America Movil, S.A.B. de C.V. (NYSE:AMX) Q2 2023 Earnings Conference Call July 12, 2023 11:00 AM ET

Company Participants

Daniela Lecuona - Head of Investor Relations

Daniel Hajj - Chief Executive Officer

Carlos Garcia Moreno - Chief Financial Officer

Oscar Von Hauske - Chief Fixed Line Operations Officer

Conference Call Participants

Vitor Tomita - Goldman Sachs

Leonardo Olmos - UBS

Walter Piecyk - Lightshed Partners

Fred Mendes - Bank of America

Phani Kanumuri - HSBC

Carlos de Legarreta - ITAU

Chelsea Colon - Aegon

Operator

Good morning. My name is Nadia and I'll be your conference operator today. At this time, I would like to welcome everyone to the America Movil Second Quarter 2023 Conference Call and Webcast. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] Thank you.

Now I will turn the call over to Mr. Daniel Hajj, CEO of America Movil to begin. Thank you.

Daniel Hajj

Thank you, Nadia. Welcome, everyone. Thank you for being in the America Movil second quarter of 2023 financial and operating report. Carlos is going to make a summary of the results. Carlos, please.

Carlos Garcia Moreno

Thank you, Daniel. Good morning, everyone. During the second quarter, US dollar interest rates remained as volatile as they had been in the first quarter with inflationary pressures stronger than anticipated earlier in the year, the reduction of interest rates by the Fed originally expected to take place in the latter part of 2023 appeared increasingly improbable, giving rise to an upward trend in medium and long-term rates throughout the latter half of the quarter that has continued in July.

We added 2.2 million wireless subscribers in the second quarter, including 1.5 million postpaids. Brazil contributed 632,000, Austria 267,000 and Colombia 171,000. Prepaid net subscriber additions stood at 787,000 with Brazil and Mexico adding almost 200,000 each, and Colombia 185,000.

On the fixed-line segment, we obtained 331,000 broadband accesses, including 140,000 in Mexico, practically identical to the figures in the prior quarter which makes it the second consecutive quarter with strong broadband net additions, 78,000 in Argentina and 45,000 in Brazil. The growth of our mobile subscriber base stayed basically on trend with the postpaid base expanding 8.3% and the prepaid one 5.3%. On the fixed-line platform, broadband access growth picked up a bit to 3% while PayTV accesses remained roughly flat.

Second quarter revenue was down 4.6% year-on-year to MXN203 billion, in Mexican peso terms, with service revenues falling 4.2%. As in the prior quarter, this reflected the appreciation of the Mexican peso versus other operating currencies in the period. Correcting for foreign exchange effects, service revenue increased 5.0% at a slightly slower pace than that of the prior quarter.

EBITDA was down 3.8% in Mexican peso terms to MXN78.7 billion in the quarter, representing a 38.9% EBITDA margin. At constant exchange rates, it expanded 5.6% in the period, reflecting the greater operating leverage of the company. With EBITDA growing faster than revenue, the reduction in inflation rate we have seen in most countries as well as the appreciation of most Latam currencies and the euro vis-a-vis US dollar have recently contributed to this through their impact on costs.

Service revenue growth continued to advance on the fixed-line platform, moving up to 2.3% at constant exchange rates from 1.8% in the prior quarter. On the mobile platform, it slowed down to 6.7% from 9.3% in the prior quarter.

The improvement of fixed-line service revenue growth was observed in three of our four principal markets, Mexico, Brazil and Austria. In Mexico, it was driven by both corporate network services and fixed broadband services in Brazil and Austria, by the latter. Importantly, the downward trend of PayTV revenue appears to be coming to an end. In the quarter, they were down 1.3%, the lowest decline in several quarters.

The deceleration of mobile service revenue growth stems principally from the normalization of mobile revenue in Brazil exactly a year after the integration of revenue from former Oi mobile clients acquired by Claro. The uplift in terms of revenue growth provided by former Oi clients has come down to 0.8% from 6.4% a year ago. In addition to the above, we also had somewhat slower growth in Mexico and Colombia.

EBITDA yearly increases were in the neighbourhood of 9% in Brazil, Eastern Europe, Peru and Ecuador followed by Mexico at 5.1% and Austria at 4.3%. Our operating profit in the quarter MXN40.3 billion was down 2.9% year-on-year with our net profit nearly doubled from the earlier quarter to MXN26 billion, mostly on account of greater foreign exchange gains.

