MDC Partners Inc. (MDCA) CEO Mark Penn on Q1 2019 Results - Earnings Call Transcript

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About: MDC Partners Inc. (MDCA)
by: SA Transcripts
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Earning Call Audio

MDC Partners Inc. (NASDAQ:MDCA) Q1 2019 Earnings Conference Call May 7, 2019 8:30 AM ET

Company Participants

Alex Delanghe - Chief Communications Officer

Mark Penn - Chief Executive Officer

David Doft - Chief Financial Officer

Conference Call Participants

Caroline Rehfuss - BMO Capital Markets

Avi Steiner - JPMorgan

Ryan Walter - TSA

Todd Morgan - Jefferies

Jeff Galloway - Amundi Pioneer

Operator

Hello and welcome to the MDC Partners First Quarter Results Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Alex Delanghe, Chief Communications Officer. Please go ahead.

Alex Delanghe

Thank you. Good morning, everyone. I would like to thank you for taking the time to listen to the MDC Partners conference call for the first quarter of 2019. Joining me today from MDC are Mark Penn, Chief Executive Officer and David Doft, Chief Financial Officer.

Before we begin our prepared remarks, I would like to remind you that the following discussion contains forward-looking statements and non-GAAP financial data. Forward-looking statements about the company, including those related to earnings guidance are subject to uncertainties referenced in the cautionary statement included in our earnings release and slide presentation and are further detailed in the company’s Form 10-K and subsequent SEC filings. For your reference, we have posted an investor presentation to our website. We also refer you to this morning’s press release and slide presentation for definitions, explanations and reconciliations of non-GAAP financial data.

And now to start the call, I would like to turn it over to our Chief Executive Officer, Mark Penn.

Mark Penn

Thank you and great morning. After nearly 2 months on the job as CEO, I can affirm that MDC has an extraordinarily talented group of people and company is operating at the highest levels across all marketing services. I believe that the future of the group as it adopts to the changes in the industry and improves its controls and operations is very strong. We have now issued guidance for the rest of the year and are providing preliminary guidance for the next year that projects increases on our margin to industry standards and that we can anticipate can return us to growth. The group is well positioned for the disruptions that we’re seeing in the marketplace. There is continued emphasis and desire for topflight creativity, and on a recent Ad Age ranking of A list agencies and agencies to watch. MDC had 4 agencies out of the 20 firms on those lists despite having about 1% share of the marketplace and the industry at large continues to celebrate the innovation born from our agencies, 72andSunny, Super Bowl worked for the NFL took top spot in this year’s USA TODAY Ad Meter. Our media agency Assembly was recently named a lead agency by Forrester.

Our PR firms, including Allison and Partners, Hunter and Veritas are finalists in the Holmes Report agency of the year rankings. Both the work of Team and Anomaly were honored in Adweeks’ Experiential Awards. Several of our firms are routinely named among the best places to work in our industry and this bring the entertainment industry acknowledge the enormous creativity of our talent with ACE Content’s producer Evan Hayes winning an Oscar for the documentary Free Solo, and 72andSunny work for the Truth Initiative winning an Emmy for short format daytime program. At the same time, more clients are purchasing creative services on a competitive project or roster basis than appointing single agencies of record. This is decreasing the size of certain top client assignments and disrupting some long-standing contracts and relationships.

The clients are also seeking increased data, analytics, research and digital services to connect better with their customers and catch evolving trends. The digital marketplace is growing and our fully digital agencies are showing very strong growth along with those agencies that offer strategy, bundled with creator. At the same time, public relations, which is housed in our specialist communications segment and has for years been a shrinking sector, is showing growth as clients look for more earned media ways to reach customers across both conventional and new media. We have developed and expect to soon start deploying a plan for all our agencies to grow in this new world of marketing. This plan will ensure that our major agency groups will be able to offer data analysis, digital, research, production, media and strategy in a coordinated fashion at the highest levels along with creative services.

