China Yuchai International Limited (NYSE:CYD) Q4 2019 Results Earnings Conference Call March 30, 2020 8:00 AM ET

Company Participants

Kevin Theiss - Investor Relations
Weng Ming Hoh - President
Thomas Phung - Chief Financial Officer
Kelvin Lai - Vice President of Operations

Conference Call Participants

William Gregozeski - Greenridge Global
Don Espey - Shah Capital

Operator

I would now like to turn the conference over to Mr. Kevin Theiss. Please go ahead, sir.

Kevin Theiss

Thank you for joining us today and welcome to China Yuchai International Limited Fourth Quarter 2019 Conference Call and Webcast.

Joining us today are Mr. Weng Ming Hoh, and Dr. Thomas Phung, President and Chief Financial Officer of CYI respectively. In addition, we also have in attendance Mr. Kelvin Lai, of CYI.

Before we begin, I will remind all listeners that throughout this call, we may make statements that may contain forward-looking statements within the meanings of the Private Securities Litigation Reform Act of 1995.

The words believe, expect, anticipate, project, targets, optimistic, confident that, continue to, predict, intend, aim, will or similar expressions are intended to identify forward-looking statements.

All statements other than statements of historical fact are statements that may be deemed forward-looking statements. These forward-looking statements, including, but not limited to, statements concerning the company's operations, financial performance and conditions, are based on current expectations, beliefs and assumptions, which are subject to change at any time.

The company cautions that these statements, by their nature, involve risks and uncertainties and actual results may differ materially depending on a variety of important factors, such as government and stock exchange regulations, competition; political, economic and social conditions around the world and in China, including those discussed in the company's Form 20-Fs under the headings Risk Factors, Results of Operations and Business Overview, and other reports filed with the Securities and Exchange Commission from time to time.

All forward-looking statements are applicable only as of the date they are made and the company specifically disclaims any obligation to maintain or update the forward-looking information whether of the nature contained in a release made on today’s call or otherwise in the future.

Mr. Hoh will provide a brief overview and summary, then Dr. Phung will review the financial results for the fourth quarter and fiscal year ended December 31, 2019. Thereafter, we will conduct a question-and-answer session.

For the purposes of today's call, the financial results for the fourth quarter and fiscal year ended December 31, 2019 are unaudited and they will be presented in RMB and US dollars. All the financial information presented is reported using International Financial Reporting Standards as issued by the International Accounting Standards Board.

Mr. Hoh, please begin your prepared remarks.

Weng Ming Hoh

Thank you, Kevin. For the four quarter 2019, China's GDP was 6%, the same growth rate at in the third quarter 2019. For the full year 2019 GDP growth was 6.1% which was the slowest annual growth in the last 29 years.

According to data reported by the China Association of Automobile Manufacturers, CAAM, in the fourth quarter of 2019, unit sales of commercial vehicles excluding gasoline-powered and electric-powered vehicles increased by 2.9% overall compared with same quarter in 2018. This growth included a 2% sales increased in the truck segment and 10.4% increase in the bus segment.

Unit sales of heavy duty truck increased by 13.6%, while the medium duty truck sales declined by 10.4% compared with diesel [ph] fourth quarter of 2018. Heavy duty bus sales increased by 17.9% and medium duty bus sales rose by 18.1% compared with [indiscernible] fourth quarter.

From the full year perspective, [indiscernible] from CAAM show that overall unit sales of autos in China sales 8.2% in 2019 from 2018 with [indiscernible] 35.8 million vehicle sold in 2019. This declined followed a 2.8% decrease in 2918.

In the commercial vehicle market [indiscernible] China, CAAM as reported at 2019, annual unit sales, excluding gasoline-powered and electric-powered vehicles increased by 4.5% overall compared with the 2018. This included a 4.7% decline in the truck segment and an 2.6% decrease in unit bus sales. Sales of heavy duty trucks increased by 2.1% while the medium-duty truck sales declined by 21.7%.

Heavy duty bus sales increased by 8% and medium duty bus sales declined by 2.3%. Auto sales have been affected by slower economic growth in 2019. In addition, the first stage of the National VI emission standards was implemented nationwide in July 1, 2019 for gas engine-driven vehicles. This early launch of the National VI emission standards for gas engines is well ahead of the mandatory implementation of diesel vehicles to be enforced between July 2020 and July 2021.

