, where we will start looking ahead at our plans for the EMEA segment. In 2024, we are planning to launch several exciting new products that will help round out our coffee portfolio. A decade after the introduction of the iconic Barista Edition that defined the rules of the game in this category, we're stepping up on our mission to drive further conversion away from cow's milk and into oat milk, by making it easier and more accessible for our consumers and customers with new innovations and new formats. Specifically, we're launching the following

[Marie-Jose David:]

Thank you, Daniel, and good morning, everyone. Slide 27 gives you an overview of the P&L for the quarter. We reported 4.6% year-over-year revenue growth and constant currency revenue growth of 2.5%. This was above our expectations, driven by outperformance in our EMEA and Americas segments. Gross margin for the quarter was 23.4%, which is a 750 basis points improvement versus the prior year quarter and the 600 basis points sequential improvement from Q3. Gross profit dollars were in line with our expectations, while the percentage margin was slightly below our expectation, partially driven by an unfavorable mix impact. Adjusted EBITDA was a loss of $19.2 million, which was ahead of our expectations. This was $41.2 million improvement versus the prior year and $16.8 million improvement versus the fourth quarter. Slide 28 shows the bridging items of our quarterly revenue growth. You can see volume increased 2% and price mix improved by 0.5% for a 2.5% constant currency revenue growth. Foreign exchange was a tailwind of 2.1%, resulting in 4.6% total revenue growth for the quarter. Slide 29 shows the revenue bridge by segment. EMEA continued to report strong growth with 11.8% constant currency revenue growth, led by 11.3% price mix improvement, which was driven by the price increase we took last winter and we started to anniversary this quarter. Americas, 2.4% growth was driven by 9.2% volume growth, which was aided by distribution gains and selling of our new products. Price mix was a headwind of 6.8%, driven by new product-related slotting as well as customer mix. Asia's 18% constant currency decline was driven by the actions we have taken as part of the segment's strategic reset plan. Volume declined 3.3%, which is a significant improvement for the fourth quarter's 15% decline. Price mix declined 14.7%, largely driven by unfavorable sales mix as we rationalize SKUs that were higher priced but lower margin. Slide 30 shows you the sequential quarter-over-quarter gross margin bridge. The year-over-year bridge is provided in the appendix of this presentation. The largest driver of the sequential improvement in gross margin is the 490 basis point benefit from Asia strategic reset. As Daniel mentioned, this is a combination of cutting low margin SKUs and driving increased efficiency in the supply chain. Within EMEA and Americas, we saw a 60 basis point positive impact from pricing, net of trade spend and that was offset by a 250 basis point headwind, primarily from customer mix. We also saw continued benefit from supply chain efficiencies coming from absorption and America’s co-packer consolidation, all of which drove 270 basis points improvement. Slide 31 shows our adjusted EBITDA by segment. As you can see, each segment reported a significant improvement compared to the prior year for both the quarter and full year. Also, the fourth quarter was the first time that the sum total of the adjusted EBITDA for the three regions was positive. It's clear that the bold strategic actions we have been taking are driving results. Quarter-after-quarter, we have been executing our plan, improving the business and driving the business towards profitable growth. Turning to our balance sheet and cash flow on Slide 32. Overall, our liquidity position is strong and we are continuing to improve our free cash flow. The left hand chart shows our liquidity position at the end of the quarter. We ended the quarter with $454 million in total liquidity, comprised of $249 million of cash and equivalents and $205 million of undrawn bank facilities. The right hand chart shows that we have made good progress in improving our free cash flow. In the fourth quarter, free cash flow was an outflow of $31 million. As I have said previously, improving our cash flow is a priority for me, and our organization is very focused on it. As such, we expect our cash flow to continue to improve, driven primarily by improvement in adjusted EBITDA and aided by improvements in working capital metrics as well as optimized capital expenditures. Slide 33 shows you our 2024 guidance. Our 2024 outlook reflects the continued impact of the actions we have been taking to build a stronger business and set ourselves up for strong, sustainable long-term profitable growth. Turning to details. We expect constant currency revenue growth in the range of 5% to 10%. We expect currency to be a small headwind. We expect the second half constant currency growth rate to be stronger than the first half, largely driven by volume growth acceleration in each region. For adjusted EBITDA, we expect to report a loss of between $35 million and $60 million in 2024. At the midpoint, this would be a year-over-year improvement of over $100 million from where we landed in 2023. We expect this improvement to be driven by an improvement in gross profit dollars with some benefits coming from SG&A as we continue to deliver on our communicated cost reduction program. We expect adjusted EBITDA dollars to be stronger in the second half than in the first half. We expect the increase in gross profit to be primarily driven by sales volume growth. We also expect the benefit from certain lower cost, which is partially driven by easing inflation in certain inputs but also driven by our supply chain, eliminating costs through productivity and efficiency programs. While we believe that the business continually improves, our guidance range for adjusted EBITDA is below what we were previously targeting. That is primarily driven by more conservatism around our assumptions on new customer acquisitions and on new product launches while continuing to prioritize brand building investment to energize the brand. We will continue to aggressively pursue new business and more efficient ways of working. And we have confidence in our volume-led growth in 2024. However, we believe that it's appropriate to have a more balanced outlook at this point. For CapEx, we are reiterating our guidance of below $75 million for 2024, which continues to assume that our third Asian manufacturing facility remains end-to-end. As a reminder, we are continuing to evaluate our options for this plan. Lastly, I would like to update you on a change we are making to our reportable segments. Effective the beginning of fiscal 2024, we began managing our operation with slightly different reportable segments. Europe and international, North America, Greater China and Corporate. The most significant change is that the Greater China business will be separated from the Asia segment. The rest of the Asia business, which includes the Singapore manufacturing facility, together with the current EMEA segment, will constitute the new Europe and International segments. We will also be moving R&D expenses out of Corporate and into the individual segments to better align with how we allocate resources. In the coming weeks, we will provide recap financial information that is consistent with our new reporting segment structure. We will begin to provide our financial results under the new reportable segment with our first quarter results. This concludes our prepared remarks. Operator, we are now prepared to take questions.

