Luminex Corporation (NASDAQ:LMNX) Q2 2017 Results Earnings Conference Call August 7, 2017 4:30 PM ET
Matthew Scalo - Senior Director, IR
Homi Shamir - President and Chief Executive Officer
Harriss Currie - SVP, Chief Financial Officer
William Quirk - Piper Jaffray
Tycho Peterson - JPMorgan
Dan Leonard - Deutsche Bank
Daniel Arias - Citigroup
Brandon Couillard - Jefferies
Brian Weinstein - William Blair
Good day, ladies and gentlemen, and welcome to the Luminex Corporation's Second Quarter 2017 Earnings Conference Call. My name is Carmen and I will be your coordinator for today. Today's call is being recorded. At this time, all participants are in a listen-only mode. Following the prepared remarks, there will be a question-and-answer session. [Operator Instructions]
I would now like to turn the call over to Matthew Scalo, Senior Director of Investor Relations, for opening remarks. Please proceed.
Thanks Carmen and good afternoon, and welcome to Luminex Corporation's conference call for the second quarter 2017 financial and operational results.
On the call today are Homi Shamir, President and Chief Executive Officer; and Harriss Currie, Senior Vice President and Chief Financial Officer. We'll be following our standard agenda today. Homi will review our corporate highlights. Harriss will review the financial performance, and after that, we'll open the call for your questions. As a reminder, today's conference call is being recorded and a replay will be available for six months on the Investor Relations section of our website.
Certain statements made during the course of today's call may not be purely historical and consequently may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and the company claims the protections provided by Section 21E of the Securities Exchange Act for such statements. These forward-looking statements speak only as of the date hereof and are based on our current beliefs and expectations and are subject to known or unknown risks and uncertainties, some of which are beyond the company's control that could cause actual results or plans to differ materially and adversely from those anticipated in the forward-looking statements. Factors that could cause or contribute to such differences are detailed in our Form 10-K for the year-ended December 31, and our Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission. We encourage you to review these documents and we undertake no obligation to update these forward-looking statements.
Also certain non-GAAP financial measures, as defined by SEC Regulation G, may be covered in this call. To the extent that any non-GAAP financial measures are covered, a presentation of and reconciliation to the most directly comparable GAAP financial measures is included in our earnings release, which is available on our website in accordance with Regulation G.
I'll now turn the call over to our President and CEO, Homi Shamir.
Thank you, Matt. Good afternoon, and welcome to our second quarter 2017 earnings call. We reported another strong quarter with revenue of $76.5 million and growth of 19% over the prior year. With a strong topline and steady gross margin we produced another quarter of solid cash flow and profitability. Our molecular diagnostic business achieved robust revenue growth of 45% with both our automated and non-automated platform for targeted and syndromic testing contributing strong double-digit growth.
Our integrated sales force and the extensive product offering drove this excellent result. In fact, one of the benefit we are seeing is that our non-automated infectious disease solution are performing very well as a result of the overall portfolio based approach. And when you consider the ever-changing reimbursement landscape, Luminex is very well positioned with both, the breadth of our platform offering and our pricing.
This strategy allowed us to provide labels with a solution that address the specific needs with targeted or syndromic testing while potentially minimizing unnecessary cost to the healthcare systems. We believe the strategy is unique and will continue to drive strong growth and profitability in years to come. We continue to gain traction with our automated Sample-to-Answer molecular solution generating revenue of approximately $11 million in the second quarter a pro forma growth of 44% compared to $7.4 million in the second quarter of 2016.
We are on track to exceed our 45 million annual revenue target. As far as first menu progress [ph] we received FDA clearance for our ARIES Bordetella and C. Difficile assay, our fourth and fifth FDA cleared assay on the system. We gained CE-IVD marking for Norovirus and C. Difficile as well. Also we have completed our clinical study for Group A Strep and are very close to submitting to the FDA for review.
Lastly, we received a positive reimbursement news in Japan for our VERIGENE gram positive and gram negative blood culture panels and will be working with our distributor Hitachi for this exciting opportunity. We are the only company in Japan with a clear automated sample-to-answer solution for blood culture identification an additional assay such as C. difficile and enteric panel are in the pipeline.
