FirstService's (FSV) CEO Scott Patterson on Q4 2015 Results - Earnings Call Transcript

| About: FirstService Corporation (FSV)

FirstService Corporation (NASDAQ:FSV)

Q4 2015 Earnings Conference Call

February 10, 2016 11:00 AM ET

Executives

Scott Patterson - CEO

Jeremy Rakusin - CFO

Analysts

Anthony Jin - RBC Capital Markets

Frederic Bastien - Raymond James

David Gold - Sidoti & Company

Anthony Zica - Scotia

Stephen MacLeod - BMO Capital Markets

Brandon Dobell - William Blair

Operator

Welcome to the Fourth Quarter Investors Conference Call. Today’s call is being recorded.

Legal counsel requires us to advise that the discussion scheduled to take place may contain forward-looking statements that involve known and unknown risks and uncertainties. Actual results may be materially different from any future results, performance or achievements contemplated in the forward-looking statements. Additional information concerning factors that could cause actual results to materially differ from those in the forward-looking statements is contained in the company's annual information form as filed with the Canadian Securities Administrators and in the company's annual report on Form 40-F, as filed in the U.S. Securities and Exchange Commission.

As a reminder, today’s call is being recorded. Today is Wednesday, February 10, 2016.

For opening remarks and introductions, I would like to turn over the call to Chief Executive Officer, Mr. Scott Patterson. Please go ahead, sir.

Scott Patterson

Thank you, operator and welcome ladies and gentlemen to our fourth quarter and yearend conference call. Thank you for joining us. With me today is Jeremy Rakusin, our Chief Financial Officer. I will kick us off and walk through some of the quarterly highlights and Jeremy will follow with the financial review of the quarter and the year.

This morning, we announced very strong results for the December quarter. Result that capped off a great year for us, our first year as an independent public company after the June 1 spin-off from Colliers International. Revenues were $316 million, up 12%, our EBITDA margin hit 7.1%, which is 240 basis points greater than the margin in Q4 of last year, and earnings per share came in at $0.28, more than double the number we reported in the fourth quarter of 2014.

So very strong results which were right in line with our expectations. Again, this quarter, I want to highlight organic growth, which in local currency came in at 10%, 9% FirstService Residential and almost 14% for FirstService brands. Organic growth at this level is a great reflection on our operating strategies and on the hard work of our operating teams across the businesses. It is very gratifying to see it come through. We are clearly winning market share at both of our divisions.

At FirstService residential, our revenues grew over 10% in total with strong results reported in each region across North America. We experienced particularly strong growth in Texas, the Mid-Atlantic region, including New York City and here in Toronto. In these markets and in general, our growth was buoyed by contract wins in the high rise and lifestyle verticals where we have differentiated service offering and market position.

Our growth in these verticals was again enhanced during the quarter by new development, which accounted for about one-third of our organic growth in total. Last week, we reported four tuck under acquisitions in our FirstService Residential division, all solid transactions that fit very well existing operations and that we completed well within our targeted valuation plans. K.A. Diehl, Community Management Specialist, provide us with a leading presence in the attractive Myrtle Beach, South Carolina market, a market where we were only nominally represented before the acquisition.

And Bruner & Rosi extends our leadership position in the San Diego market and establishes an office for us in North San Diego. We also reported two pool maintenance tuck unders, which add to our service capability in Las Vegas and the Mid-Atlantic. These four acquisitions are very representative of the tuck unders we look for, provide [indiscernible] geographic footprint as in the case of K.A. Diehl in South Carolina, enhance our position in an existing market, as in the case of Bruner & Rosi in San Diego or add to our full-service capability through the addition of ancillary services, services like pool maintenance and repair. We hope to close seven more like this over the course of 2016.

Moving on to FirstService brands, total growth reached 20% for the quarter, with little over half coming organically driven primarily by very strong results in California Closets. Both the franchise organization and our company owned operations delivered excellent growth in results during the quarter in all key metrics including leads, bookings and average job size point to continued strong activity levels in 2016. Results for the quarter were supported by mid-teen organic growth at two of our smaller franchise systems, Floorcoverings International and Pillar to Post Home Inspection. Although small to-date, we are very excited about the future opportunities at both of these systems and we expect them to be growth drivers for years to come.