Importantly, this can be achieved by aligning the talent we have in the network rather than through new significant new investments. Especially in the online space, media is again being bundled with creativity, and we will ensure that all our creative agencies have strong media offerings coordinated with our award-winning creative operation. There will be a heightened focus on leveraging our media properties for the rest of the network as we have state-of-the-art programmatic operations and have built an award-winning data operations to support the media deployment. As we deploy this plan, and as new accounts are won, we also expect to cycle through some client dislocations that occurred at the beginning of the year, enabling us to return to growth. It’s also worth noting that while U.S. companies were cutting back in fear of a recession, it’s now become clear that the economy is on relatively firm ground. We also saw some larger holding companies especially those with higher percentages of consumer packaged goods clients with contractions in the quarter of up to 9% in the U.S. Meanwhile, our portfolio who has top clients include more cutting-edge technology companies and disruptive brands, showed smaller cutbacks. This client balance gives us greater opportunities to grow as the economy grows in a more sustainable trajectory going forward.

While realigning our services for this new world, we’ll also trim our cost to make the organization more nimble and competitive. Our plan is to do this by reining in cost at the center, rationalizing real estate cost, rightsizing the compensation to revenue ratio and creating greater inter-network corporation. This means we will be creating internal marketplaces for production, media, freelance talent, IT and tech development. So that internal utilization rates can be increased. This business has a simple cost structure, essentially people in real estate to the extent we can drive more efficient use for what we are already paying for, we can flow significant incremental dollars to the bottom line. I’ve targeted $35 million of run rate reductions or enhancements to be in place by year-end. We expect that our 2-year plan can generate in the range of $100 million of free cash flow between the time I began as CEO, and the end of 2020 after any scheduled deferred acquisition cost. It will take time to implement this program of change, and do it in a way that engages all of our agency partners while anticipating and capitalizing on industry trends. As the plan unfolds, we will make more details available to investors on subsequent earning calls and investor meetings.

The environment for marketing services is undergoing some far-reaching changes, enabling us to reach more consumers in more ways, greater targeting than ever before. Direct-to-consumer sales are surging, many big tech companies are growing over 20% a year even at scale. We believe we can harness the great talent across the MDC network to tap into growing market needs and to do it with greater financial discipline. Our goal is to strengthen the position of MDC in its agencies in the marketplace, providing significant returns for shareholders.

Let me turn it over to David now for the specific results of the quarter.

David Doft

Thank you, Mark. We had a solid start into 2019, and we delivered much improvement to the bottom line compared to a year ago. The impact of our cost savings initiatives in 2018 are clear with reductions in staff, and real estate and corporate expense during the quarter helping to drive adjusted EBITDA growth of 175% versus the prior year. We see continued opportunity for efficiency in 2019 and remain focused on optimizing our profit margins while reinvigorating the business.

Overall revenue increased just shy of 1% while organic revenue declined 0.9%. Net revenue declined 3.3% on an organic basis. This was due to variability in existing client budgets with some shifts to project-based relationships as opposed to historical annual retainers, which provided more consistent revenue streams. We are working, as Mark referenced, to adopt to this key change in the marketplace. The other driver of the revenue weakness was our media services segment, which declined double-digits.

Excluding this segment, organic revenue would have been positive. We’re also seeing continued growth overseas, which remains a large opportunity for several of our business units. And growth in specialist communications and digital services, which falls within our all other segment grouping. The adjusted EBITDA growth of 175% to $21.5 million was driven by absolute reductions in staff cost, admin costs and occupancy costs and corporate costs from last year’s significant restructuring efforts. This figure is after about $3 million of restructuring cost within the quarter from continued effort to reduce cost in the new year and included shutting to money-losing overseas offices.

Covenant EBITDA is a trailing 12-month figure that is contractually the figure of which our bank covenants are calculated and came in at $183.8 million. Covenant EBITDA improved by 6.5% from the fourth quarter of 2018 with both quarters reflecting the pro forma impact of the Kingsdale divestiture. We provided a new reconciling schedule in our press release in Schedule 5, so you can see how it is calculated. After a strong quarter of net new business wins of $26.4 million in 4Q 2018, we faced a decline of $11.7 million in the first quarter of 2019. These declines were focused in media and in several client changes at one agency within the Global Integrated Agencies segments. Outside of those areas of volatility, net new business wins were positive $21.9 million, highlighting the overall strong positioning of the broader network.

