Start Time: 09:30
End Time: 10:11
Air Products and Chemicals, Inc. (APD)
Company Conference Presentation
December 11, 2013, 09:30 AM ET
Guillermo Novo - SVP and GM Electronics, Performance Materials, Strategy, and Technology
Kevin McCarthy - Bank of America-Merrill Lynch
Kevin McCarthy - Bank of America-Merrill Lynch
Good morning, everybody. We're pleased to welcome as our next presenting company Air Products and Chemicals. As many of you know Air Products is one of the leading producers of industrial gases in the world. As representatives of the company, we're very pleased to welcome Simon Moore who directs Investor Relations and our speaker today, Guillermo Novo.
Guillermo is Senior Vice President and General Manager of Electronics, Performance Materials, Strategy, and Technology. In this position he's responsible for the company's Electronics and Performance Materials businesses, the Technology organization and Corporate Strategy and Marketing.
He's also a member of the company's corporate executive committee. Guillermo began his career with Rohm and Haas and just prior to joining Air Products was employed by Dow Chemical where he most recently served as group vice president, Dow Coating Materials. So he joined Air Products about 15, 16 months ago, I guess, in the fall of 2012.
So Guillermo thanks so much for making the trip. I look forward to your update.
Great. Thank you. Good morning, everyone. Kevin, thank you, and the rest of the BofA team for hosting us today. So it's a real pleasure. As Kevin said, I've been now with Air Products for a little bit over a year, running all of the materials side of the portfolio as well as some of the corporate functions and strategy and technology.
Before I start, I wanted to remind you of all of the forward-looking statements that we'll be making based on expectations and important risk factors.
Let me start today's talk. I'll be covering the different parts of the company. Would like to give a picture of what the priorities are for the company as far as our strategies, the key investment areas on each of the businesses and what's driving our growth and performance targets moving forward.
So a little bit about who we are. Basically we're a diversified industrial gas company. We have about $10 billion in sales in our portfolio, very global portfolio. If you look at the markets that we're covering, the geographies that we're covering and the business units that we have in our portfolio.
In most areas we're very critical suppliers to our customers be it in the industrial gas space or in the products and the technologies that we supply. Our full company is built on innovation. If you look at the initial parts of the company innovating with the outsourcing model, the onsite model later expanding into hydrogen.
If you look at our leadership positions in Electronics and Materials and LNG, a lot of innovation that's driven very strong market positions and competitive positions in those areas. Given the diversity and the profile of our businesses we have a very consistent and predictable cash flow performance and financial performance in our portfolio.
As you'll hear through the presentation we're focusing on delivering shareholder value in all our activities, first around a very interesting and strong growth portfolio of projects and businesses. In our backlog we have over $3.5 billion of projects. 85% of those are onsite type projects that provide very good cash flows, secure take-or-pay contracts over the long haul.
The rest of the portfolio also is very diversified, so it gives us a good diversification of drivers for the performance of our business in terms of demand given the diversity of the Merchant gas business we have as well as the diversity of the Merchant portfolio.
We are focused on execution. Each of the businesses has very specific targets that's driving the execution, be it projects in our Tonnage portfolio, be it innovation in our Materials part of the portfolio or be it developing our market positions, our local market positions on our Merchant part of the portfolio.
We're focused on delivering shareholder value specifically through our dividend share buyback. As you'll see we've returned over $4.5 billion to our shareholders over the last six years.
What drives it? If you look at the markets that we participate, we have very strong positions in most of our core markets. Hydrogen, our number one market player; we're the market leaders in LNG; we've taken leader positions in oxygen for coal gasification in China; we're the number one player in the Electronics market for the spaces that we participate. If you look at our Performance Materials business be it epoxy, polyurethanes or the other additives we have, we're the number one players. And we have – if you look at our Merchant positions either through our direct participation or through our joint ventures at a very local level in the markets that we have, we have some very strong positions in key markets around the world.
So you see a lot of diversification of what drives our portfolio and three key drivers sort of underlie the fundamental growth that we see. First, emerging markets, our big growth opportunity and you'll see some information on how we're growing the geographic parts of our portfolio both through investments and through our joint ventures. A lot of demand growth for all our businesses.