[Operator:]

[Operator Instructions] Our first question comes from Michael Lavery with Piper Sandler. Please proceed.

[Michael Lavery:]

Good morning. Thank you. You touched in your prepared remarks on the status of the relationship with your largest foodservice customer in the Americas and how that may or may not be changing. Can you maybe just give a little bit more detail there please?

[Daniel Ordonez:]

Thank you, Michael. Daniel here. How are you? Thank you for joining us this morning. Listen, as you know and we have said repeatedly in the last earnings, we have only one North Star, and that is profitable growth. We have since last earnings continue to make steady progress on channel mix, in general. We are actively rebalancing growth between the very important foodservice customers that are low margin with significant growth in higher margin channels that presented very significant growth opportunity for us. You would have appreciated seeing that in the prepared remarks and in the presentation. These channels are

[Michael Lavery:]

That's helpful. And just given the updated thoughts on 2024 EBITDA and the progression there. I know on Slide 32, I think it is, you touched on liquidity and the balance sheet. But can you give a sense of your expectations a little bit further out? Would your change now suggest that you may be coming up towards another capital raise at some point or do you have the multiyear plan that you've kept that off the table? Just how should we think about kind of the trajectory there and what your expectations are?

[Marie-Jose David:]

Yes. Hi Michael, this is Marie-Jose. Let me allow first to go back to the prepared remarks where I mentioned that our liquidity position is strong and we continue to improve our free cash flow. When I say we believe our liquidity position remains really strong is because we are adequately from this, from a business plan standpoint. We have healthy cash balance as well as you know revolver backup. We are as well as we called out last quarter, driving improvement on our free cash flow from, of course, a stronger adjusted EBITDA but as well working capital opportunities. You know that those metrics from working capital are definitely super important for me. So we definitely are strong on this front. We are fully funded until we reach free cash flow positive and we continue to work on that front.

[Operator:]

Our next question comes from Kaumil Gajrawala with Jefferies.

[Kaumil Gajrawala:]

Given the change in your 2024 outlook, maybe if you could just provide a few more details. You've mentioned some shifts on expectations on new customers, expectations on innovation. Any more color you could provide would be useful?