Just after year-end and early January, we reported the acquisition of our Los Angeles, California Closets franchise, which advances our strategy of acquiring key major market franchises and integrating them into our California Closets company-owned platform, with centralized production. LA is one of the top markets in North America and we believe we have an opportunity to significantly grow this operation’s top line, while also improving profitability through centralized production. We currently have five of our 12 company-owned operations utilizing the Phoenix production facility. We except LA will be the sixth, with transition planned for Q2 of this year and we will be up to 8 or 12 by Q1 of next year. The facility is delivering on quality expectations and turnaround times and as capacity utilization continues to increase we expect to see consistently improving margins.

Before Jeremy steps in I want to say that we’re very pleased with the way we finished the year, feel like we have solid momentum cheering [ph] us into 2016. We got out of the gate quickly with some quality acquisitions in January. We have a solid pipeline of acquisition opportunities and our key is to continue to execute operationally. It is early, but we feel like we’re currently on the path to achieve our goals for 2016.

Jeremy will comment more specifically on the outlook for 2016 in his prepared comments and I will pass the mic to him now.

Jeremy Rakusin

Thank you, Scott. And good morning, everyone.

Before walking through our full year results and segments performance, let me first reiterate the strong consolidated fourth quarter performance that Scott mentioned in his opening remarks. Revenues at $316 million, up 12% versus the prior year quarter. Adjusted EBITDA at $22.3 million, up 57% and adjusted EPS at $0.28, up 115% versus Q4 2014.

With respect to our consolidated full year results for 2015, our performance across the board hit the targets we established at the beginning of the year, specifically annual revenues were $1.26 billion an almost 12% increase over the $1.13 billion for 2014. It included organic growth of 8% or 9% in local currency terms.

Adjusted EBITDA was $103 million, a significant 37% increase over the $75 million last year with margins expanding by 160 basis points to 8.2% up from 6.6%. And adjusted EPS was $1.20, up 43% versus $0.84 per share recorded for 2014. As outlined in prior conference call and disclosed in this morning's press release there were certain adjustments made from GAAP operating earnings and per share earnings to align with our adjusted EBITDA and EPS results, all of which are consistent with our approach and disclosures adopted in prior periods.

Now onto our divisional review, where I will focus more detail around the fourth quarter. At our FirstService Residential division, revenues were $251 million for the quarter, a 10% increase versus the prior year period. Our EBITDA almost doubled year-over-year to $13.7 million on the back of 250 basis points of margin expansion to 5.5% from a 3% margin in the prior year quarter.

Our margin in Q4, 2014 would have been 4.3% on a normalized basis, excluding approximately $3 million of costs related to higher than expected medical benefits, though we still realized a 120 basis points of margin improvement in the fourth quarter, largely due to continued operating improvements.

For the full year, FirstService Residential generated the same level of strong organic revenue growth that Scott cited for the fourth quarter. 8% in reported currency and 9% in local currency terms adjusting for the effects of FX. The Residential division also realized strong profitability for the year with a 6.8% margin, a significant increase from 2014 results, which showed a 5% reported margin and a 5.9% normalized margin, adjusting for $9 million of non-recurring medical expenses in that year. Most of the 90 basis points normalized margin improvement once again came from efficiencies in our operating platforms.

Turning to our FirstService Brands division. For the fourth quarter, we generated revenues of $65 million, up 20% versus the prior year period. EBITDA grew by 25% to $11.3 million for the quarter on the back of our exceptionally strong top line growth together with some operating leverage in our franchised operations.

As a result, we saw a margin increase to 17.4% from 16.6% in Q4 of 2014. On the year, FirstService Brands also showed robust organic growth of 10% or 11% in local currency terms. Our 17.4% margin for the full year was not far off the 17.8% margin in 2014 despite weather-related headwinds for most of the year in our largest system Paul Davis Restoration, as well as the centralized manufacturing investments and transition cost in 2015 impacting our California Closets company-owned operations.

Turning back to our consolidated results, FirstService ended 2015 with strong cash flow from operations. The $87 million for the full year and $11 million for the fourth quarter, which is a seasonally weaker one than our second and third quarters. Our acquisition spending of $12 million for the year was a little lighted than expected. As we expect the pace of our tuck-under [ph] acquisition activity to increase in 2016, some of which we have already seen through the year-to-date announced acquisitions that Scott highlighted in his comments.