Energy is a big part of our portfolio, especially in our Tonnage side of the businesses, so a lot of trends that we're seeing around the world with natural gas, with changing standards are playing well into the growth opportunities within our portfolio. And the changes in environmental trends and standards is also creating shifts and growth opportunities in the types of products we saw. For examples in our Materials play, the need for more energy efficiency is driving a lot of growth in many of our polyurethane type applications, similarly in fuel standards and other areas.
If we look at the portfolio in terms of modes of supply, 41% of our portfolio is what we call standalone onsite, pipeline type businesses. These tend to have very stable long-term contracts, usually 10 to 15 a year term, so very predictable. Once we close the contracts, very predictable financial performance and our track record has been very strong in that area.
21% of our portfolio is our liquid bulk business, so this is very diversified; a number of applications going, a lot of different fabrications and uses around the world. This tends to have shorter term contracts, three to five years, so we still have good positions to defend our share and it gives us good leverage on the pricing side to recover raw material changes.
30% of our portfolio is what we call packaged gas and materials. Roughly a third is packaged gas, two-thirds of that is the material side of the portfolio and this has shorter term contracts but it's driven by our distribution position in the packaged gas, very local, it's a very fragmented customer base where we have good leverage. And in the materials it's about the products and the product performance, the value and use that we provide our customers. So again, we're really focused on very specialty end markets that we target and that gives us a lot of staying power with our customers and leverage and pricing flexibility.
About 8% of our portfolio is what we call equipment and services, most of that is the equipment side of the equation. 50% of that would fall in our energy and equipment business, the other 50% falls into our electronics and merchant business. Our LNG business that I'll talk about falls within this category, it's an area that we have significant technical advantages, technology advantages and about 80% of the world's LNG is liquefied using our technology.
I also wanted to highlight the importance of joint ventures in the history and in the future of our portfolio. Although we say we have a $10 billion revenue position from a consolidated perspective, if we look at our position in the markets especially in the industrial gas market, we really have $13 billion, so $3 billion of our commercial activities are coming through our joint ventures where we have important positions.
These joint ventures are very local. You can see 80% of them are in emerging markets, so they are an important growth mechanism for us. Traditionally we've been very successful in growing our business through our joint ventures. I would highlight our positions, for example, in Korea and Taiwan where we have market leadership positions in the Electronics and in the Merchant business. Those came out of joint ventures with local partners that helped us establish leadership positions in those markets.
And over time we increased our ownership and control in those positions. So very successful in our history and we believe it will be a very successful growth. I'd highlight, for example, in Latin America Infra between this and the activities that we're doing with a recent acquisition of Indura really positions us very well in Latin America for the future.
To take a little bit, I'll just spend a little time on each of the businesses. On onsite business is about 40% of the portfolio, as I said, with those long-term take-or-pay stable outlook. We had several businesses within this portfolio. One of our big business is our hydrogen business. We're the number one player in this market. We have about 40% market share and we have a very strong – not only were we the first ones into this market but we've built a strong pipeline network around significant parts of our business.
I would highlight in the Gulf Coast where we have the biggest pipeline connection, about 90% of the refineries in the Gulf Coast we supply hydrogen through our pipeline. So it gives us a very strong defensible position and a very efficient position to invest and support that overall network.
We're also creating an important position in oxygen, especially for standalones in coal gasification in China. We've gained most of the – the highest market share in the new projects that are coming in China. We see this as a significant growth opportunity in both of these segments and I'll talk a little bit more. Drive significant growth opportunities and returns.
Investments in this area are driven by the opportunities that we see and also by being able to deliver the risk adjusted returns that we feel we need to get for each of the projects depending on the nature of the projects and the nature of the partners and the geographic locations that we're involved in.
If we look at hydrogen, we see this as a significant growth opportunity for us. Again, number one player in the market. We see the market moving from North America. It's now globalizing. Also we've gained a few projects in India and in China and we see significant growth opportunities. We expect this market to double over the next decade and it's really driven by changes in the crude slate, the heavier crudes need the hydrogen to get the sulfur content and the cleaner fuel performance.
So the changes in the transportation fuels around the world is playing into the need for hydrogen and that's where we're seeing a lot of this growth and demand. And changing environmental regulation; if you look at China and other parts of the world, cleaner fuels are becoming a requirement and that drives significant growth in our overall portfolio.