In the fourth quarter of 2019, although the engine sales were 94,649 units compared with 93,881 units in the fourth quarter 2018, our overall units sales into the truck engine market were down 4.3%, but we achieved a 49.8% growth in the heavy duty truck engine sales far surpassing the 13.6% sales increase in the heavy duty truck market.

Our net natural gas - National IV truck engines were well received in the marketplace in the fourth quarter of 2019 as demand for National IV engines accelerated due to mandatory national implementation.

Our sales to the bus engine market increased by 11.7% which exceeded the 10.4% growth in unit bus sales. This growth was led by double-digit growth in both the heavy and medium duty bus engine market.

Our overall off-road sales increased by 11.9% in the fourth quarter of 2019 with double-digit growth in industrial engine sales. For 2019 year our engine unit sales were 376,148 units compared with 375,731 units in 2018.

Our truck engine sales were down 1.2% but outperformed a 4.7% decline in the overall truck markets. Our sales for the heavy duty truck market achieved double-digit growth from 2018. Our bus engine sales decreased by 10.1% as our sales to light duty bus market dropped by double-digits. Our overall off-road sales increased by 9.3% in 2019 led by double-digit growth in industrial engine.

As a technology leader, we design our growth strategy by developing next-generation engine before the government mandatory implementation, which enable us to capture early orders and establish our leading market position.

For 2020 we have commercially introduced a portfolio of new diesel engine models, compliant with the on-road National VI emission standards for the launch of [indiscernible] vehicles by our OEM customers.

In addition, our model YC6K 08 [ph] engine was the first domestic diesel engines certified to comply with more stringent National VI emission standards which is expected to be mandatory in July 2023.

Already, the growing sales of our National VI gas engines increased our penetration into the heavy duty truck engine market in the fourth quarter of 2019. Our National VI emission standard technologies have also led to our newly formed strategic partnership with Sanchi Holding [ph] a leading producer of heavy duty trucks in China and with Foton Motor Company group for product support for National VI compliant engines and technologies, overseas market development and new LNG product development. We have taken other steps to enhance our growth opportunities in the future.

We are at the development stage of producing our first four new energy products and we anticipate expanding into a larger portfolio of new energy products in the future. Utilizing different technologies, design, our first new energy product, the next generation hybrid powertrain will seamlessly integrate electric motors into the combustion engines to enhance vehicle mileage and overall efficiency.

We have identified a number of end market applications for this new powertrain product, including semitrailers, dump trucks, mass transit buses, trucks and rubber tired gantry cranes and others.

Also our JV Eberspaecher Yuchai Exhaust Technology Company Limited is ramping up production of this new exhaust emission control systems for commercial vehicles to meet China National VI and Tier 4 emission standards. This emission controls will be used in our own engines, as well as the available for sale.

We achieved double-digit growth for international sales in both the fourth quarter and for the fiscal year 2019. We have enhanced our full potential by creating a dedicated operation to capture further market share in our neighboring nation Vietnam.

Our new business enterprise there is focused on wholesale and retail distribution, technical advisory and consulting, engine maintenance and repair services that attract new customers.

We also increased our ownership of YC Europe operations in 2019. We were honoured as our YC4A diesel engine won the 2019 China Agricultural Machinery Industrial Product Gold Award, winning this prestigious award at the annual Agricultural and Farming Equipment conference validates our efforts to improve the quality and performance of Chinese Agricultural Machinery.

The model YC4A is the best in class 70 horsepower agricultural vehicle engine featuring the highest torque in the marketplace. We were also honoured as China - as Yuchai engines propelled [indiscernible] that carry prominent veterans and their families in the seventh year anniversary celebration in the national day parade in Beijing. Many of the giant electronic screens used in the celebration used Yuchai power generators as well.

Our balance sheet remains strong, at the end of 2019 year cash and bank balances were RMB6.4 or US$916.1 million and trade and bills receivables were RMB7.7 billion or US$1.1 billion. Inventories were RMB2.8 billion or US$404.8 million. Due to our strong balance sheet and cash flow, we issued a cash dividend of US$0.85 per share in July 2019 to share our success with our shareholders.

Our new advanced engine portfolio that meets C [ph] National VI and Tier 4 emission standards is ready for full production as demand growth after these standards are being implemented across China.