Our balance sheet continues to make progress most notably with the completion of the $100 million investment from The Stagwell Group in March. We have already discussed the details of this investment on our last investor call, so I won’t go into it again. But it more than offset the seasonal outflow of working capital that we typically see in the first quarter and allowed us to pay down $35 million on our revolver. We would’ve shown further improvement if not for the delay of $20 million $25 million of collections due to a financial system upgrade at one of our agencies, which lead to delayed invoicing. This should reverse and catch up largely in the second quarter. A reminder that the bulk of our deferred acquisition payments take place in the second quarter and is in the mid $30 million, and fund our semiannual interest payment. So we expect to remain in the revolver at June 30. However, we do expect to end the year out of the revolver and in a solid cash position. Our leverage ratio per our bank covenant ended the quarter at 5.05x, down from 5.2x at year end and fell below the 6.25x covenant. We expect to make continued progress on reducing our leverage ratio over the remainder of the year.

The sum of our deferred acquisition consideration and non-controlling interest on our balance sheet was $165 million, the lowest level in over 10 years. This is down from $200 million at year-end, largely due to the reduction of NCI from the sale of our interest in Kingsdale. With the payments made in the second quarter, I expect this figure will be reduced further at June 30. Given how far we have come to clean up these liabilities, it puts the company in a strong position to deliver cash to its balance sheet going forward as indicated by the cash generation guidance Mark provided earlier.

In terms of guidance, for 2019, based on what we see right now, we expect organic revenue growth to come in between flat and up 2%. Foreign exchange rates should decrease revenue by 1% and the net of acquisitions and dispositions should decrease revenue by 90 basis points. We expect covenant EBITDA of between $175 million and $185 million.

Looking out to 2020, on a preliminary basis, as part of Mark’s 2-year plan, we are looking for improved organic growth to the plus 2% to 4% range. Covenant EBITDA of $200 million to $210 million, implying at least 100 basis points of margin improvement along with the cumulative $100 million of cash generation after currently planned deferred acquisition-related payments that Mark has already discussed.

Before we take your questions, I’d like to turn it back over to Mark for a couple of comments.

Mark Penn

Thank you, David. As I mentioned earlier, I’ve spent the last 2 months working closely with the team here to assess opportunities for growth and to develop a plan that will enable us to build for the future. As part of that plan, we’re announcing the appointment of a new Chief Financial Officer, [indiscernible], who comes to us with tremendous technical accounting expertise and agency experience having worked with Omnicom, Publicis and Interpublic for over 15 years and General Counsel, Jonathan Mirsky, an experienced corporate attorney with deep experience in complex corporate transactions. We are extremely grateful to David and to Mitch Gendel, who have both been integral to the building of MDC Partners into the remarkable network it is today as well as to ensuring the company’s firm footing in order for us to thrive going forward. David and Mitch will continue to work me to ensure a seamless transition over the coming months, and we look forward to introducing you to Frank and Jonathan on future calls.

Now, we would like to open it up for questions.

Question-and-Answer Session

Operator

[Operator Instructions] And the first question comes from Dan Salmon with BMO Capital Markets.

Caroline Rehfuss

Hi guys. This is Caroline on for Dan. Mark, to start, I was curious if you could talk little bit further about what collaboration between Stagwell and MDC might look like in the future? And then second, in light of some portfolio changes, can you discuss the longer-term EBITDA margin outlook? Are you guys still targeting the 17% to 19%? And if so, what could drive upside to this longer-term target?

Mark Penn

So first, let me just say that there hasn’t been much time yet for any Stagwell collaboration with MDC firms as really, we’ve been taking hold of problem in developing the plan going forward. Some agencies have met each other. I believe that there will be some synergies in complementary services that are over at Stagwell but it will be up to the agencies to get together. We’re having a partners’ meeting later in the month where agencies will be introduced to each other and work out whether or not the synergies make sense. In particular, over at Stagwell, they buy a lot of media in certain areas but don’t have a media firm. And so possibly they’ll be able to use MDC Media Services and on the other hand, they have very, very extensive research capabilities at Stagwell and have very limited research capabilities outside of Northstar over at MDC. So I think there’ll be some opportunities for good collaboration but that’s to come in the future. The second part, I don’t know, David If you want to address her, her question on those numbers?

David Doft

Sure. So, we for a long time, talked about a target margin of 17% to 19%. I think based on the plans that Mark has and some which we talked about a little bit but some we’ll talk about it in times to come, we surely would expect that we have room to the upper teens on our margin as the company focuses on beginning the centralized more back office capabilities, drive more efficient use of real estate and manage overall compensation to revenue ratios to a more appropriate level.