On VERIGENE too we have chosen not to begin clinical trials due to both internal and external circumstances. We will provide an update in the next few months. Following a strong first quarter performance our Licensed Technology Group posted a first half 2017 growth rate of 5%. Strong demand for our FLEXMAP 3D systems continued in the second quarter reflecting the ongoing multiyear upgrade cycle in transplant diagnostic. And we continue to selectively invest in support of our future growth opportunity for this group.
In addition, we generated cash flow of over $70 million and our balance sheet is strong with no debt and a cash balance of over $100 million post our quarterly dividend payment. Nanosphere is fully integrated and we achieved accretion in the second quarter well ahead of plan. Therefore, we once again full bandwidth to pursue other acquisitions.
Now Harriss will review the financial data and afterwards I will return with some closing comments.
Thanks Homi. As Homi has mentioned, we had a great quarter. To summarize, revenue grew by 19% of which 4 percentage points were organic. Our licensed Technology Group revenues were flat for the quarter and system revenue growth was offset by timing of royalty revenue. However, LTG revenues are up 5% for the year-to-date period. Our Molecular Diagnostics Group grew by 45% of which 8 percentage points were organic supported by growth of our automated solutions, VERIGENE and ARIE.
System revenues which includes systems sales to our licensees and both automated and non-automated systems sales within our Molecular Diagnostics Group were up 2% for the quarter. Included in this figure were 270 of our multiplexing analyzers at the high end of our 225 to 275 quarterly range in addition to automated systems placements. After growing 30% in the first quarter consumable revenue in the second quarter was flat compared to the prior year attributable to select order timing that favored the first quarter.
For the full year 2017 we believe consumable revenue expectations will be impacted by funding challenges related to a portion of a multiyear bulk bead contract by a life science customer. Now we currently expect consumable revenues in 2017 to be flat and to be weighted towards the first half of the year with about 60% of the total coming in the first-half. As we've stressed before, events like project cancellations or shifting quarterly demands from our largest customers can still occur. Aggregate assay revenue grew 45%, of which 12% was organic. Royalty revenues were down compared with the prior year due to timing of items like royalty minimums and audit payments.
Now let's turn to the income statement. Gross margins came in at 65% in line with our previously communicated expectations. Factors that influenced gross margin in the quarter included typical mixed shift and the inclusion of a higher percentage of our lower margin automated sample-to-answer solutions. It is worth noting that we continue to improve the gross margins of our VERIGENE-related revenues as a result of a focus on managing the costs of the acquired enterprise and overall volume increases and increase of our ARIES gross margins primarily as a result of increased volume buoyed by incremental system placements and a continuing flow of new assays.
We continue to anticipate gross margins for the next few quarters to hover in the mid-60s as a percentage of the entire automated sample-to-answer molecular portfolio of products increase as a percentage of total sales. The sales growth of our automated sample-to-answer molecular portfolio of products is getting additional momentum from recently negotiated group purchasing organization agreements adding ARIES to existing VERIGENE agreements or establishing agreements for the first time.
Operating expenses increased 14% for the quarter with the incorporation of Nanosphere as the largest contributor to this growth, as well as the timing of certain operational actions including sales and marketing activities and product development timing. For the rest of the year our expectations are that any material increases in operating expenses will be primarily driven by initiation of clinical trials, incremental employee -related costs, finalization of the consolidated system integration and the timing of discrete sales and marketing activities.
R&D expenses for the quarter were up 6% over the prior year and represented 16% of revenue. SG&A costs were up 16% for the quarter from Q2 2016. Excluding Nanosphere SG&A expenses grew by a modest 3%. Second quarter operating margin was 10% or $7.5 million dollars. Our consolidated effective tax rate for the year-to-date period was 31% representing our current expectations for our full-year ETR.
The company continues to utilize its net operating losses and tax credits in the U.S., Canada and the Netherlands and therefore cash taxes to be paid are expected less than 15% of booked tax expense. For the quarter we posted net income of $5.5 million or $0.13 per diluted share. With respect to Nanosphere accretion we previously committed to accretion no later than the end of Q3. As a result of our focus on effective management of the business we achieved accretion to the company's profitability in the second quarter more than two quarters earlier than our initial communication.
Now quickly turning to cash flow, we ended the quarter with approximately $103.7 million in cash and investments up $17 million from our March 31 balance. As Homi mentioned, we're driving excellent performance in our automated sample-to-answer molecular business and will likely exceed our previous 2017 revenue goal of $45 million. Offsetting this there is a lowering of our growth expectations for our LTG Group. Net-net we reiterate our full year 2017 revenue guidance range of between $300 and $310.