In the first six months of the year, capital expenditures totaled MXN64 billion and distribution to shareholders MXN3 billion, including share buybacks. In cash flow terms, we reduced our net debt by MXN4 billion in the period. All the above was funded by our operating cash flow and by proceeds from the sale of certain shares and payment received of the sale to sale of our interest in platform.

Our net debt excluding leases totaled MXN356 billion at the end of June, having come down by MXN25.8 billion from the end of December on the back of the appreciation of the Mexican peso vis-a-vis other currencies, particularly the dollar. It was equivalent to 1.43 times EBITDA.

So with this summary of our results, I would pass the floor back to Daniel Hajj for the Q&A session. Thank you all.

Daniel Hajj

Thank you, Carlos.

Question-and-Answer Session

Operator

Thank you. [Operator Instructions] Our first question goes to Vitor Tomita of Goldman Sachs. Vitor, please go ahead. Your line is open.

Vitor Tomita

Good morning, all, and thank you very much for your question -- for allowing us to have some questions. The first question from our side would be on share buybacks. If you could give us an update on how you are thinking about buybacks for the second half of the year, especially considering that we noticed the slower pace of buybacks year-to-date. And on how further buybacks will be funded given that you mentioned that dividends from Verizon and KPN were a source of funding for shareholder remunerations thus far? Also second question from us on M&A. Now that you have achieved a more comfortable leverage position and are generating cash consistently, could you provide us an update on your M&A strategy and on which regions could potentially be considered for further acquisitions? Thank you very much.

Carlos Garcia Moreno

Okay. Well, on the share buybacks, as we've mentioned in prior calls, we tend to have them all kind of with our cash flow throughout the year. The cash flow the first half of the year is seasonally weak because we need a lot of working capital and then we usually get it back in the second half of the year. So that's where we have a bit more liquidity that we can engage in more shareholder distributions.

In the case of -- so beyond the issue of the seasonality, that's been there always, I think that this year we have mentioned in the prior calls, we needed to accommodate the increase in CapEx that we had mentioned to you. We had increased the CapEx from MXN8 billion in the original budget to MXN8.5 billion more or less and that's basically what we wanted to cover before we could actually engage in pulling share buybacks. I think that now we will be going back to normal. I think, that we should expect to resume distributions very much along with the recovery of our cash flow.

In terms of our M&A, I think, that we are not currently looking at anything anywhere. I think that we have a lot of growth, organic growth to develop and we have been saying in some of the numbers, some of the fixed-line operations are developing very nicely and we are continuing to have a good growth on mobile. So it's not that we need to buy growth anywhere, I think that there is a plenty to develop organically.

Overly, out of regulatory concerns, there's a few entities that one could acquire, certainly in Latin America that's the case. And in Eastern Europe, I think that it's also because there's not that many more assets to buy. So I don't think that we are looking really today at anything outside our footprint and within our footprint respectively no entities that we could buy.

Daniel Hajj

And just to add on what Carlos said is, I think the additional CapEx that we're putting we're seeing good opportunities in Latin America growth opportunities and that's what we're looking for. So I think this year we can put more fiber or other investments in some countries that I think we're going to get good growth. And on M&A, as Carlos is saying, but we are open to see other opportunities, but right now we're not looking to anything.

Vitor Tomita

Very, very clear. Thank you very much.

Daniel Hajj

Thank you.

Carlos Garcia Moreno

Thank you.

Operator

Thank you. The next question goes to Lucas Chaves of UBS. Lucas, please go ahead. Your line is open.

Leonardo Olmos

Hi. Good morning, everyone. This is Leonardo actually. Thank you for taking the question. A couple of questions in Brazil. The first one, if you could comment on the reduction on the B2B revenue, on the corporate revenue, which sounded like a one-off. But if you could talk a little bit about that. We're seeing very strong growth in other regions in Brazil in the past quarters. And my second one, we saw yesterday the deal of Vero and AmericaNet forming one of the largest ISPs in Brazil in fixed broadband. We also see news of Felix talking with Vitol from BTG. So overall, I just want to double-click on Vitor's question on M&A. And if you could talk about either M&A or partnership, what type of opportunities are you looking at specifically in the fixed market in Brazil? Thank you.

