Good day, everyone and welcome to the Estée Lauder Company’s Fiscal 2022 Fourth Quarter and Full Year Conference Call. Today’s call is being recorded and webcast. For opening remarks and introductions, I would like to turn the call over to the Senior Vice President of Investor Relations, Ms. Rainey Mancini.

Hello. On today’s call are Fabrizio Freda, President and Chief Executive Officer; and Tracey Travis, Executive Vice President and Chief Financial Officer. Since many of our remarks today contain forward-looking statements, let me refer you to our press release and our reports filed with the SEC, where you will find factors that could cause actual results to results to differ materially from these forward-looking statements. To facilitate the discussion of our underlying business, the commentary on our financial results and expectations is before restructuring and other charges and adjustments disclosed in our press release. Unless otherwise stated, all net sales growth numbers are in constant currency and all organic net sales growth excludes the non-comparable impacts of acquisitions, divestitures, brand closures and the impact of currency translation. You can find reconciliations between GAAP and non-GAAP measures in our press release and on the Investors section of our website. As a reminder, references to online sales include sales we make directly to our consumers through our brand.com sites and third-party platforms. It also includes estimated sales of our products through our retailers’ websites. During the Q&A session, we ask that you please limit yourself to one question, so we can respond to all of you within the time scheduled for this call. And now, I will turn the call over to Fabrizio.

Thank you, Rainey and hello to everyone. I am grateful to be with you today to reflect on our record results for fiscal year 2022 and discuss the drivers of our outlook for fiscal year 2023. We leveraged our strengths amid the prolonged pandemic, the invasion of Ukraine and the onset of higher inflation. Our multiple NGO growth strategy, flexible financial model and exceptional talent enabled us to deliver record performance. At the same time, we invested for long-term growth, reflecting our confidence in the vibrancy of prestige beauty now and in the future. We achieved better-than-expected results in our fourth quarter, leading to above guidance organic sales growth of 8% for fiscal year 2022. Reported sales rose 9% despite heightened foreign exchange pressure to end the year. Adjusted operating margin expanded 80 basis points to an all-time high of 19.7%. We realized this greater profitability even as our growth engines diversified beyond our highest margins categories. Fragrance, makeup and hair care delivered double-digit sales growth on a reported basis to complement our robust skin care business. Impressively, 9 brands contributed double-digit organic sales growth for the year despite the significant pressure from COVID-19 in Asia-Pacific in the fourth quarter. La Mer, Jo Malone London and Le Labo showcased the strength of our portfolio across our large, scaling and developing brands respectively. M·A·C, Estée Lauder and Clinique powered makeup emerging renaissance, with double-digit gains in the category as Jon Malone London and Tom Ford Beauty elevated fragrance to new heights with striking growth. Our geographic diversity has been a distinct benefit during the pandemic allowing us to create and capture growth where opportunities presented themselves around the world. Asia-Pacific led growth in fiscal ‘20 and ‘21 as markets in the West were more negatively impacted by COVID-19, while the Americas…

Thank you, Fabrizio and hello everyone. I will briefly cover the fiscal 2022 fourth quarter and full year results, followed by our thoughts on the outlook for fiscal 2023. Our fourth quarter organic net sales fell 8%, a bit better than we expected, reflecting the disruptions in China related to COVID restrictions, including travel retail in Hainan as well as the suspension of our commercial business in Russia and Ukraine. These matters more than offset continued growth from the recovery in the Americas and the rest of the EMEA region. Reported sales growth included approximately 1 percentage point from the addition of sales from DECIEM, while currency translation negatively impacted growth by approximately 3 percentage points. From a regional perspective, net sales in the Americas rose 9% organically led by double-digit increases in makeup and fragrance. Consumers continued their return to brick-and-mortar, leading to strong growth in freestanding retail and specialty multi-stores. We grew sales in nearly every market in the region, with particular strength in Canada and across Latin America. Net sales in our Europe, the Middle East and Africa region decreased 9% organically driven almost entirely by the disruptions in travel retail in China and the suspension of business in Russia and Ukraine. Of the remaining markets in the region, 10 rose double-digit as tourists returned to the region and consumer traffic and brick-and-mortar retail thrived. The makeup, fragrance and hair care categories rose strong double-digits in EMEA, while the decline in skin care reflected the soft travel retail sales in Asia. Global travel retail, which is primarily reported in this region, declined in Asia due to the COVID restrictions in China. Hainan, in particular, was impacted as stores were closed a portion of the quarter, travel was curtailed to the island and courier services for online deliveries…

[Operator Instructions] Our first question today comes from Dara Mohsenian of Morgan Stanley. Please go ahead.