Lastly, we want to provide revenue guidance for the third quarter of 2017 of between $73 million and $75 million.
I'll now turn the call back over to Homi for some final comments.
Thanks Harriss. Given what Harriss said earlier, we feel the strength of our MBX business in particularly the sample-to-answer target of $45 million will offset the slightly lower growth expectation in our LTG Group. We are very confident that we will achieve our 2017 revenue guidance range of between $300 million to $310 million or between 11% to 14% growth of 2016.
So in closing, our diversified business model continues to drive meaningful double-digit growth in 2017. Overall, the Nanosphere acquisition is being very positive to our overall strategic direction and we are very pleased with the speed of the integration. We are committed to investing wisely in all the pipeline development across our entire business. This will be done through both internal and external means while never losing focus on the bottom line.
This ends our formal comments. Operator, please open the line for questions.
Thank you. [Operator Instructions] Our first question comes from the line of William Quirk with Piper Jaffray.
Great, thanks and good afternoon, everybody. First question from me is your comments Homi regarding VERIGENE 2 [indiscernible] can you explain that? I realize that you can't go into too much detail, but I was just trying to get a better handle of your product delay or you are not killing the project.
Delay as you have all seen and you have seen the VERIGENE 2 in AACC, but I think it’s accumulation of few reasons for that and I can go through the reasons. It will take me a few minutes, but let’s go through them, so everybody understands. First I believe VERIGENE 1 is exceed all the – exceeded our expectation. It’s doing very well as a matter of fact, I think accumulate cells up to day are achieving $100 million.
Secondly, we are receiving very good positive feedback from customers. They like the system, they like the flexibility, they like especially the pricing we are offering them. So, we don’t see a reason at this stage to go and replace or an urgent need to go and replace. Secondly, the Palmetto creates some uncertainty about what’s will happen in pricing, reimbursement and on to a project. Thirdly, the clinical price for this is the first one for the empiric is also $5 million in 12 sites and beyond that we have done a great job with the FDA. I think under my watch we cleared six or seven FDA clearances. We all have done it below the 90 base or again when you go to a clinical trial you want to make it a very clear submission successful.
Now behind that, we have some internal issue that be – and we set up a target that we have failure rate of the cassette [ph] below 5%. We are not achieving it, we are in the range still single digit between 5% to 8%, 9% but its overall system and I would like to push it below 5% before we start the clinical trial. Just as a side note I believe some other company might start it, but because we don’t have any gun to our head start it because of all of what I said earlier, I’m not in a rush to start it.
Now beyond that, we have to remember another thing that both into the picture in VERIGENE 1 we have currently five FDA clearance assay and we are now looking what is the consequence if we initially we have gone to launch only with enteric assay, if it's not worthwhile to wait and launch it with at least another two or three assays together because again when you say give one assay to a customer on a platform you may be will not utilize it for the full extent of the platform.
So for all of those above reasons we said, you know what, let's take our time, let’s pause for a while, let's see how things are falling into place especially also the Palmetto and obviously I would like to see that we are achieving below 5% and then we will decide when to start the clinical trial.
Now one more thing just to add, we are in the, keep saying to you guys all the time it varies and we are in the business of making money and we need to make sure that when we launch a product we are able to make money almost from the beginning especially when you have a product like the VERIGENE 1 which is doing very well for us.
Okay got it. Thanks Homi, I appreciate all the color there and obviously I will stay tuned on how that transitions internally. Second question and I’ll jump in the queue here, but just thinking a little bit about the success that you guys have had with Nanosphere, obviously this is an asset that was struggling prior your acquisition and so maybe you could just help us explain to us why is it so much more successful in your hands, is it the greater certainty that obviously the company Luminex in this case is going to be around in a year whereas obviously Nanosphere had some cash flow issues or is it unit pricing strategy, just help us think a little bit about why you are demonstrating some success here in the market? Thanks.
I think it’s a credit is we have a good team here that knows how to execute, behind that I believe the integration of the sales for integration of manufacturing. You saw all being under a larger company. We went to customer and we showed them that we’re going to support them. We converted the lot of sites that where in evaluation and the component to [indiscernible].