Daniel Hajj

Well, I'm going to talk a little bit about Brazil. I think in Brazil, we are doing good. We finalized all the synergies that we have with Oi. I think we have all the subscribers in our platform, I think, where you have the savings that we think that we're going to have. So we do and execute very good on the purchase of Oi.

We're growing very good. We have a very good distribution network all around Brazil. We're starting to grow again in fixed, in broadband. So it's very good news. We have two or three quarters growing again in broadband. So things are looking for us is good that the market consolidate. There is a lot of players in Brazil. So it's good we are not seeing any consolidation right now. But we're open also to see what opportunities we can have.

I think the news today is or the I don't know if it's a news or not, but what they said is that Vero and AmericaNet are merging is what I hear this morning. So it's good that everybody that the companies -- these companies need to consolidate and I think it's good for the market, it's good for us. So we are in a very good position. We have been doing good investments. We have been operating well. So we're in a very good position in Brazil.

In the corporate market, I think, what is happening, I need to go more deeply on the corporate side. But I think we cancelled some contracts, cloud contracts that we don't have any margins there. So we cancelled some of them. But we're doing good and we're growing in the corporate market. And what we want is to have a client what -- to have profitable clients in this segment. So that's what we are looking for.

So what, I don't know, Oscar, if you want to say something else on Brazil.

Oscar Von Hauske

No, as you say, in corporate, as you mentioned, we cancelled some cloud contracts. When you look at the rest of the digital solutions, we are growing double-digit in all of them, in network management, in IoT. So we feel that the path overall will continue. And as you mentioned in fixed broadband, we are still growing the last three quarters. We were in negative before. So we operate the network and we are changing all the customer satisfaction, installation in time to prepare. So I think we have very product in the marketplace.

Daniel Hajj

And I think where we have network, our network is upgraded. We have a very good speed. And we are doing good. We're gaining market share where we have network. Then there's other places where we need to invest and that other companies are investing. But where we are, I think, we have a very good top of mind, very good network, very good customer service and we're doing very good.

Oscar Von Hauske

Yeah. And we could offer 1 gigabit in all the network, right?

Daniel Hajj

And also we can. Yes. I don't know if --

Leonardo Olmos

Great. Cannot disagree on that. Very good performance. Thank you very much.

Daniel Hajj

Thank you.

Operator

Thank you. The next question goes to Walter Piecyk of Lightshed Partners. Walter, please go ahead. Your line is open.

Walter Piecyk

Thanks. I got knocked off the call briefly, so I apologize if this question was asked. But Daniel, in Mexico, when I look at the service revenue, obviously growth, but a little bit slower than what you've been doing in prior quarters. Certainly, the sub growth is -- it looks fine. So maybe a little bit less recharge in the June quarter. Is that -- I mean can you just comment on that a little bit? Is there any -- is that a reflection of economy? I know inflation I think has been coming down in Mexico. I think they're maybe at 5% now and the trend has been down. So just kind of, if you could comment on the use or the -- I guess the ARPU and specifically the service revenue growth in Mexico and is it -- should we expect some moderation here.

Daniel Hajj

On Mexico, we're gaining traction again in postpaid. So in postpaid, we're doing better than what we used to be last year. So we're again gaining traction. And it's exactly what you were saying, in prepaid, we have more customers, more active customers so we can see the customers that recharge, let's say, June last year and June this year and we have lot more customers recharging these.

So what we're seeing, yes, the growth has been slowing down a little bit and it's I think that people is recharging a little bit less. It's maybe it's something on the economy, a little bit on the economy. Inflation is going down. I think Mexico is having a lot of new investments. So I think that will go again high. So my expectation is that on prepaid, again people start to recharge a little bit more in the future.

Walter Piecyk

Okay. And then on equipment sales, I noticed that in past years, in the second quarter that equipment revenue in Mexico tends to go up. I'm not sure why that is. Are people buying more expensive phones or is that a cycle when --

Daniel Hajj

It's Mother's Day. Mother's Day is something very important and it's on May. So that's why always in second quarter there is increase in equipment revenue, yes.

Walter Piecyk

So for this year, I guess, what I noticed that because in past years it's been up and this year I guess it was a little bit more flat. I guess people weren't buying their mothers some replacement phones that is fresh this year.