Caroline Rehfuss

Great thank you guys.

Operator

Thank you. And the next question comes from Avi Steiner with JPMorgan.

Avi Steiner

Thank you for taking the questions I’ve got a few here. One, net new business wins was negative in the quarter. Can you give us a little more color on what drove that? And I guess more importantly, given where we sit today and kind of the pitch biz you guys know you’re involved with without I’m sure you can’t give specifics, but do you see that accelerating or improving rather throughout the year?

Mark Penn

Yes. I mean, I think that there were a number of things that happened at the end of last year and the beginning of this year that came together. And as I noted in the opening discussion, they seem to affect two areas, one particular agency and the media operation. And so, outside those two areas, there was very strong new business growth, though right now it’s very, very significant pitch activity. And what typically happens, as I pointed out, once in a while, you have a number of clients that make their change decisions at the same time. Good and great agencies like we have then take a certain number of months to dig themselves out from that and find the next set of clients, it’s a typical process. I don’t see any continuing trends beyond those, quite the opposite. I see a pretty vibrant new business operation. I haven’t found actually the net new wins number looking back is as accurate as other numbers because today a lot of project work means that it’s even more important to continue to look at how you’re able to expand existing clients into what extent especially when you look at the size the many mega clients that actually these agencies have. So over time, I’ll actually be reforming the metric. I kept it here because we don’t want to have a jarring transition, but we’ll be looking to more accurately portray the flow of business. But having said all of that, I’ve given a pretty clear revenue projection and that’s based on 20 meetings across all of the different groups and understanding exactly where they are. And I’ve tried to be reasonably conservative in those knowing that there are a lot of pitches going on.

Avi Steiner

Okay. Great. And then you made some comments in your opening remarks about kind of the decreasing size of the top client assignments, client seeking more analytics and data, I’m kind of building on a prior question. But in your view, do the MDC agencies have those abilities on its own, on the analytics and data side? Or is that something that either the Stagwell Group agencies bring in? Or there are other opportunities out there that you would need to help tackle that area?

Mark Penn

It’s quite interesting because within the MDC group, there are tremendous data capabilities, the award-winning media operation has built up, right, a state-of-the-art data analysis operation to the extent Stagwell has more performance marketing that can also come into play on a global basis. But actually, the assets are here. The biggest issue that I’ve kind of seen time and time again is that the assets are within the system, they’ve been built up. I look for very long time to find, for example, programmatic advertising operations. We have 2 excellent programmatic advertising operations within the network. What hasn’t happened is that there hasn’t been the strong enough connection between the lead agencies and there are really five significant lead agencies, right and integrating the full stack of services. So, remember, for a number of years, your plans were dividing everything up. Now actually they want a greater collection of services but they’re also generally appointing 1 or 2 agencies and having them bid in a roster sense. And so, I believe through this plan that we will be able to better bring to bear on a coordinated fashion the talents that we really have in the network that have been disconnected from the incredible sales operations and sales flow that we have in the 5-top large-size agencies.

Avi Steiner

Great. And then just a couple of housekeeping/modeling items, is it possible to reconcile covenant EBITDA, the guide relative to what reported EBITDA would be? Is there some dollar add back we should be thinking about?

David Doft

No. There is a reason that we haven’t spoken about it in that way is because there are plans being developed that will have onetime costs based on future savings that haven’t been implemented yet. And so, we thought it made sense to guide to a number that excluded those costs, which is covenant EBITDA. And as we finalize some of those plans and have a better indication of whatever cost will make it clear to the Street. But at this point, the only number we have is what I mentioned in my remarks, was in the first quarter there was $3 million that was within the adjusted EBITDA number, right? That even add back to the covenant EBITDA as you see in the schedule on Schedule 5 in the press release where you can see the add back for onetime cost. Obviously, the other issue is the pro forma impact of acquisitions and dispositions, which is a drag given the divestiture in the first quarter. So, we’ll give color as we go along, and we have better visibility on what those costs might be.

Avi Steiner

Great. A couple more here and then I promise I’m done. One, can you help me with just any other cash items this quarter? I know the $100 million of cash came in. I would expect maybe a slightly higher cash balance, you talked about $20 million to $25 million non-collection in the first quarter. Is there anything else to call out that you received payments in Q1 or anything else just so we can reconcile that?