So, I think overall the stability of Luminex and the quick we integrate this business and by the way we continue to invest a lot in the VERIGENE. We actually increased the size the foothold of the building. We got more place there in order to expand the manufacturing. We're bringing more automation into that.
So we are doing a lot of things that relatively Nanosphere is a small company or not small but express under financial could not afford to do, we can afford it and I think we translate it. I personally, honestly I did not think that we’ve seen fourth quarter will turn in $20 million or above losing business into profitable business, neither I expected as I said earlier of the VERIGENE 1 will have a so much positive feedback from customer and how stable and how much they like it.
I personally thought that we need to move very, very quick into VERIGENE 2 just because it wasn’t fully automated is the VERIGENE 2, but customers are telling us, guys we are extremely happy and we are having a great system here, so all of there above helped us a lot here.
Got it. Thanks guys.
I appreciate it.
Thank you. And our next question comes from the line of Tycho Peterson with JPMorgan.
Hey guys, Steve Reiman on for Tycho. Thanks for taking my questions. Homi, you just, you mentioned this a little bit, but obviously Palmetto recently came out with drop guidance trying to limit the number of targets on certain channels. Can you talk about how you are thinking about this guidance particularly in the context of your Flex RP panel to get the [indiscernible] potentially address some of the, CMS' concerns? And then I know it's fairly recent that you are seeing customers pull back on capital purchases until there is more certainty on reimbursements?
No, actually let’s put it like this, Palmetto is helping us. I think it giving us very strong competitive advantage. We have the flexing panel as you mentioned, but we ended, if we look at in the enteric even they say we have now the enteric assay we have now in the pathogens we have is perfectly fit to what Palmetto is asking. And again, I think part of success of the total offering that we are giving to our customer is pricing, okay. We are much lower than any other competitor in the market.
Beyond that, we are the only company that has been able to integrate together the low-plex which means there is the targeted to syndromic assay which is the Nanosphere and above that we have the traditional Luminex multiplex in the non-automated. So the overall solution is helping us to be extremely competitive in the market. We have the great success stories going to new customer or existing customer and opening the door for the full solution and that’s why we are feeling very strong where this direction is go to, so again Palmetto, sometimes we need luck, but Palmetto is helping us see compared to our competitor.
Got it. I appreciate all the color. And then congrats on the Japan reimbursement. It seems like a pretty large on cash opportunity on the automated system front. Can you talk about how big you think this opportunity could be and then what type of ramp you expect in the Japanese market?
Yes, I mean again it’s so, I could think show me the money and here we are not directly working with Hitachi, but Hitachi is testing like 1000 hospitals that can be addressed with the system. Obviously in Japan we need to place the system so that will take a while, while Hitachi will start placing the system and eventually building up the reagent business or basically their [indiscernible] business part of that, but it’s a big opportunity and we’re trying to allow it to develop additional assay into this market.
Obviously the Japanese market needs blood culture, they don’t have any testing though and I think it could be two days Steve. It will not take one year or two years, it is fully couple of years, but we’ll build a substantial installed base and substantial revenue. And I think Hitachi is a, I have a lot of knowledge in Japan, I spend a lot of time Japan in my life various company and I think Hitachi is looking like a strong partner to do the business there.
Got it. And then if I can just sneak one last one in, any update on the new swap contract, this still what is going to end mid 2018, I know you had given the dates before obviously that new channel [indiscernible] more dynamic with new products? Thanks.
No, I think for a - in order to look at your projection for a next stage, I think at this stage the best is to assume that CS will expire by the end of this year and new swap in the end of the June next year. We will keep you updated when we are ready to update you.
Thank you. And our next question comes from the line of Dan Leonard with Deutsche Bank.
Thank you. So first off could you elaborate on the research funding challenges which impacted your licensing forecast and do these, are these challenges anything that would influence review of 6% to 8% secular growth rate in the licensing business?
So Dan, the views, challenges are plural and I think we talked about the singular challenge. This is the fact that our research business, partner business swap primarily was a result of a funding challenge with one particular customer on one particular project. It happened to be you can think about it in terms of about it cost us may be 2% of projected growth in the partnership business. As a result that funding could comeback in future years, what we are for 2017 the customer won’t be funded for this particular product and as a result the significant amount of big purchases won’t happen.