Daniel Hajj

Yeah. I think people is starting to wait a little bit more to replace the phone. I think it's more or less the same thing as you see in prepaid, people wait a little bit to recharge again the phone. And here they wait a little bit to buy a new phone. What we're doing and being successful is we have a new platform called Amigo Paguitos that we're financing to some customers a prepaid phone and it's been successful, it's growing.

We are being a little bit cautious with that. But as we finance in the postpaid segment, we are starting to finance also in the prepaid segment. Good, I think it's good for the people, it's good for us and it's been taking traction. We have been putting this platform in America in Telcel. I think we're going to do that all around America Movil if it works and we're happy the way it's been developing.

Walter Piecyk

Okay. And then just one last one for Carlos, if you don't mind, Carlos. With, I guess, inflation kind of moderating maybe the outlook seems a little bit better. Just curious if there's any -- it's a question I always ask you, I guess, target leverage ratios, any change in how you're thinking about leverage ratio as it relates to capital return?

Oscar Von Hauske

Well, we are looking at our leverage ratio. We want to keep it at not less than 1.2 and not more than 1.5. I think that would be the open range that we will be looking at. And that overly is an answer to your question in terms of the return on capital, Walter. I think it's -- so there is -- we will not allow it to go below 1.2. That's the idea and that's consistent with what we outlined in our Investor Day year and a half ago.

Walter Piecyk

Yeah. Thank you very much.

Daniel Hajj

Okay. Thank you.

Operator

Thank you. The next question goes to Fred Mendes of Bank of America. Fred, please go ahead. Your line is open.

Fred Mendes

Hello. Good morning, everyone. I have two questions as well. The first one is with Telmex. Once again, very strong net adds for Telmex. So just wondering if that's coming mainly from gross adds. Are you basically reducing your churn, right? Basically, what we're trying to understand is if you're gaining clients from the competition or let's say you stopped bleeding in terms now that you have more fiber in your network. That would be the first question. And then the second question is more like a reconciliation. When I look at your results in Brazil for the mobile business, the ARPU increased by 6.5%, net adds on postpaid by 1%, prepaid you had some net losses, but the mobile service revenue was like 12% organically. So just wondering if I missed something here or maybe a mix here. Just trying to reconciliate here. Thank you very much.

Oscar Von Hauske

Well let me tell you as we mentioned before, we've been doing very aggressive investment in fiber. Now 73% of the customer base is already connected with fiber. As well as we mentioned we've been working on the commercial activity. We improved the installation processes as well. And we have a better retention of the customers. So we released the churn a little bit. So all of them impacting this net gain that we have been having.

And we launched a new proposition in the market that we believe that is very unique in the market and very adequate to the market. Recently, two weeks ago, we launched 300 megabit symmetrical including Claro Video and Paramount with a very good price. We believe that it's going to be taken in the market very helpfully. So that's it.

Daniel Hajj

I think we're very happy the way Telmex is developing. And what Oscar is saying exactly, it's not only churn or not only -- it's everything. It's less churn because we have a lot more fiber and people -- where consumers are --

Oscar Von Hauske

Better installation speeds.

Daniel Hajj

Better installation speeds, less churn and good promotions.

Oscar Von Hauske

And new products, right.

Daniel Hajj

Yes. So we're --

Carlos Garcia Moreno

And on the slowdown of the mobile revenue growth in Brazil, it basically has to do with the normalization of revenue growth a year after we had factored in the first revenue from Oi mobile clients. And that means that the uplift that we were getting from the Oi clients has come down from over 6% a year ago to a bit less than 1% today. I think that's basically what explains the slowdown, okay. So it would be a change in the base that's just for the reference for the comparisons.

The other thing in terms of the ARPU growth in Brazil in spite of this is partly to do with disconnections of Oi mobile clients that took effect towards the end of the prior quarter and that's basically what is helping the ARPU numbers in Brazil.

Fred Mendes

Perfect. Thank you. Thanks, Daniel, Carlos, Oscar. If I just may, just a follow-up here. It's 73% of the clients or 73% of the homes passed already the fiber in Mexico for Telmex?

Oscar Von Hauske

73% of the clients.

Fred Mendes

Perfect. Perfect. Thank you very much, Oscar.

Operator

Thank you. The next question goes to Phani Kanumuri of HSBC. Phani, please go ahead. Your line is open.