[Jean-Christophe Flatin:]

Good morning, Kaumil. It's great to speak to you again and thank you for asking. Let me unpack for you the three main drivers that shaped the design of our guidance. Number one, I just want to reiterate the magnitude of the turnaround journey that we are driving. As a reminder, in 2022 which is just 13 months ago, this business lost $268 million of adjusted EBITDA. In 2023, as you just heard, thanks to our efforts and the mobilization on profitable growth, we have reduced this loss by $110 million. And when you look at the midpoint of our 2024 guidance, it's projecting another reduction of $110 million between '24 and '23. So the magnitude of this turnaround, $220 million improvement in adjusted EBITDA in two years and what it takes to achieve it operationally is the first driver of our guidance. Second, very clearly, in profitable growth, you hear growth. Why do I underline that? I and we strongly, this business has a massive growth opportunity in front of us. We are convinced about that. Hence, our duty is to capture the growth potential. So our adjusted EBITDA guidance also reflects healthy growth investments, innovation projects, sloping fees for our new products, new field set forth in overseas and, of course, bond investment to carry our unique brand voice. All of this in a very rigorous and choiceful manner. The second driver of our adjusted EBITDA guidance is really a reflection of the balanced, profitable growth, North Star. Finally, as you have heard in our remarks, our three segments are in three very diverse situations when it comes to maturity and execution. Some are more advanced, while some, like Greater China, for example, just completed the first phase of their reset. And therefore, our guidance needed to reflect this diversity within our segment's portfolio, and that's what guided our guidance.

[Kaumil Gajrawala:]

Got it. Thank you. And then if I may ask, you highlighted the shelf space or expected shelf space gains. Can you again provide a bit more color? Is it 10%, 20% more? And then how does that translate to incremental sales?

[Daniel Ordonez:]

Kaumil, Daniel here. I guess you're referring to the Americas in particular?

[Kaumil Gajrawala:]

Yes. I'm sorry. That's where you highlighted it. Specifically for the Americas.

[Daniel Ordonez:]

Yes. I will try my best to answer what's behind your question, Kaumil, which is our progress in retail -- in the retail space and I'll try to comment in the evident question about shelf space, which is, obviously, we're tracking and we're gaining, right? Although, data is very recent and I won't be able to fully share that with you today. But as you saw in the prepared remarks, Kaumil, the team is delivering some very significant distribution gains, consistent with the discussions we had in previous ones, in previous quarters. As you heard us talking about controlling the controllables, we were able to drive TDPs growth above 50%, five-zero. The ACVs have grown for above 1,000 basis points year-on-year to 43% and still counting. There is more room to go there in terms of TDPs and ACV, so weighted distribution, because, Kaumil, generated the highest ever market share in oat milk. You guys are tracking the scanner data. I know you are. Above 25% for oat milk and 6% across all plant-based drinks. The traction you might have seen in the recent scanner data with solid growth in both units and dollars in our core business. We believe, yes, indeed, shelfs is growing, distribution is growing and we see this only the beginning. You know, Kaumil, we are the only category pure player in oat milk, and we are the brand that has proven to drive category penetration. So holding that unique space and with so much plenty of ACV runway ahead, there is more to come and more to go. With supply chain reliability issues behind and having regained distribution, we expect steady progress on distribution and sales execution to drive further profitable growth. Hope that answers your question, Kaumil.

[Operator:]

Our next question comes from Andrew Lazar with Barclays.

[Andrew Lazar:]

Great. Thanks so much. Good morning, everybody. I guess, I'm curious about the cadence of EBITDA as we move through 2024. EBITDA obviously improved sequentially each quarter through 2023. I guess I'm curious whether this pattern continues as we start '24, meaning sequential improvement or are there reasons that perhaps EBITDA losses expand again versus the fourth quarter as we move into the first half? And if so, why? Because I think I heard you say that EBITDA dollars would be concentrated more in the back half. So maybe I've answered my own question, but I'm trying to get a sense of how you see the EBITDA cadence going as we go through the year and what the rationale behind that cadence would be?