Capital expenditures for the year came in line with our expectations at almost $20 million and less than the $22.5 million incurred in 2014. For 2016, we expect our CapEx to be in the range of $20 million to $25 million. On our balance sheet yearend net debt was $156 million, resulting in leverage of 1.5 times, net debt-to-2015 adjusted EBITDA at very similar levels to our previous third quarter and significantly below the debt and leverage metrics in the 2014 year-end financials presented on a pro forma basis for the earlier spin-off. Given our current modest leverage, we announced yesterday a 10% hike to our quarterly dividend from $0.10 to $0.11 or $0.44 on an annual basis based in US dollars.

Total dividend outlays for the year will be approximately $16 million. We believe this increased dividend fits well in the context of our position as a growth company, first and foremost and provides us with maximum flexibility in deploying capital for a wide range of acquisition opportunities. At the same time, our continued strong cash flow generation will allow us to maintain a prudent and conservative capital structure. As we look out to the remainder of 2016, we continue to feel confident about our ability to generate low double-digit top-line growth. Consistent with recent years, we estimate that organic revenue growth will be in the mid to high single-digits with the balance coming through tuck-under acquisitions.

We also expect to achieve incremental progress in our steady march towards a target consolidated EPA [ph] margin of 10% at 2018-2019 after exiting 2015 at 8.2% margin. Our FirstService Residential division will be the driver of this margin expansion through further realization of operational efficiencies. We saw meaningful progress in 2015, taking us to a 6.8% margin for this business and we're expecting a further stride in this area in 2016 towards our eventual 8% margin target.

That now concludes our prepared comments. I will ask the operator to please open up the call to questions. Thank you.

Question-and-Answer Session

Operator

Thank you. [Operator Instructions] We currently have a few questions in the queue. The first one is from Anthony Jin. Anthony, please go ahead.

Anthony Jin

Hi, good morning.

Scott Patterson

Good morning.

Anthony Jin

Can you give some colors as to the proportion of your served markets where you have full coverage of services in the residential space, where you can see some improvement on your coverage, specifically related to the ancillary services and the markets where you're currently at, where you just simply need a lot more density, say residential property management coverage before you can offer the full service?

Scott Patterson

Okay. I would say that there are no markets where we are completely filled out in terms of ancillary services. The Florida market would be the closest. We've been there the longest we have perhaps our largest market share there and we've been working hard on the full service capability really since the beginning there, and so 20 years. But we still have lots of room in Florida to add other ancillary services and certainly add market share as well. So we have virtually every market, we have an opportunity to increase market share and increase ancillary services and there are some markets where we don't operate today in terms of property management. So it’s a priority for us to gain a foothold in those markets and then to start to gradually build out the ancillary services.

Anthony Jin

Okay. And then with respect to what you just mentioned in MD&A, can you perhaps discuss or give a little bit more color as to your pipeline of the mix of transactions that would be more in the residential space or in the ancillary services. And perhaps, we use the word ancillary, but perhaps giving more color in terms of the specific types of services that you're looking at.

Scott Patterson

Sure. So residential property management would be our priority and we are looking at trying to increase our pipeline in that area. It's taking a little while to get our rhythm back since the spin. But we feel very good about the activity levels in the residential property management today. Again expand our footprint or increase our market share in the markets we exist in.

Ancillary services, the pipeline I would say is quite strong as well and some of the things you have seen from us in the past, janitorial pool maintenance, front-desk concierge, security in some places and really being open-minded about recurring services within our managed environment and that can include many other things like elevator services, fire suppression services and so on. So we are open-minded to recurring services that are within the budgets of our managed communities. But I would say, our focus is more on these regular day in and day out side of services, janitorial pool, security front-desk concierge.

Anthony Jin

Okay. And then, Jeremy just wanted to touch very quickly on the margins, we see some nice increases, I guess on both divisions. Now you've discussed the - you've provided your outlook 10% for the business by 2018-2019. But just given that 2015 was relatively strong, can you talk about how that margin expansion is going to play over the next couple of years, I mean how much could we expect in 2016? Thank you.

Jeremy Rakusin

And, Anthony, I would view the march to 10% target as being very steady, incremental. I wouldn't attribute any greater proportion or lesser to 2016 versus 2017, 2018. I think it's going to be steady. We started to see more of it in the back end of 2015 start to take hold and I think again it's going to be a very steady market.