Okay, and then for my followup, as you reassess VERIGENE 2 launch plans how does this impact your menu expansion plans on the ARIES or the VERIGENE 1 or is it too soon to say?
Okay, it is VERIGENE 1 we are submitting as a fair there hopefully it will happen next week even a goal base [indiscernible] thing. We are embarking on a clinical trial for the MLCA [ph] and we have a few other things in the pipeline there. On the same time say we start working what it means for Verigene 2 as I said earlier in call try to launch it when we launch it we say additional assays, so there is a lot of development work in the background that we are working on.
Understood. Thank you.
Thank you. And our next question comes from the line of Daniel Arias with Citigroup.
Good afternoon. Thank you. Homi, on the C. Diff approval, do you have a ballpark sense for many of the installed ARIES systems you would expect to sort of meaningfully adopt the assay? Obviously it’s a critical bug to have there, but there are bunch of platforms that offer it. So I’m just curious how much of an immediate impact you think that is going to have?
I don’t have been immediate number, I can come back to you about that, but obviously it’s a major sale and all the sale force is very enteric with that especially with two other companies not major one that I am having some difficulty with they say we see fairly big wins in this area, but yes, this is I would say one of our best assay to launch in the field and the sales force is excited about it.
Okay, and then may be on VERIGENE, I know what the time been out, but there were a bunch of instruments that were in line but they were not running. I think it was close to 100 or so, can you just talk about the extent that you have been able to get those turned on and whether that's something that’s sort of built into expectations or is that may be better thought or there is upside from here?
Yes, so Dan, this actually relates back to one of Bill's questions earlier about what why some of the success happened after we took over Nanosphere. And lot of that had to do with financial stability and lot of the customers that had this on incentive valuation but hadn’t yet converted the live instruments. They got extremely conformable with us once the acquisition was made and the financial stability of the company was insured.
So, a number of those instruments we’ve closed. They’ve gone a long way towards providing a component of the growth we've experienced, but other is being experienced as well from just closing new accounts, new accounts that weren’t in evaluation mode when we acquired the company. So really the growth was attributable to both, I don’t have a percentage to tell you whether it was 50-50, 60-40 whatever, but I do know that there have been significant contributions from both sides of that equation.
Okay, thanks for that. Homi, can I just sneak one more in since you made a comment on M&A is there a direction that you feel like you want to head in and along those lines what metrics would you think are the relevant ones to just sort evaluate a deal?
Yes, I mean we’re looking at deal today that have revenue more in line that we can have some synergy and help it. We are looking at revenue both sides of the organization in the local or diagnostic business, but also can we do something in our traditional business. So, we are looking at all those directions and unfortunately and I must say we probably look on all the disease over 40 deals, some of them small, some of them are little bit larger. But we have not found something that we feel that we should go ahead with that so, we keep keeping ourselves busy.
Okay, thanks very much guys.
Thank you. [Operator Instructions] Our next question comes from the line of Brandon Couillard with Jefferies.
Thanks. Good afternoon.
Harriss, excuse me if I missed this, but did you give the breakdown within assay revenue between generic [indiscernible]?
No, we didn’t see up was healthy and actually grew year-over-year and the CF revenues continues to have success with CF revenues are gaining other accounts, closing additional previous logic accounts and finding other opportunities across the U.S and Western Europe.
Infectious disease revenue today because of the decline in our overall generics portfolio because PGx franchises says has constricted somewhat is a pretty significant component of the total and much greater than 50% of the total closer to 75% of the total is infectious disease relative to generics which is today really primarily CF and a little bit of PGx and some P450 but not a ton.
Reporting the midpoint of your guidance for the third quarter, I mean the high end of the range for the year would imply a pretty big sequential step up in the fourth quarter. Could you help us understand what some of the swing factors would be that could get you to the high end of the range considering understanding that is that what is simply viable? And then secondly, the expectation or parameters you can give us for how you foresee the royalty revenue line playing out in the second half of the year?
Sure, so our partner sales to start with the royalties to begin with, our partner sales remain robust, royalties continued to grow at or about the rate of growth of the market in which our partners play which is in those mid single digits area. The partner business we mentioned had pulled back little bit. We had to pull it back a little bit as a result of that funding challenge from one of our customers. There certainly was additional traction by others of our partners we could see incremental bead revenue there that currently is not built into our sort of midpoint expectations.