Coal gasification and oxygen used in China is – China's the biggest market that we see for oxygen at this point in time and it's presenting us with significant growth opportunities that are happening in this decade with about 1 million tons per day of total market potential, it's 70% of the global market as we see it for these opportunities.
We're focused really in three key areas that drive demand in those areas. First is, we do see China's need to use coal. They will continue to use coal as their hydrocarbon of choice given the cost position, the abundance of coal that they have. And also one of the advancements that have happened on the environmental side that this is going to be an important source of energy for China in the near future. So as we look at the opportunities for gasification, the gas space for syngas per energy, produce the syngas, pipe it to energies to produce electricity is a major use, 60% of the market and that's a key area that we're targeting.
In fuels, coal to liquids type, we have several projects, very good growth opportunity for us and also we have some participation in coal to chemicals. But coal to energy is really one of the key segments that we see us focusing. And we've been very successful in this area not just because we're bidding on these projects. We've designed a very specific equipment for the China market, for these types, very large ASUs for producing oxygen and that's allowed us to be very capital efficient and deliver very good operating rates in these types of units for this market and it's allowed us to capture 37% market share in this market.
More recently you've seen some of the announcements that we've had in the energy to waste area. We're in the process of building our Tees Valley 1 unit and we've announced our Tees Valley 2 unit. Tees Valley total investment we expected to be around $950 million, we expect that to deliver once it's in full operation around $0.25 to $0.30 per share. Like hydrogen this is an opportunity that's driven through innovation. We're bringing a lot of technologies that we're very comfortable with around gasification to this area and to do a lot of parallels. We're the first ones into hydrogen. We see this as significant growth opportunities.
The revenues and the value creation is driven by three streams; the sell of power. We're getting all the renewable credits and we're also getting tipping fees for taking the waste. In total that gives us a very robust earnings and a robust project. All these projects are moving ahead on time. Tees Valley 1 should be online in 2015 and Tees Valley 2 should start to get online in late part of 2016. And one of the advantages we have in both projects in one site we're getting economies of scales in both the capital side and also in the operating side that has increased the returns for these projects. So very exciting, a new area that we expect to grow over the coming years.
LNG as I said is our big success story. The demand for LNG has been growing very fast. We have a technology leadership here. If you look at units equipment for large facilities, we're the market leader. We're pushing down to midsized facilities and now also into floating LNG facilities so that our customers can do the liquefaction offshore close to the production areas. Because of the technology position that we have, we've been able to capture significant market share and very good returns for this business. And given the outlook for natural gas demand we see this as a strong growth area for us in the coming years.
I'll talk a little bit about our Merchant business. This is a very local business. If you look at geographically, it's very diversified. I've spent some time visiting some of the customers in different industries. The range of use of industrial gas is amazing in the number of markets and applications. So the core demand of this market is really driven by underlying industrial activity and as such this has been one of the areas that we have been hit with a slowdown in the overall economic performance of the different economies in the world. That's been a challenge but it's also an opportunity. We have made significant investments both in developed economies but especially in the emerging markets. So we have unloaded assets that we're taking action to loads to assets and we believe if the economy start to improve that there's going to be some good tailwinds.
We have about $1 billion of incremental revenue that we can get out of the assets that we already have in place and that revenue would come with very good margins at 30% to 40% incremental margin. As I said, this is a very local business and when I say local it's not regional or country, it's really about how we build within specific geographies our competitive advantage around local density and market share so that we can efficient in our coverage of our customers in that specific region building our relationships, solving their problems to gain demand and share and then using that share to build an efficient distribution network across all nodes, onsite, liquid bulk, packaged gas so that we can be very efficient in our distribution delivering higher returns.
We've been taking a lot of action in this business in each of the regions. In North America we've put a lot of emphasis on driving growth, volume growth, expanding our sales force. We've done acquisitions, our recent EPCO acquisition on CO2 to complement the products that we're selling to our customers in the nitrogen area. We've seen a very robust growth in terms of signings and our share gains in the North America market.
In Europe it has been significantly impacted with the overall economic downturn. We have very strong positions. If you look at Northern Europe and Eastern Europe, 60% of our market is in those better performing economies and we expect those to continue to improve as European economies grow. But we also have a significant position in Southern Europe where we have leadership positions in countries like Spain, through our joint ventures in Italy and other parts Southern Europe. Clearly, these are challenged from the overall macroeconomic positions but we do have these leadership positions.