Anthony Jin

Okay. Thank you.

Operator

Our next question is from Frederic Bastien from Raymond James. Fredrick, please go ahead.

Frederic Bastien

Thank you. I just want to build on that last answer a bit more. You did finish at 6.8%, which makes your 2018 target of 8% margin seem quite reasonable, if not conservative. How do you feel about your ability to potentially meet that margin goal faster?

Scott Patterson

I think our comfort level is that 2018 to 2019 timeframe. It's a big business now. We're talking about a business that's got a billion dollars in revenue and incremental basis points on that, if you look out taking 120 basis points over the next three years and sport an equal type of [indiscernible] is good progress and I think that's really our comfort level.

Frederic Bastien

Okay. Thank you. Just wondering how big of an impact the centralized production in Phoenix had on FirstService Brands margins. Are they responsible for the entire margin gain that you reported in Q4 or were there are some puts and takes there?

Scott Patterson

I'd say there is some puts and takes, that very strong revenue growth both at California Closets and in a couple of other franchised systems. We are going to get natural operating leverage from those. I would say that the progress on the centralized manufacturing will be something that more takes hold in 2016 and the years beyond.

Frederic Bastien

Okay. The last one from me. Just wondering which brands you would expect to experience the strongest growth rates this year and obviously California Closets was very strong in '15. But are we expecting more of the same in 2016 or should we see more or different brands takeover the growth?

Scott Patterson

The housing market is very healthy right now, particularly in the U.S. Existing homes sales are up, home prices are up, which have taken home equity values up. And the combination is really fueling the home improvement market. And all seven of our brands are tied to home improvement and one way shape or another. Paul Davis' is a little different in that it's weather influenced. So, I would say that we expect healthy growth from our brands that are more directly tied to home improvement like CertaPro Paints, California Closets, Floorcoverings Internationals. And we do see we had a strong fourth quarter as you saw, see continued strength into 2016.

Frederic Bastien

Okay. Thank you very much.

Operator

Our next question is from David Gold. David, please go ahead.

David Gold

Hey, good morning.

Scott Patterson

Good morning, David.

David Gold

Just couple of questions for you. First, on the synergies that you're looking for in the residential side. Can you give us a sense for two things, one the success that you there where if it's come from and two what the big potential drivers are for that?

Scott Patterson

David, you asked synergy?

David Gold

Right, right. On the resi side you had mentioned that you see synergies there helping to drive the margin improvement over the next couple of years.

Scott Patterson

Yeah, I mean this has been a journey that we embarked around a couple of years ago and obviously we started to see the margin improvements take hold in 2015. It's multi-faceted. It all relates to centralization of back office functions, call center, client accounting, corporate accounting, areas like accounts payable, building out an HR, enterprise wide platform, a national sales organization. And it's taking a lot of those costs that are embedded in over 100 local offices around the nation and centralizing them or regionalizing them that are really doing a streamlining and a consolidation of those back-office functions. A lot of IT and automation around them as well. And that's part of the multi-year plan to take us to 8% margins in that business in 2018-19.

David Gold

Got you. And as far as say the timeline over the next couple of years to get that done. Are there spots where you might be able to accelerate. And I know obviously [indiscernible] asked about margin potential over the next year. But just thinking about that other synergies that you have outlined. And any reason to think maybe that it couldn't be done in a year.

Scott Patterson

Not, we think it's just going to be at steady pace again going from 6.8% in that business to the 8% incrementally. The spaces in terms of the implementation of these initiatives and we just don't see any reason to kind of go and start thinking an acceleration of realization of that target margin.

David Gold

Got you. Okay. And then one other question, on the other side of the business, you’ve seen some success from centralizing production. Are there other opportunities in the - in the company-owned system side for centralizing so that we might see even better margins than you're thinking currently?

Scott Patterson

There are, in terms of shared services as we build up the national platform of California Closets. It's very early days for Paul Davis. So I won't speak to that, but certainly doing the some of the same kind of things that we've been undertaking at FirstService Residential centralizing, accounting and those sorts of things. But much of that is really built into our communication and what we expect from the future margin enhancement in this business. We've communicated 8% to 10% currently going into the low-teens from centralized production in Phoenix and we'll have an East Coast facility probably in 2017. But that will incorporate our thinking around shared services and capture that in that guidance.

David Gold

Got you. Perfect. Thank you so much.