[Marie-Jose David:]

Hi, Andrew. This is Marie-Jose. Very nice meeting you. I will answer in two steps when it comes to your question. So the first one is, over the past 12 months, right, you know that we have established a foundation to drive a better business towards profitable growth. It's true that last year, we guided to quarterly improvement, but we thought that it's more natural out of these 12 months of establishing conditions that we look more at the long-term time horizon then just the upcoming quarter. So this is just to give you an overview of why we are not driving quarter-over-quarter anymore. Now, as you mentioned and you just said it, right, our guidance calls for the second half to be stronger than the first half. On sales growth and on EBITDA and this is true as well for gross margin. We are not guiding to quarters, but the first quarter, as I just said, we obviously have some dynamics such as the Chinese New Year, such as the spend from new products, new distribution driving swapping Span and Trade Support. I mean, you've heard us saying that two times already. Also, as I mentioned in the prepared remarks, right, we are working on eliminating cost through profitability and efficiency programs. So, it's now my answer to the question on EBITDA. Our EBITDA will be between $35 million and $60 million, which, again, I want to emphasize, the year-over-year improvement between $98 million and $123 million. So out of this improvement, just to be very precise, we are expecting roughly $20 million to $25 million to come from SG&A reduction. As a reminder, SG&A includes distribution costs, and we know those are pretty variable. And the remaining portion of this EBITDA improvement will come from gross profit. So, in a nutshell, there is no guidance on quarter-over-quarter. There is more annual and long-term view understanding, as I just said that the second half will be stronger than the first half and this is all about from top line to bottom line.

[Andrew Lazar:]

And then you talked a little about this in the prepared remarks, but I want to make sure I have it right. Despite a lot of the sequential progress that you clearly have been making and you've talked about, you've pushed back the timing on getting to EBITDA positive right several times now. And I think don't expect it this year either it would seem. I guess if you had to like just boil it down and sort of bucket it into maybe the top couple of things that have been the main rationale or reason for that shifting and why maybe the visibility to that hasn't been what you would have wanted it to be. Like, what would those be? What I'm trying to assess is, why has it gotten push back, why would your visibility to the EBITDA guidance you're providing for this year be more solid maybe than what it's been in whatever past couple of quarters, if you kind of get my point? Thank you.

[Jean-Christophe Flatin:]

Thank you, Andrew. JC here. I'll take this one. Clearly, the way we have guided today is the outcome of our budgeting process. If you say what have you been doing since we last spoke, one of the things we did was projecting, which is evaluating scenarios in the light of the business context. We have the choice to go for profit only, but this is not in line with our North Star, which is profitable growth, because it could have impaired the future growth potential of this business. As I’ve explained, when we boil it down to answer your question, the main drivers of this guidance. First, it is an immense turnaround journey to reduce $220 million loss of adjusted EBITDA in two years. Second, we really wanted to protect healthy growth investments to capture the massive growth potential that we believe we have. And finally, taking into account really the diverse situation of all three segments. In a nutshell, boiling down, this is what drove us.

[Operator:]

Our next question comes from Max Gumport with BNP Paribas. Please proceed.

[Max Gumport:]

Thanks for the question. One quickly on Americas. It sounds like foodservice in Americas revenue was up 4.5%. Total Americas up 2%. It would imply not much growth for U.S. retail. In the scanner data, at least we're seeing for the milk business, it's up mid-single-digits or better in 4Q. I just wanted to make sure we are not missing anything in terms of non-track channel impacts or inventory dynamics that held back U.S. retail revenue in 4Q? Thanks.

[Daniel Ordonez:]

Thank you, Max. Good morning. Daniel here. Yes, I will go straight into your question. What you see is the net effect of the slotting fees in quarter four, Max. As you saw, there is a very heavy NPD innovation agenda that the teams are working on starting at the end of last year, beginning of this year with some very exciting new listings and that's the impact. You can see there in the volume growth and you can see in the very exciting market data that I'm sure you've seen on January 30. Listen, we are seeing TDPs off the chart at 50% growth, ACV at 43% and growing. Remember, a year ago, we were at 34%, three-four and with room to grow. So record market shares and really very, very nice dynamics in top-line growth. In our core wholesale business about 10%. So positive outlook and the net effect of the slotting fees that's what we can add, Max.

[Max Gumport:]

Great. Makes sense. And then a year ago, you laid out your expectation to achieve a high 20% gross margin this quarter. Obviously, the business has changed quite a bit. The strategy has changed. Looking at the bridges you provided over the last year, it seems like one headwind that's been larger than you might have expected a year ago was the trade promotion and mix trend that you had it. Just hoping you could expand on why this played out a bit differently than expected and also what this means for gross margin in ’24? I'll leave it there. Thanks very much.