Phani Kanumuri

Thanks, everyone for taking my question. So my question is related to monetization of assets. Are there any assets that you are trying to monetize whether it's Verizon stake that you have or the new tower company that is being formed in Austria? Are there any plans to monetize them in the next couple of years? That's my first question. I'll follow-up -- I have a follow-up question later.

Daniel Hajj

Can you repeat a little bit slowly? We don't understand the question, please.

Phani Kanumuri

I'm trying to understand if you have any monetization plans for the Verizon stake or the new tower company that is being formed in Austria. So you have some stake in that tower company, are you planning to monetize that in the next couple of years?

Oscar Von Hauske

Okay. The tower company in Austria as you point out is still in the process of being spun off. We expect this will happen sometime in the third quarter before the end of the third quarter. And in fact this tower company has already raised the financing that it needs to be fully funded from day one. In this particular case, as opposed to Sitios, and as opposed to TeleSites before them.

We, America Movil, will continue to control and consolidate the company. And we have, in fact, a commitment to maintain our stake at least for a period of five years in the tower company, okay? So at least for this period of time, the Austrian tower company is going to be called the EuroTeleSites will be controlled and consolidated by America Movil. So we will be seeing as --

Phani Kanumuri

And regarding Verizon stake? Sorry, please continue.

Oscar Von Hauske

Regarding the?

Phani Kanumuri

Verizon stake? Any change this time? Verizon stake that you have?

Daniel Hajj

Verizon stake.

Oscar Von Hauske

Yes, what I would say is that the stake we have in the company, 51%, we have our commitment not to sell for a period of at least five years.

Phani Kanumuri

Okay. Sure. So the second question I have is regarding the enterprise segment revenues in Mexico. They have been growing significantly in the last few years. Do you think that they can maintain the double-digit growth rates going forward, the corporate segment revenues?

Daniel Hajj

I think we're doing very good on the corporate segment in Mexico. Oscar can talk a little bit about our propositions and what we're doing there. But we have a very good distribution, people, propositions, and -- but, Oscar, please.

Oscar Von Hauske

Yeah, as we start to work three or four years ago about in -- focus in the enterprise market. And we've been very successful on next generation network which is called SD-WAN. So we will move into that. And we are adding to the connectivity value-added. One is security, second is cloud and third is vertical solutions for different vertical business as finance, retail.

So we need some alliance with the experts on the field and we jointly want to market to offer the whole package to enterprise. It has been working pretty nicely. So we developed our core business that is connectivity, but with aggregate value to the connectivity to security, cloud and vertical solutions.

It has been working very well not only in Mexico, if you look at Colombia, if you look at other countries we are doing the same in Brazil as well. So we believe that we need to convert not just connectivity, so bring value to the connectivity with these new propositions.

Phani Kanumuri

Yeah. Thank you, everyone.

Daniel Hajj

Thank you.

Operator

Thank you. [Operator Instructions]

Oscar Von Hauske

Phani, I would just like to clarify something because it just has come to our attention. In the case of the Austrian tower company, as I mentioned before, we have a commitment not to sell the stake in five years. I understand that the question may have been about the stake that we have in Verizon. And in that particular case, there is no limitations. So we don't really have any kind of limitations in terms of when we can sell. We do not have at present any plans to sell the stake.

Operator

Great. Thank you. The next question goes to Carlos de Legarreta of ITAU. Carlos, please go ahead. Your line is open.

Carlos de Legarreta

Hi. Thank you. Good morning. I have two quick questions here. The first one on CapEx. I know you mentioned that you are still planning to the slightly larger allocation this year, but looking at the data year-to-date your CapEx was actually down 2%. Just wondering if that's just the base or seasonality this year. And secondly going back to the tower company in Europe. So you [Technical Difficulty]

Daniel Hajj

Hello?

Carlos de Legarreta

Going to be the entire. Hi. Can you hear me?

Daniel Hajj

Yeah, on the tower, the tower, can you please repeat the tower question?

Carlos de Legarreta

Sure, sure. Just you've raised MXN1 billion in debt. I just want to know if that's going to be the entire amount of this company. And I read in the European press that it has around 200 million in EBITDA -- EUR200 million or so. Are these numbers more or less correct? Thank you.