David Doft

Sure. We funded $3.6 million of deferred acquisition consideration in the quarter, that was also a cash outflow. As you can see, we had a little over $3 million of CapEx in the quarter as well. Otherwise, it was just the working capital swing. Our business historically has had a large outflow in the first quarter tied to the seasonality of the media business particularly. In this quarter, outside of the system change, which had an impact at 1 agency, it otherwise would have come in fairly similar to what last year’s first quarter came in, in terms of the seasonality of the working capital flow. So, as I mentioned, we expect that to largely reverse, if not entirely, within the second quarter and get back to a more typical level for midyear.

Avi Steiner

I am going to leave it there. I may come back. Thank you, gentlemen.

David Doft

Sure. Thanks Avi.

Operator

Thank you. [Operator Instructions] And the next question comes from Ryan Walter with TSA.

Ryan Walter

Hi guys. Good morning. Just following up on some of obvious comments on the covenant EBITDA outlook, is the right way to think about it, if you’re talking about revenue, organic revenue growth of 0% to 2%, but covenant EBITDA kind of flattish is it the FX headwind and the acquisition disposition headwind that’s leading to that to the flat sort of outlook on covenant EBITDA?

David Doft

Well, covenant EBITDA, it’s you look at what we disclosed here for 4Q, given the Kingsdale divesture was about $172 million. So, our, the EBITDA we’re talking about for this year then is up, it’s not flat. So, I would just argue with that a little bit. Ultimately, the FX headwind definitely impacts bottom line by 1% to 2%, top line about 1% as we indicated. We have a couple of fairly profitable businesses that fit both in Canada and over in Europe that are impacted by that. So, there’s little bit there. But ultimately, there is a lot of moves that are being made this year, and while some are, they’re sort of restructuring cost that can be added back per the contract we have with our banks in covenant EBITDA. Some are cost that we need to make room for in this year’s numbers around driving some of the growth initiatives and collaborations that Mark referred to earlier. And so, we made some assumptions around that. Ultimately it sets us up for a nice ramp again in 2020, which is why we want to give a preliminary view of that year, much earlier than we normally do.

Mark Penn

Again, I think that was the point in providing the second-year guidance that this is a year in which we’re implementing the plan. And so, we try to be reasonably conservative in the projections and hedge for things that could go right or wrong. But in general, this is an increase, I think, in covenant EBITDA. A definite increase when you, pro forma back for the divestiture. And I think that we’ve got a lot of measures to implement over the next few months.

Ryan Walter

And just when from a timing standpoint you think you could get more detail on the cost saves and the timing of them and the cost of them, and all that?

Mark Penn

I think it will become clearer and clearer in the next 60 days.

David Doft

That’s right. And I think we’ve been very clear on cost saves from the 2018 initiatives, and we’re surely looking at significant incremental opportunities here in 2019 as well.

Ryan Walter

Okay. Just shifting gears, one for Mark, you talked about the trends in the industry with the agency of record trends, people moving away from that. Can you talk about what percent of your business is still retainer versus project and maybe sort of the pace of change that you’re seeing?

Mark Penn

Couldn’t give you a specific figure of retainer versus project but there is a lot of hybrid contracts here in which you do have a retainer and then you’ll be on the roster, and there’ll be maybe 2 or 3 agencies that will be on the roster. So that kind of restructuring means that retainers are still there. I don’t see and then on the other hand, there’s sort of a countertrend, which is while the very largest companies maybe trending that way, more midsized companies need more bundled services. And in fact, the RFPs you’re seeing coming through for those companies are in the opposite direction. So, I couldn’t give you a specific number. Having reviewed all of the major client relationships, what we’ve seen is about a 20% decrease in the size of a top client. But at the same time, we’ve seen kind of a healthy growth of new clients. And the project way of marketing gives you also the ability to win business more quickly at the same time, because in fact, they’ll be making a lot of frequent decisions about of our projects. So, if you’re nimble, if you’ve got an operation that is across the skills, you have a much greater ability to pick up business across a network given these kinds of decisions. So, it’s going to mean a kind of a lower guaranteed amount, a greater upside within these larger companies and clients. And I think a coming together of multiple services in the midsize clients who in particular need digital and media buying together.