Our technological leadership in diesel, natural gas and hybrid engines combined with our extensive service network continues to attract new OEMs and partners. On a separate note, on March 10, 2020, a dividend for the year 2019 of RMB402,040,944 was approved by GYMCL shareholders for all shareholders.

China Yuchai has a 76.4% ownership of GYMCL and the dividend will be paid to the Company in due course. This dividend attests to the financial stability and commitment to the Company's long-term shareholders during the current financial – current difficult market environment.

Looking into 2020, the outlook is somewhat clouded at present. However, we remain hopeful that limited trade agreement between China and US will be beneficial to both countries economies in the near future. The coronavirus is having an economy impact on the first quarter of 2020, but we believe its impact will gradually diminish in the second quarter and we will regain sales growth in the following quarter for 2020. The Chinese government will likely further implement policies to improve economic recovery.

With that, I would turn to Thomas to go with the financials.

Thomas Phung

Thank you, Weng Ming. Let me review our fourth quarter results for 2019. The revenue for the fourth quarter of 2019 increased by 25.4% to RMB 5.7 billion, US$814.6 million from RMB4.5 billion for the fourth quarter of 2018. The revenue increase was mainly due to a change in product mix.

According to data reported by the China Association of Automobile Manufacturers, CAAM, in the fourth quarter of 2019, sales of commercial vehicles, excluding gasoline-powered and electric-powered vehicles increased by 2.9%, truck sales increased by 2.0% with heavy-duty truck sales increased by 13.6%.

GYMCL's heavy-duty truck engine sales in the fourth quarter of 2019 increased by 49.8%. The CAAM bus market increased by 10.4% in the fourth quarter of 2019. GYMCL's bus engine sales growth exceed the market growth as the sales of medium-duty bus engines grew significantly. GYMCL's off-road engine sales rose in the fourth quarter of 2019, led by higher sales in the industrial engine market.

Gross profit increased by 28.5% to RMB1.1 billion, US$158.8 million compared with RMB0.9 billion in the fourth quarter of 2018. Gross margin was 19.5% in the fourth quarter of 2019 compared with 19.0% in the fourth quarter of 2018.

The growth in the gross margin was mainly attributable to product mix, and was partially offset by higher production costs related to the National VI engines in the fourth quarter of 2019.

Other operating income was RMB104.4 million, US$ 15.0 million compared with RMB64.4 million in the fourth quarter of 2018. The increase was mainly due to higher interest income and government grants.

Research and development, R&D expenses increased by 111.7% to RMB228.0 million, US$32.7 million from RMB107.7 million in the fourth quarter of 2018. Higher R&D expenses were mainly due to the further development of a portfolio of next-generation National VI and Tier 4 engines as well as improvements in the engines' quality and performance.

In the fourth quarter of 2019, the total R&D expenditures, including capitalized development costs, were RMB397.7 million, US$57.0 million and it represent 7.0% of revenue, compared with RMB222.9 million, representing 4.9% of revenue in the fourth quarter of 2018.

Selling, general & administrative, SG&A expenses increased by 36.5% to RMB663.2 million, US$ 95.1 million from RMB485.8 million in the fourth quarter of 2018. SG&A expenses represent 11.7% of revenue compared with 10.7% in the fourth quarter of 2018. The higher SG&A expenses were mainly attributed to higher warranty expenses and higher impairment losses on trade receivables in the fourth quarter of 2019.

Operating profit decreased by 3.6% to RMB320.8 million, US$ 46.0 million from RMB332.6 million in the fourth quarter of 2018. The operating margin was 5.6% compared with 7.3% in the fourth quarter of 2018.

Finance costs decreased by 12.8% to RMB27.1 million, US$ 3.9 million from RMB31.1 million in the fourth quarter of 2018 mainly due to lower interest rates on both bank borrowings and bills discounting.

In the fourth quarter of 2019, total net profit attributable to China Yuchai's shareholders increased by 9.3% to RMB209.6 million, US$ 30.0 million from RMB191.8 million in the fourth quarter of 2018.

Basic and diluted earnings per share were RMB 5.13, US$ 0.74 compared with RMB4.69 in the fourth quarter of 2018. Basic and diluted earnings per share in the fourth quarter of 2019 and ‘18 were based on a weighted average of 40,858,290 million shares.