Operator

Our next question is from Anthony Zica from Scotia. Anthony please go ahead.

Anthony Zica

Yes. Hi, good morning, Scott.

Scott Patterson

Good morning.

Anthony Zica

With reference to the FirstService Residential, so we saw 30% growth that was coming from new development. So the remaining portion of 70% that comes from market share gains right?

Scott Patterson

Primarily yes.

Anthony Zica

Yeah and who is losing market share there, if you can give us an idea?

Scott Patterson

Well, there are 7,000 companies. And there is still a portion of that market that is self-matched. So it would be a combination of taking accounts from any and all competitors that we compete against in our markets. But also the trend from self-management to professional management, we do win those accounts every quarter as well.

Anthony Zica

Okay. And Scott when you look at entering the market, what are the metrics that you look at going forward?

Scott Patterson

Well, when we look to enter a market we're looking to acquire a partner with a local market leader. Similar to what we did in Myrtle Beach, the deal we announced last week. And in terms of the go-forward, we have a multi-month onboarding plan where we will start to introduce our best practices in a prioritized leg. Some of them bring value more quickly than others. But it would be a slow process in terms of bringing them into the FirstService Residential pool and starting to win in that market on a consistent basis the way we do in our other markets.

Anthony Zica

Okay. And then one last question and backtracking a bit, what proportion of market is self-managed?

Scott Patterson

35%.

Anthony Zica

So a huge opportunity still for that shift and the momentum is continuing that way. The ownership associations are outsourcing?

Scott Patterson

They are particularly the larger communities, high rise buildings and large homeowner’s associations. That’s where a professional management company and us in particular can bring real value.

Anthony Zica

Excellent. Thank you very much, gentlemen.

Operator

[Operator Instructions] The next question is from Stephen MacLeod from BMO. Stephen please go ahead.

Stephen MacLeod

Thank you. Good morning.

Scott Patterson

Good morning.

Stephen MacLeod

I just wanted to drill down a little bit on the top-line outlook for each business. So can you just talk about how the - whether the top-line outlook differs between FSR and FSB with respect to your sort of mid-single digit to high-single digit organic growth outlook?

Scott Patterson

I would say there isn't a material difference. The strength we saw in the fourth quarter in brands probably would - we expect that to continue. So I'm guessing that we'll see higher overall growth at brands this year, just based on the current strength that we see. But our view is really still we'll double-digit in both. If our company-owned strategy were to accelerate that could influence the brand's top-line in 2016 and 2017 if we got a little bump there through our number of discussion ongoing. The California Closets and Paul Davis, we prioritized the markets that we want to be in and our own communication within a number of those markets it doesn't mean that we will get anything done this year. But we will make progress.

Stephen MacLeod

Right. Okay. So, it sounds like you are incrementally a little bit more positive on the 2016 outlook for First Service brands from a growth perspective.

Scott Patterson

It's based on the housing market.

Stephen MacLeod

Yeah. Okay. And then do you still expect to be active on the NCIB this year?

Jeremy Rakusin

Yeah, I mean it's open. Obviously the fourth quarter was bigger than is typical. But we will really use that primarily only to offset any option exercises and avoid dilution to shareholders. That's kind of it.

Stephen MacLeod

Okay. And then on the FSB business just to come back to that, the margins in Q4 were up on a year-over-year basis. Down on a full year basis just modestly. But do you sort of still expect kind of a flat margin outlook in FirstService Brands as company-owned franchisee offset or the mixed shifts more towards company-owned franchisees?

Scott Patterson

Correct, bang on. We expect them to, over the next few years staying in around current levels because of the trend of the company-owned bringing margins down, but the operating leverage from our franchise operations having offsetting expansion.

Stephen MacLeod

Right. Okay. And then just one more on the cash flow statement. So you had some - working capital was a cash - generated cash this quarter, was there anything that happened that was unique on a year-over-year basis?

Scott Patterson

Yeah. There are two compartments there, half of it is related to tax items more attributable to the spin-off and then the other half would be related to accrued liabilities in and around table [ph] timing and incentive comp. Those will be the biggest buckets of those changes in working capital items.

Stephen MacLeod

Okay. That's great. Thank you very much.

Operator

Our next question is from Brandon Dobell from William Blair. Brandon, please go ahead.

Brandon Dobell

Thanks. Good morning guys.