Ryan Walter

Alright. If I could just ask one more, probably good transition, could you mention the bundled services that a lot more clients are looking for can you expand on the opportunity then on the media services side especially given the shortfall this quarter? What your thoughts are sort of the outlook? And maybe David, you can chime in on the effects on working capital?

Mark Penn

Sure. As you can tell from the script, a lot of my time will be spent on this particular issue. And as frankly, I said all along, I think even on the last call and in multiple interviews, right now, we have well over $1 billion of creative fees and the amount of media that we’re selling in relation to that is too small because there is the media division in many ways were separated from the kind of organized selling that should occur across the board, across all clients on the creative side. And I think that, therefore, we see a very, very significant upside in bringing that connection together. I think that it would almost incalculable how big that upside is if we’re successful at reconnecting that trend.

David Doft

In terms of the working capital impact, at this point given the trends, frankly, from last year to media business, we’ve been appropriately managing that and modeling that out. I surely, from where we sit here, don’t expect as large an outflow in 2019 on working capital as we had last year. But ultimately, if we can get the media business to stabilize and grow based on the initiatives Mark referred to, it actually provides us substantial upside in working capital and benefit to our balance sheet.

Ryan Walter

Great thanks guys.

Operator

Thank you. And the next question comes from Todd Morgan with Jefferies.

Todd Morgan

Thank you. I had a little bit of a question about some of the cost steps in real estate particularly you talked about. Can you just speak further about that? There’s been a number of press reports about kind of the opportunity there. Is the timing of the sort of the cash benefits just sort of more of a next year event, this year event? Any sense of the magnitude or the opportunity that it deserves? Thank you.

Mark Penn

Sure. Let me just say that I believe that the magnitude of the opportunity there is in the, let’s call it, $20 million to $25 million basis when I look at, I say, metrics achieved at the Stagwell property and properties or I look at the standard metrics across industry where you’d have closer to 150 square foot, a percent in an agency. So, as I look at this, there is significant opportunity. Now those opportunities take time to realize. We have several studies underway right now to look into how we can rejigger and realign. As you know, I’ve put up the headquarters for sublet to right there, trim what could be close to $700,000 to $1 million a year just in 1 move. But there is very, very significant opportunity in the real estate. But it will take some time to really to fully realize that because it moves, take 4 to 6 months even subletting things take 4, 6 or 8 months. So, it is something that we’ll project more into next year. And also, growth will also tend to right-size some of the real estate issues. And then the other thing that I’m doing is kind of making sure that the CapEx, the spent in terms of any research projects, is more in line so that we shoot for a target of CapEx no more than 1% overall. And I think to be really disciplined about the space, not try to build real estate palaces but to have really modern, clean, efficient spaces for people to work, particularly in an area where there is a lot more desk sharing than ever before. I think it’s an important change and there is a very significant amount of money there that I’m trying to unlock but it won’t be overnight.

Todd Morgan

That’s really helpful. Thank you.

Operator

Thank you. And the next question comes from Jeff Galloway with Amundi Pioneer.

Jeff Galloway

Hi good morning, thank you. Just to clarify. So, is that $20 million to $25 million long-term opportunities from real estate baked into your 2020 kind of preliminary guidance?

Mark Penn

No. I’ve baked in modest much more modest real estate reduction there.

Jeff Galloway

Great, thank you. And the second question is, you had given some color around how you expect the revolver balance to move throughout the year and also some guidance around free cash flow expectations over the coming months. With that in mind, I’m curious, last quarter you disclosed that you’ve gained some covenant flexibility to possibly repurchase some of your notes. Can you update us on any thoughts in that regard?

David Doft

Sure. Up to now we have not repurchased any notes. With Mark here, we want to take the time to allow him to get his feet wet, understand the initiatives that he wanted to put in place before we determined on whether use that capital for note repurchases or potentially keep it on the balance sheet for now. And I think we’ll continue to evaluate going forward.

Jeff Galloway

Thank you.

Operator

Thank you. And as there are no more questions at the present time, I would like to turn the floor to Mark Penn for any closing comments.

Mark Penn

Thank you. I just want to thank you all. I think we’re off to a reasonably good start in this quarter, and we expect to really make the kind of changes I think that enhance shareholder value in a significant way. Thank you all.

Operator

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