We have the onset of the respiratory season that comes here in the fall particularly around Thanksgiving, but should it come earlier there is opportunity there for upside. Continued traction with our automated sample systems, especially for C. Diff and we have been trying to be conservative on all of our productions, projections especially with respect to ARIES given the launch and so that certainly could have an effect. Should LabCorp make a decision to not discontinue use of the CF product that could provide an upside at the backend of the fourth quarter. So there is a number of irons in that file they could help us hit the top end of that range.
Pretty good, thank you.
Thank you. And our next question comes from the line of Brian Weinstein with William Blair.
Hi, guys. Good afternoon. Thanks for taking the questions. Can we go to Palmetto just a follow up on that, first of all are you aware of anybody else other than Palmetto, any other mats [ph] that are considering this policy? Second of all, what percentage of the volume do you think potentially is impacted in another words, what percentage of respiratory testing or GI testing is done on an outpatient basis because obviously the inpatient would not be impacted by this? Thanks.
Brian, I’m not familiar at this stage if anybody behind Palmetto, but as we know Palmetto is setting the tone. Okay, so to be seen. Secondly, as we spoke before, more so far use are in hospital base, so we don’t know what impacts, but obviously we see it as overall positive to Luminex.
Okay, on ARIES did you break out what the revenues were for ARIES versus VERIGENE within that total sample-to-answer?
We did not.
Are you willing to?
No, we talked about our entire sample-to-answer portfolio because of the portfolio process, we take in placing with actually and really Brian, this is a function of a number of sales that have been made because we have the ability to offer both solutions to the same customer and as a result ARIES has actually sold better as a result of having VERIGENE and VERIGENE has sold better as a result of having ARIES in the non-automated platform.
So you have to look at the molecular portfolio as an entire portfolio and not individually because individually I think that will almost mean you run the risk of getting caught in minor fluctuation setting off an unfortunate or inappropriate thoughts related to the, to the product line.
Okay, understood and then the last question from me just going back to, I think was Brandon's question on royalties. It looks like the first quarter was up about 1%. You obviously were this quarter down about 5%. Is this really just a function of timing? I know you said that it was, that you still expect to see growth in line with what the out sales are, but what are the out sales, I mean what is that at this point and why was the first half a little bit weaker than what you guys typically would have experienced? Thanks.
Yes, let me give a couple of ways to think about it. Number one, the first quarter revenue as you know Luminex reports royalties. They are reported, they are recognized on an as reported basis, which means typically the royalties are about a quarter and a year. So, the royalties in the first quarter relate to the fourth quarter of every year. Within every first year when every first quarter of every year there are minimal royalty payments.
So partners had minimal obligations to meet every year, they don’t meet those obligations necessarily in the fourth quarter the previous year, so they make the through up payment in the first quarter every year. There is always that component that shows in the first quarter and then it is absent in the second quarter. So, when you look at it sequentially it apples-to-apples, it looks as if there was a downward decline when there isn’t, when you eliminate some of those one time features.
There is also royalty audits so we perform, when we find royalty audits, the amount that’s paid as a result of the royalty audit is recognized in the quarter in which it was paid. This year we had some that we collected in the first quarter of this year and not in the second quarter. Obviously they don’t repeat every quarter and as a result there was some bias there. There was also occasionally times where a partner's accounting group reports royalties earlier than one might expect. In this case we had a situation where a partner that reports royalties on a monthly basis, reported four months of royalties in the first quarter and two months of royalties in the second quarter.
So you end up with timing differences there to where the year-to-date number is exactly where it’s suppose to be, but on a quarterly basis although minor relative to total revenue royalties by itself there can certainly appear to be some more significant variations. So overall we are comfortable with royalties, we’re comfortable with the activities our partners are having, comfortable with the success that they are having and are confident that the royalties will continue to grow and you certainly would expect in the coming quarters to see royalties higher than they were in the second quarter of this year.
Okay, thank you.
Thank you. And that concludes our question and answer session for today. I would like to turn the floor back over to Homi Shamir for any closing comments.
Thank you operator and thank you everyone for your attendance on our earnings call. We look forward to seeing you in person in the very near future. Have a great day.
Ladies and gentlemen, thank you for your participation in today’s conference. This does conclude the programme and you may now disconnect. Everyone have a great day.