We're taking action to improve those positions but these are businesses that we're in for the long haul, so we want to be sure that we're positioned to maximize the performance in the short term but that we are there for the future as these economies improve so that we can continue to gain share and bring in the leverage that we've created through our density and market share.
In the emerging markets, this has been a big investment area for us. As I mentioned before, Latin America is a great example. Today we're probably one of the leading players in Latin America. We're the number one player through our joint venture in Mexico. Indura gives us – if you look at the West Coast of South America, we're the number one player in those markets right now. In Brazil we have a position and we're continuing to work to strengthen that position in specific markets within the Brazilian geography. So we're very excited about Latin America and the implications of our competitive position.
In Asia, we've been investing. We have leadership positions in a lot of North Asia as I mentioned Taiwan and Korea. A lot of our investments have been in China to expand capacity. We have very good positions also in Southeast Asia and Thailand and India and we're trying to expand our position in other countries in Southeast Asia. So very exciting area, we have a lot of activities and again it was that local focus of density and share to drive our competitive advantage.
Let me talk a little bit about the businesses that are in my portfolio. We have two groups; our Electronics Materials business and our Performance Materials business. If we look at our Electronics business, we roughly have about $1.2 billion in sales that we have within the income statement that we report. However, our Electronics business is market spacing so we also run all the commercial activities for the Merchant activities with the Electronics customers.
So from our customers' perspective we're about a $1.5 billion, $1.6 billion supplier, so we're one of the major suppliers to this industry and we have access to all the major players and very strong relationships with them. Within that $1.5 billion, 29% of the portfolio is tonnage, so again those long-term take-or-pay. A lot of this is nitrogen and our customers need the nitrogen to run their plant or even when they're not running their plants, they need the nitrogen to protect their equipment, very expensive equipment. So demand in this area is pretty stable once the units are in operation and the fabs are in operation.
About 18% of the portfolio is liquid bulk, normal liquid bulk similar to our Merchant business. 11% of the portfolio is delivery systems. This is equipment. It's really tied to supporting the sales of our process materials and advanced materials. This allows us to control the delivery of the materials to the tools and the fabs in a very controlled environment, and is very critical given the nature of the use of the products that we sell and also the – as we go into the more sophisticated nodes into the 10 nanometers and under. It's not just the product performance, it's how we're delivering and the accuracy with which we deliver the products.
Two drivers in the delivery system is how we're applying it to our sale of materials but secondly is the demand for the equipment is really driven by our customers' investments when they're renovating plants, when they're retooling plants, that drives the demand. So demand equipment can be a little bit more chunky in the sense of it depends on investment activities by our customers.
Around 35% of our portfolio is the pure materials business, process materials being 22% and advanced materials being 20%. Process materials are materials used in processing steps of making the electronics. So in a clean and etch area for cleaning the equipment, the tools, a lot of NF3, the fluorine chemistry is used for those kinds of applications. In advanced materials we're actually going into the production of the system cells and I'll talk a little bit more about that in our next slide. So we're very critical suppliers to the industry and we're probably one of the major suppliers to these customers.
We get a lot of questions about demand volatility in this business and what's happened in our performance and our first answer tends to be around overall market demand, MSI as the demand for silicon, how is that driving overall performance. And it does give us a feeling of underlying demand. If you look at the performance of our business and the story of what's impacting our performance, we need to break it down into three specific areas.
As I said the tonnage business is very much like our tonnage part of the portfolio. It is actually very stable. If you look at our overall performance over the years it's shown the same stability and resilience and profitability of our tonnage part of the portfolio. So that's been a good performer for us.
If you go to the other side of the advanced materials, so that's about technology, it's about positioning our products for the next node so that we can bring in those next materials that will enable our customers to make the next generation chips. That's about technology. 60% of our activities in that area are on the next generation nodes. So yes, demand impacts us in the base but that base is constantly changing over as our customers move to new technology. So it's really about pacing the pace that which we're investing to drive growth.
We have three business really in this area that are interrelated to a degree; first our advanced deposition. These are the materials that actually build the layers of the chip both in organosilane and organometallic area. We have the CMP slurry for the planarization, the polishing of those layers in between each of the layers that we're doing the deposition. And then we have the cleaning. So in each of those steps we got to clean, remove without damaging each of the layers that we're putting.