Now let me go over the 2019 annual results. Our revenue increased by 10.8% to RMB18.0 billion, US$ 2.6 billion compared with RMB16.3 billion in 2018. Gross profit was flat at RMB3.1 billion, US$445.2 million compared with 2019. The gross margin was 17.2% in 2019 compared with 19.0% in 2018. The gross margin were lower primarily due to the change in product mix, as well as the higher production cost relate to the National VI engine in 2019.

Other operating income increased by 75.7% to RMB338.5 million, US$48.5 million compared with RMB192.7 million in 2018. The increase was mainly due to higher interest income and government grants.

R&D expenses increased by 9.9% to RMB492.2 million, US$70.6 million compared with RMB447.7 million in 2018. In 2019, the total R&D expenditures including capitalized costs, were RMB859.0 million, US$123.1 million and represented 4.8% as a percentage of revenue, compared with RMB643.5 million, representing 4.0% of revenue in 2018.

R&D expenses was mainly for research and development of a portfolio of new engines compliant with the next-generation National VI standard, and enhance quality and performance.

SG&A expenses rose by 16.2% to RMB1.8 billion, US$ 258.9 million from RMB1.6 billion in 2018. These expenses represented 10.0% of revenue compared with 9.6% in 2018. The increase in SG&A expenses was primarily due to higher warranty expenses and higher impairment losses on trade receivable.

Operating profit decreased by 10.6% to RMB1.1 billion, US$164.3 million from RMB1.3 billion in 2018. The operating margin was 6.4% in 2019 compared with 7.9% in 2018.

Finance costs increased by 16.5% to RMB131.8 million, US$18.9 million from RMB113.1 million in 2018 mainly due to higher amounts of bank borrowing and trade bills discounting in 2019 compared with 2018.

The net profit attributable to China Yuchai's shareholders decreased by 13.0% to RMB604.9 million, US$ 86.7 million, or basic and diluted earnings per share of RMB14.81, US$2.12, compared with RMB 695.3 million, or earnings per share of RMB17.02 in 2018.

Basic and diluted earnings per share in 2019 and 2018 were based on a weighted average of 40,858,290 million shares.

Some balance sheet highlights as of December 31, 2019. Cash and bank balances were RMB6.4 billion, US$916.1 million compared with RMB6.1 billion at the end of 2018.

Trade and bills receivables were RMB7.7 billion, US$ 1.1 billion compared with RMB4.7 billion [ph] at the end of 2018. Inventories were RMB2.8 billion, US$ 404.8 million compared with RMB2.5 billion at the end of 2018.

Trade and bills payables were RMB5.7 billion, US$ 822.1 million compared with RMB4.6 billion at the end of 2018. Short- and long-term borrowings were RMB2.1 billion, US$ 294.6 million compared with RMB2.0 billion at the end of 2018.

I would now turn the call over to Kelvin for more comments before we began the Q&A.

Kelvin Lai

Thank you, Thomas. Please note that due to COVID 19 some officers of China Yuchai are remotely calling into the conference call because of travel restrictions. This may result in a slight delay in providing answers to some questions. We apologize for any inconvenience and thank you for your patience. Operator, we are now ready for the Q&A.

Question-and-Answer Session

Operator

One moment please for the first question [Operator Instructions] Your first question comes from the line of William Gregozeski from Greenridge Global. Please ask your question.

William Gregozeski

Hi, guys. Great quarter. Can you talk about how you were able to get such high heavy duty sales in the quarter and the year relative to the market?

Weng Ming Hoh

Okay, hi. This is Ming here. In the first - I think that it has a lot to do with the gas engine that were implemented call in the later - from 1st July 2019. So a lot of the heavy duty engines that we sold in the fourth quarter are actually gas engine.

William Gregozeski

Okay. And is that - are you expecting to see similar growth on that going forward?

Weng Ming Hoh

Well, we will see [indiscernible] gas engines - recall in this coming year. Now that's partly because of the - call the government push to have a better environment. So we do expect to see, but again a lot of it depends on all the oil prices as well.

William Gregozeski

Okay. And it looked like you end the quarter with a pretty good inventory balance. Have you had any interruptions in shipping or part availability or anything like that related to the lock downs in different areas of China?

Weng Ming Hoh

Well, okay. No. – so break it down in two months now. The month of January before Chinese New Year there were no problems at all, after Chinese New Year when the coronavirus or COVID outbreak were at its peak, yes, we had problems getting components, but we have since improved now, not very – we see it improved. And things are gradually getting back to normal in China. A lot of our suppliers are also now starting to gear up and beef up their production.