Scott Patterson

Hey, Brandon.

Brandon Dobell

I want to focus on residential for a second. As you think about the growth in 2015, is there a way to parse out the contribution from whether it's growth in ancillary services or growth in service offerings that were introduced during 2015, I guess I was getting trying to get a little better idea, the organic growth what's coming from the stuff that's more recent which would seem little bit more, I guess opportunistic the next two or three years as opposed to what just kind of typical market share opportunity?

Scott Patterson

Our ancillary services top line grew right in step with the management business and there's obviously a lot of moving parts. We're selling incremental services to communities that we manage currently and then we are winning new contracts that include the full service offerings. So management plus ancillary services. But they grew way in [ph] lot high single digit, 8%, 9%. Does that answer your question?

Brandon Dobell

Yeah. That's helpful. I guess back to one of the previous questions. You think about the contribution from new developments. Any of your markets where it's I guess has been a larger contributor the past couple of year, I know there are some markets in the U.S. that have seen a lot of new constructions, some markets that have seen very little, as part of that answer just trying to gauge how you think about '16 and '17 and the risk and some of your larger markets that developments slow down as a driver for growth for you.

Scott Patterson

Right, I mean Dallas and Toronto are two markets that come in mind where new development has been a big driver. These, primarily the high rise in both cases and I'll highlight [indiscernible] case, let's call five or six years from start to finish and there are still many, many projects within that five-year pipeline window. And so we will see continued growth. We know thousands of units that we’ll be taking out this year, thousands next year as these buildings are completed. But there are a number of new developments on the drawing board that are entering the pipeline is starting to slow. I think Florida and Toronto more so, and so that we won’t see that for a few years but I think one way to answer it is in the last five years’ new development accounted for about 20% of our organic growth and I think it will account for about the same in the next five years.

Brandon Dobell

Okay that’s helpful and then over the brand’s business I guess how much of your, let’s call it three-year margin trajectory is I guess dependent on buying back some of the franchise operations, in some of the territories out there or does buying back territories at a faster pace than maybe you think could happen does that change that trajectory?

Scott Patterson

It does, if we were not to take in any more franchise in the next few years our margin will go up more quickly above current levels. Alternatively, if there was a big spike in activity it would probably come in below current levels, which is why we’re sort of saying no for the next five years, it will be up and it will be down and we expect it to net-net stay around the same level.

Brandon Dobell

Got it. Okay. And then Jeremy how do we think about capital spending needs in 2016 relative to what 2015 looks like?

Jeremy Rakusin

Traditional CapEx excluding the acquisitions $20 million to $25 million that we’re expecting for 2016. We think if you thinking further out 15% to 20% EBITDA is a good number to use for maintenance CapEx.

Brandon Dobell

Got it, okay. Thanks guys.

Jeremy Rakusin

Thanks, Brandon.

Operator

[Operator Instructions]. Our next question is from Anthony Jin from RBC Capital Markets. Anthony, please go ahead.

Anthony Jin

Hi Jeremy. Just is there a similar metric we can use for the dividend going forward, just want to get a sense in terms of what proportion of cash flows to EBITDA that you’ll be looking at?

Jeremy Rakusin

Yeah Anthony, this is something we’re going to revisit with our board on an annual basis. We’re not going to - we haven't in this particular dividend bump and don’t anticipate keying it to any type of formulated GAAP ratio. It’s obviously very conservative of all those metrics, but it’s just something that we’ll look at how we perform and revisit with the board on an annual basis.

Scott Patterson

Okay. And then just a quick one on the retention rates in residential, can you just comment how that’s trending recently and perhaps the visibility through to 2016 just given that I believe the retention rates were tracking pretty high last year?

Jeremy Rakusin

Right. They're in and around 95% and quarter-to-quarter, they bump up to 96% or veer down to 94%, but 95% is a good number for us and we don’t see any dramatic change from that in the coming years.

Anthony Jin

Okay. Thank you.

Jeremy Rakusin

Thanks Anthony.

Operator

And there are currently no questions in the queue. [Operator Instructions] And there are currently no questions in the queue.

Scott Patterson

Thank you, ladies and gentlemen. Thank you for joining. And we will talk again in April. Thank you.

Operator

Ladies and gentlemen, this concludes the fourth quarter investors' conference call. Thank you for your participation and have a nice day.

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