So although we had three different businesses each with its own technology, IT position and value drives to our customers, because we know what customers are working on, what technology combinations, if we know what they're going to be doing – what deposition they're going to be doing, we know what we're going to have to polish and we know what we have to clean, there's some good synergies there.
Again, we did our DA Nano acquisition there and we've been very happy with the performance. This has been very stable. This is a very high margin part of the portfolio, higher margin than the overall company and it's about growth and it has been delivering growth and has been stable [ph]. So we have some noise in our performance, so by definition most of that noise has come from our process materials and delivery systems and that's really been driven by two issues, the lumpiness in the demand for equipment that I mentioned and then the market dynamics in some specific segments.
For example, in the PV market, there was significant growth expectations, significant investments that were made by all the players. That market has deteriorated, the competitive activity has been significant, so a lot of pressure on volumes and on pricing. And our problem, our challenge has been is we have a very big manufacturing footprint in the U.S. Most of the volume now in is Asia, so we're a high cost producer and that has impacted our performance. And so we have lost some share and margins.
We have taken a lot action. We've exited business that we don't feel that are going to be returning, for example in the Silane business we exited that business. We've shut down plants in our NF3 and shifted production to our more cost efficient, closer to the market plants in Korea so that we can regain share at an advantage cost position and we're making significant changes in our supply chain. So this segment of the business is about fixing. We have very good profitability in certain parts of it, so it can be a very profitable business but we need to address our own challenges within this very competitive market.
Performance Materials is about $1 billion business and again, this one is more akin to our advanced materials. It's about technology. We play in four key markets; our polyurethane additives, our epoxy curing agents and then a group of specialty additives. Epoxy is our biggest business and this goes into we're the market leaders in the epoxy curing agent business. They go everywhere from coatings to industrial floors to adhesives to composites.
In the polyurethanes we have both the catalyst business and specialty surfactants and additives that go into the foam both flexible and rigid applications. Again, we're the market leader in those markets both from a technology and from a share position. And then in our specialty additives area, we are the market leaders in the additives that we play. These are very high value, low use level additives that go across a wide range of applications be it coatings, construction materials, inks, adhesives, oilfields, so a very broad range of applications, very diversified.
So being the market leaders in these more specialty niche segments with a very strong global position and with a very good profitability, this segment again is more profitable than the average for the company puts us in a very strong position. We are high value owners for this business and our focus really is on driving growth, growth through innovation, fundamentally, organically but both for electronics and for electronic materials we do have a clear agenda of what bolt-on moves we could make to enhance our technology position or our capabilities in these markets.
So as I said we're very rigorous on the investments that we do; a lot of emphasis on the projects. We do a lot of risk analysis. We focus on the returns, a very disciplined process for improving the projects. I would say the same thing if you look at our innovation agenda and how disciplined we are looking at where we're putting those long-term investments be it in capital or be it in intellectual property to drive our focus, and we have a very rigorous process also not just to approve those projects but then to evaluate the performance after they've been running for a number of years.
We have a robust pipeline that we're seeing backlog of $3 billion, so we see a lot of growth, the majority of that with that very stable onsite type model that's driving the big part of our capital investments. And as I said, we're focused on delivering shareholder value. We've returned $4.5 billion to our shareholders, 2 billion of that through repurchase, 2.5 billion of that through dividends; 31 years of consecutive increases in dividends which we plan to continue.
We're striving to maintain bond ratings so that we have flexibility for moves that we need to make and we're driving share repurchases. And yes, we want to grow but it's not about just growth it's about investing in good projects that have good returns for our shareholders.
I'm going to stop there and take any questions.
Kevin McCarthy - Bank of America-Merrill Lynch
Thank you, Guillermo. Anyone has a question, please just raise your hand and Wendy will bring a microphone right over. Guillermo, I'll kick it off. As you noted in your remarks you've been very active in pursuing and winning oxygen contracts for gasification of coal in China. I think more than half of the pie chart that you showed was really kind of coal or syngas going directly into energy. Can you talk about the evolution of that market as opposed to coal to chemicals or coal to fertilizers and how many of your customers intend to do that?