William Gregozeski

Okay. And then what kind of impact have you - I mean, have you seen any other direct impact from this. I presume you know, first quarter sales are going to be quite a bit lower just because of the different shut down. I know you can't go too much into detail on that, but can you just kind of talk generally about the impact other than the part availability on the company?

Weng Ming Hoh

Okay. Yeah, sure. Now that the whole country was under lock down, especially the Hubei province, Wuhan, there is kind of a Chicago of China. So some of the critical components came from that region, plus all our components are from Hubei. So without certain product components we can produce. We can use up what inventories that we have in the warehouse, okay.

And also with the whole country under lockdown, all other parts of China too the components for other parts of China too were affected. So for the month of February I think - I think generally is not just for ourselves but for the general economy, and most of many other businesses. So from the supply chain has been badly affected.

William Gregozeski

Okay. And you think – yeah, and you think that is pretty much back to normal. You know now start going into the fourth quarter or sorry the second quarter?

Weng Ming Hoh

Yeah, I mean it's not 100% yet though. Yeah, I think from what we have seen, our own production has improved a lot compared to February. So we are gradually getting there, I think by second quarter we should come mostly there, if not this quarter.

William Gregozeski

Okay. And last question is what was the amount of the write-offs of receivables in the quarter and then for the full year?

Weng Ming Hoh

Yeah. Thomas, you wan to answer that?

Thomas Phung

Sorry. William, could you repeat your question again?

William Gregozeski

Yeah. What was the amount of the receivable write-offs in the quarter and for the full year?

Thomas Phung

Its – it was actually happened in the last quarter on impairment is approximately RMB25 million.

William Gregozeski

I assume that’s RMB?

Thomas Phung

Yes, RMB.

William Gregozeski

Thank you, guys…

Weng Ming Hoh

Yeah. I think – essentially, we made a provision for it because there's a delay in payment and having some issue with the customer. So we will take some actions to try to recover it.

William Gregozeski

Okay. Thank you.

Weng Ming Hoh

All right.

Operator

Your next question comes from the line of Don Espey of Shah Capital. Please ask your question.

Don Espey

Good morning, all. Don Espey with Shah Capital here. You provided color on National VI, but please provide an update on your electric powertrain and natural gas engines?

Weng Ming Hoh

Okay. Firstly, as natural gas engine, as I mentioned earlier, the natural gas - National VI emission standards was implemented from 1st July 2019 and since then we have so far [indiscernible] natural gas engine. So in total with – for the full year of 2019 we probably sold about 21,000 unit, most of them in the second half.

Don Espey

Is 20,000?

Weng Ming Hoh

22,000. Now as for the new energy powertrain, the one of that shows that – they seem to have a lot of interest - a lot of customers have a lot of interest in is the ratio standard. So we are working with our OEMs to try to – to get this built into their system, vehicles and there is a lot of interest in the marketplace for that particular powertrain.

Now the other - the others are not so well advanced, especially for the fuel cell. I mean the market is not quite there yet but we are progressing with it. We are also working with OEMs to start off with their prototype - to build prototype the OEMs to test products that we are going to have.

Don Espey

Okay. What was your operating cash flow in Q4 and calendar year 2019 and an approximate U.S. dollar CapEx for 2020?

Weng Ming Hoh

Thomas, you can take that, Thomas.

Thomas Phung

Okay. You are referring to the free cash - the operating cash flow, right?

Don Espey

Yes, that's right.

Thomas Phung

I mean, we - in the fourth quarter we do contribute to the positive cash flow of about RMB600 million and for the full year we have contribute about RMB1.5 billion.

Don Espey

And approximate U.S. dollar CapEx for 2020?

Thomas Phung

Kelvin, you wan to answer that?

Kelvin Lai

Now we can break it down into two components. One is the cost of the maintenance CapEx, we hit about RMB300 million, I think that with somewhere about here by US$40 million and therefore the continuous - continuing development - development of the National VI and [indiscernible] probably needed now 3 million to 5 million, again about 40 million, 40 million to 60 million. So all in all looking about 80 million, maybe 90 million.

Don Espey

And we saw engine sales were up in March in China, same trend at CYD?