Carlos Garcia Moreno

Okay. On the debt of the tower company. Yeah, the amount that has been raised was MXN1billion and this amount will basically be new debt at the tower company and less debt in the Telekom Austria. Telekom Austria will have a leverage of approximately 0.5 times net debt to EBITDA, so it will be free to go a bit faster. The numbers you mentioned on EBITDA, I think they are probably more or less right, around EUR200 million so that we can confirm to you and we can send you some information, okay?

Daniel Hajj

And on the CapEx, it's only seasonality. We do the CapEx and we are, I think, on target on plan on this all the CapEx that we're going to put. Always remember that we always have like 5% more or less depending in country, places and --

Carlos Garcia Moreno

And Carlos, one thing that is important to take into account is that the currencies have appreciated vis-a-vis the dollar in many of the places and CapEx as a lower dollar component.

Daniel Hajj

That changed a little bit.

Carlos de Legarreta

No, that's a good point. Thank you, Carlos. And thank you both Carlos and Daniel. Just broadly -- more broadly, I guess. I guess the strong appreciation of the Mexican peso against basically all currencies. I just wanted to understand how are you managing that. Is that a net positive for AMX or not necessarily?

Carlos Garcia Moreno

It's a net positive to the extent that we are seeing a lot of FX gains, obviously, on the one hand, we had a lot of debt that was non-pesos and this debt is -- this exposure is now less. I was looking, for instance, at interest cost -- net interest cost.

America Movil have come down in peso terms year-on-year and that is partly reflective of this appreciation of the pesos. So that is a net positive, no doubt, on the financial part. I would say on the operations part, there is a number of OpEx that are linked to dollars, most of maintenance expenses for networks are dollar based.

Most of the IT-related expenses or dollar based. So in all of those accounts, we are getting some relief from the appreciation of the -- certainly of the peso but not only the peso. We are seeing the dollar declining vis-a-vis almost all of the currencies in Latin America this year.

Carlos de Legarreta

Right. No, thank you for that, Carlos. That's very useful.

Carlos Garcia Moreno

Okay. Thank you, Carlos.

Operator

Thank you. The next question goes to Chelsea Colon of Aegon. Chelsea, please go ahead. Your line is open.

Chelsea Colon

Hi and thank you for taking the questions. I see that -- I was wondering if you could comment on your strategy in Central America. I see that you had good top line growth, but your EBITDA margin has come down a bit. Can you just comment on the underlying factors may be the main countries driving that and what your strategy is there from a competitive standpoint?

Daniel Hajj

Well, I think, Central America is important place area for America Movil. And in Latin America, it's a lot. We have companies, places, cities or countries like Guatemala or Salvador that -- and even Nicaragua that we have the company for a long time. We have fixed for a long time. In other ones like Honduras, Costa Rica, we don't have -- we have the -- we start there.

We have the mobile is starting and we are doing the fixed. And in Latin America, we are -- in Central America, we're changing and putting a little bit more fiber as we said, is one of the places where we're going to invest more.

And it's important I think we're looking to grow to change more to fiber all our customers and to -- I think it's doing more 4G, more coverage. The penetration in broadband is not high. So we have more opportunities on doing more on broadband penetration. So it's an area where we are looking to develop more and see good opportunities.

Chelsea Colon

From -- are you also -- is there a region where you find the need to offer discounts to gain market share? Like is that a goal to gain market share in this region or are you pretty comfortable with where you are?

Daniel Hajj

Well, we're looking to operate good propositions, to increase our coverage. So I don't know if it's gaining market share from the other ones or gaining market share by developing the country. So what we're looking is to cover more to increase the broadband penetration, to move more customers from 3G for 4G to have more and more that they can use more data that they can use more the phone. So it's -- we're going to do more on the corporate side, the datacenters more and cloud and all these services. It's an area that we want to develop more of those, not necessarily taking from the other ones, it's more developing these countries.

Chelsea Colon

Understood. Thank you.

Daniel Hajj

Thank you very much.

Operator

Thank you. We have no further questions. I'll now hand back to Mr. Daniel Hajj for any closing comments.

Daniel Hajj

I just want to thank you everyone for being in the call and thank also Carlos, Oscar and Daniela being here. Thank you very much.

Operator

Thank you. This now concludes today's call. Thank you all for joining. You may now disconnect your lines.