I think there is going to be a fundamental difference in underlying demand and needs from the market if you look at the syngas market, the coal to energy versus coal to liquids and coal to chemicals. Especially if you look at the coal to energy and coal to fuels, it's really driven mostly by an internal China dynamic need for energy. So if you look at a lot of the issues with pollution with a lot of coal power plants by moving to cleaner gasification technology of coal gasification that make the syngas and then piping the gas to produce the energy actually it's much cleaner and more efficient way for China to operate. So I think that's going to be driven by more China dynamics. Equally I would say in the fuel area with high requirements for cleaner fuels, again it's driven by more the China dynamic. In the Chemicals, it's a situation of hydrocarbon. It is important for China but there you are more susceptible to a lot of the international market dynamics depending on imports and exports and the competitive dynamics are very different. So we're participating in all three but our key focus is on those first two because we think we have a lot more sustainability and we're trying to partner with key players that have very strong and long-term positions. As we look at the tonnage type model, yes it's a partnership and a long-term investment for us but it's equally a long-term investment for our customers. We are critical to them, so it's a very good relationship and I think we have a proven track record of performing well in those markets.
Kevin McCarthy - Bank of America-Merrill Lynch
Any questions for Air Products?
With 85% of the backlog in tonnage projects, is that a conscious strategic move to maybe move away from the merchant portion of the market with oversupply there or is that just the way the projects have fallen out in terms of bidding?
Really if you look at it, I mean the way we chose our projects is two things; it's the opportunity and the returns that we got. The opportunity right now in the tonnage is there. China is investing in coal gasification. New refineries are requiring hydrogen for their production. So even we participate – we don't chose a timing when these projects come, so we need to make decisions based on that opportunity. So we have a very robust position be it in hydrogen, in oxygen and LNG or now in energy to waste that we find significant growth opportunities and we need to deal with the timing of those opportunities. In the merchant area, the reality is right now that segment is driven more by the macroeconomic drivers. We have made significant investments to be clear. We especially look at the emerging markets both asset investments and acquisitions, so it's not like we have not invested in that area. We're there. I think now it's about loading those assets and catching up with the investments that we have made. And given the materials, it's not as capital intensive but equally we're making significant investments. This really just addresses the capital size on investments there are more R&D, more expensive that we're investing into development and technology to solve our customers' current and future challenges.
A question on two of the Chinese projects which you say are on stream from the slides relative to what we understand to be some of these gasification chemical projects which are massive, those are only large. Are those serving gasification or steel mills or…?
We have a range. We're going into several of them in the coal to liquids, some are in the coal to chemicals (indiscernible). The bigger ones in the coal to energy are in progress and will be coming on stream.
So the ones that are on stream in Xinjiang and Wilson, what are those products, what are those plants?
Both of those were on stream and those were both oxygen plants serving coal gas fires. Xinjiang [ph] is a supplier of intermediate stem and some other chemical, petrochemical companies in that area, so those are both coal gasification projects.
Kevin McCarthy - Bank of America-Merrill Lynch
Guillermo, you touched upon some of the restructuring actions that you've taken in the electronics and I guess process chemicals in terms of Silane and NF3. Can you just help us understand I guess where you are in the process as you move from planning to executing, what does the timeline look like there and financial consequences of those actions?
We've already taken some of the actions and you saw some of the provisions that we took this year that were significant. I would break them down into three current actions and then there's more actions that we will continue to take. One, we took – we exited the Silane business and that was a big impact we had. We were on the other end of a long-term take-or-pay contract with our supplier and we exited that contract and that was a big impact on us. But we eliminate the drag of underperformance which would have gotten bigger over time given that market we do not expect it to recover. We've taken actions around the footprint, so taken capacity off stream and investing and bringing the capacity that we have in Asia up to par both from a cost perspective, quality and capacity perspective and we're taking charges on that and we're driving and shifting the volume already as we speak. And we've taken actions to reduce costs. So that's already taken place. We're going to see a good improvement in our financial performance in the near term and we are going to continue to do some more. If we look at our supply chain, this is a supply chain intensive area. We're moving like the packaged gas, a lot of cylinders, a lot of material going two-way to our customers and back and we feel that there is still opportunities to improve our performance. So in that process material area, we are going to see earnings improvement more driven by our actions than really top line growth which is very different from the advanced materials where there it's about driving the growth of the new very high margin products that we're introducing.
Kevin McCarthy - Bank of America-Merrill Lynch
Excellent. Guillermo and Simon, thanks for your attendance today and I appreciate the presentation very much.
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