Kelvin Lai

When you say up, compared to which period, compared to February is definitely up, compared for this year, you're talking about 2019, or 2020?

Don Espey

2020?

Kelvin Lai

Yeah, I can’t go to too much detail because March final numbers are not really finalized yet, but compared to last month, yeah, we expect to be up.

Don Espey

Okay. We were glad to see the dollar plus dividend. However with CYD board with over US$50 million sitting in Singapore. Why is the board still not buying back shares trading under IPO share price and with net cash level?

Kelvin Lai

Well I mean, I think we have gone through this many times, even if all you all, you this before in the past, I think the board has preferred to reward the shareholders through dividends as opposed to other methods. So I think that the board hasn't changed its approach yet up to date.

Don Espey

We don't understand why they're still electing to not do it even at these prices. I mean is the company planning on going private?

Kelvin Lai

We haven't discussed any of this issue. I don't know. I think the board – its up to the board, our shareholders. Cash is very important to us in this very difficult environment right now. So especially for now we see COVID 19, the whole environment is very uncertain right now. So the more cash you have with us, the better its going to be.

Don Espey

Okay. Thank you. That's all I have.

Kelvin Lai

All right.

Operator

[Operator Instructions]

Unidentified Analyst

We have a question here. How much will revenue - how much revenue do you expect to decline due to the virus. What is the impact on trade receivables? Are you able to elaborate for the other 300 million rise in the SG&A?

Weng Ming Hoh

Now the impact on the - from the virus, it's actually in the month of February actually, what we feel in March. So for domestically in China we hope that things will get better in the second, third quarter and fourth quarter. So hopefully I think the second quarter.

Now total revenue, very difficult right now to – due to the uncertainty to actually forecast the impact of the virus. Receivables, we do not expect to have too much of trade receivables. We always have been able to collect our receivables in the past and we don’t expect to be different this year. Thomas, would you want to respond on the SG&A?

Thomas Phung

I couldn’t read the questions, because it's so small.

Weng Ming Hoh

I’ll read out to you. Are you able to elaborate further on the 300 million rise in SG&A?

Thomas Phung

That main increase on that is due to the warranty expenses as we had went into the National VI series introductions or lunch. We do expect to do to service the engine that is on the pilot run, so that is the major impact on the on the G&A.

Weng Ming Hoh

Okay. Now we have another question here relating to MTU unit. Kelvin, maybe you want to add to that one.

Unidentified Analyst

What was the unit output revenue, gross margin of profit for MTU unit and what would be the target in 2020 for these numbers? Kelvin?

Kelvin Lai

Yeah. This is Kelvin. Regarding on the operating profit engine it depends on the selling price. And so I don't think that we can specify and what margin we had to gain from their engine to - on selling to the customer here. But I would say and then the engine margin is better than then what we are doing and on the traditional Ricoh [ph] engine sales and then in the Yuchai engine.

On the sales target for the year 2020, we are we are expecting an end to sell around 300 engine this year. Now it will be a question mark because of the revenue and then lose that first quarter on the sales due to the unusual marketing due to the coronavirus pandemic. So possibly and then we will be targeted but you try to sell as much as we can.

Unidentified Analyst

Final question would be, what will be the gross margin trend in 2020 before National VI sales?

Weng Ming Hoh

The National VI sales contribution is gross margin is not very big at the moment. Simply because we are still - we have been selling a lot yet and we expect to sell more in 2020 but it will still not be large enough to give us the volume or the economy of scale that we need. So we expect - however we do expect the gross margin to improve for National VI in 2020.

Unidentified Analyst

We have another question here is the question is what will be the percentage National VI sale in 2020?

Weng Ming Hoh

Well it's too early to tell right now especially with the COVID 19 outbreak. We had hoped to sell more than 13000 units which we did last year. We'll definitely be more than that but with the COVID 19 in the first quarter been affected by the COVID 19 it's going to be difficult for us to focus right now due to uncertainty. We do expect to sell more than anybody did last year. Operator?

Operator

Yes we have now reached the end of our Q&A session and I will turn the call back to Mr. Hoh. Please go ahead.

Weng Ming Hoh

Thank you all for participating in this conference call. We wish each of you good health. And please be safe during this crisis. We look forward to speaking with you again. Bye.

Operator

Ladies and gentlemen that does conclude our conference for today. Thank you for participating. You may now all disconnect.+