[Marie-Jose David:]

So look, when we look at where we landed for gross profit, there is no anything structural or any pull out. As a reminder, when we changed our margin guidance last quarter from high 20 to mid-20, it was driven by the expected cost related to the execution of our reset plan in China, mainly from this true rationalization as we mentioned, combined with the impact from the foodservice mix in the U.S. So both elements somehow came slightly different from our forecast. But as I said, there is, as we see nothing structured here. I mean, we said it right and [indiscernible] mentioned it, there is a gross margin as a key lever to deliver on our North Star, and I'm very confident on 2024.

[Operator:]

Our next question comes from John Baumgartner with Mizuho Securities.

[John Baumgartner:]

First off, I wanted to come back to the impairment charge in Q4. I'm not entirely clear what happened there. The press release noted certain events that resulted in discontinued construction? Can you disclose the events that happened? Like what drove the charge? Is there a pivot from here similar to another sort of Ya Ya agreement in your future? Any comments would be helpful.

[Jean-Christophe Flatin:]

Let me take the context point. Honestly, what you see in the impairment chart for Q4 is only, and I insist only the execution of the discontinuation of the U.S. and EMEA factory we announced in the Q3 call. Nothing new, nothing different.

[John Baumgartner:]

Second question for Daniel, if I could. Going back to Slide 14 and the innovation there in EMEA, I guess it was the Jigger, the Mini, the 1 liter, the 1.5 liter. It feels as though you're introducing a lot more complexity into the portfolio. And I think that's the ice cream and frozen dessert strategy in Asia, and how complexity there impacting the business and profitability. Can you speak to the complexity in EMEA? I mean, are these products produced internally? Are they profitable? I'm just wondering at what point the complexity becomes more of a headwind than a revenue opportunity for you?

[Daniel Ordonez:]

Fantastic, John. Well, thank you. That's a great question. Well, two ways in which I would approach that question, John. First, from a consumer standpoint and from a revenue pool, from growth space standpoint, we're doubling down on the range, the Barista addition, which is what really pretty much define the rules of the game, in plant-based and in oat milk. So what you see here, since you made a comparison versus China, there is nothing similar to what we have resetted in China. This is doubling down vertically. Allow me to use this geometrical metaphor on what's working for us. So it's more occasions and more spaces and more cultural spaces for our coffee moments. That's incremental growth in different spaces. Jigger, you will see it in railway stations, in airplanes, et cetera, et cetera. Organic, there are many customers that were not prepared to welcome Oatly because we didn't have an organic opportunity. That's what you see from a customer, consumer standpoint. And all your question on complexity had to do with the way we manage the operations, in which we are relentlessly focusing on efficiency. This change is pretty much nothing to us. This is doubling down on the same supply chain network as we have today. In Europe, it's Vlissingen, and it lands krona more and more. More efficiency, imagine from an engineering standpoint, from a manufacturing standpoint, you're talking about the same pack sizes on the same path forward. You're doubling down on the utilization of the same line.

[John Baumgartner:]

Okay. And then last if I could for guidance for 2024. I can appreciate the incremental conservatism there and I think there was a mention of customer acquisition timing and some conservatism built in there. I'm curious, if we come back to that, is that comment in the context of some of the volatility in the Americas foodservice with customer mix? Are you seeing anything at retail just given the softness in plant-based beverage volumes? Are you seeing customers being maybe less inclined to add SKUs at this point? Any color there would be helpful. Thank you.

[Daniel Ordonez:]

Thank you, John, for the question. Not really. It's a general assessment of adopting a conservative outlook in how we look at the business at the moment of setting the guidance. Of course, there are multiple variables when it comes to that. It's certainly not specifically related to foodservice or the largest customer, as you might have in your head or the retail dynamics, which you know, in the Americas go in the exact opposite direction.

[John Baumgartner:]

Thank you very much.

[Operator:]

Thank you. This concludes our question-and-answer session. I would like to turn the call for any closing remarks.

[Brian Kearney:]

Great. Thank you very much. This concludes our call. Feel free to reach out to the Investor Relations team if you'd like to schedule any follow-up call. Take care.

[Operator:]

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