Hi, good morning.

Good morning, Dara.

Good morning, Dara.

So I have a two-part question on China. First, just on the detail side. Can you just give us a bit more of a sense on what you’ve factored in to both Q1 and the full year guidance on COVID lockdowns? Are you assuming the city restrictions that are in place today continue throughout Q1? And then what do you assume post Q1 in the balance of the year in terms of lingering shutdowns? And then second, it’s very hard for us to judge externally your underlying market share performance in China ex supply issues. I’m sure it’s difficult for you also. But just any perspective on underlying market share trends as supply returns to normal, perhaps so far in fiscal Q1, that’d be helpful. And if you expect any of the supply issues recently to have an impact on your forward share at all. Thanks.

So I’ll start, Dara, regarding China and what we’ve baked into our assumptions. Clearly, the first quarter, we are seeing some intermittent disruptions. Our distribution center is open. We’re actually – and opened in June, as we mentioned. So we were well prepared for the 6/18 holiday festival, as I mentioned in our prepared remarks. We are still seeing some intermittent shutdowns, not whole city shutdowns in China at the moment. So that is still disrupting brick-and-mortar retail. So we have factored that in, certainly to our Q1 expectations for the China market. As it relates to Hainan, as we mentioned also in our prepared remarks, and I’m sure you all have seen, Hainan is experiencing a lockdown right now. So, all of the doors are closed. Courier services as well have been suspended for online orders. And we’re obviously monitoring that day by day, but that is something that began in the month – at the beginning of the month of August. And right now, we’re expecting that to continue through the end of the month of August with some resumption in September, but not full resumption in September, recognizing that as this situation continues to impact the market, there will be some level of reticence for consumers to travel. But we certainly expect that, that will improve in the upcoming months. So I think first quarter and first half, we are expecting some level of muted performance in the region related to these issues. We do expect second quarter to be better than first quarter. And then in the second half, obviously, we’re anniversarying quite a bit of disruption in the fourth quarter, some of which, again, in the third quarter for both Hainan as well as China. And we do expect that we will see strong growth in the second half. For the full year, we do expect China to grow double digit. And so again, we are – it is a market that we know there is very strong demand for prestige beauty and for our products and the same with Hainan as well. So we are just navigating through these first few months of the year until we get on the other side in the second half.

And I’ll comment on market share. As Tracey just said, we do expect for the full year, China to go back growing double digit. We expect strong recovery in Hainan in the second part, in the second semester of the fiscal year, for sure, a gradual recovery before. That’s our assumption, which obviously is going to give us also results in market share. So speaking about the last – the quarter four, to be clear, the market in China was down 10%. Estée Lauder Company was down 13%. So we lost 1 point of market share. We are now at 23%, so very strong market share. I would like to argue that given the lockdown of our distribution center, the impossibility of serving for almost 2 months, our consumers losing 1 point of market share temporarily is actually showing that already in June, we started recovery with an outstanding 6/18 event and the management of this. And then to speak about what we are going to do further in the next 6 months to recover the market share we lost because of the distribution down, first of all, strong brand portfolio brands. We are going to reinforce it with the launch of Aveda that just started, which is a very important launch entering the hair care, big and growing category, the luxury hair care, big and growing category in China. We are going to double down on Tmall and entering new successful online distribution that we started with JD, where we still have opportunity of deploying more brands in other areas where we are testing or distributing. We have very strong innovation starting with what we discussed in the remarks, which is the Estée Lauder Advanced Repair eye product, which eye is one of the most important categories in China,…

The next question is from Lauren Lieberman of Barclays. Please go ahead.

Great, thanks. Good morning, everyone. I was struck to mention that pricing this year expecting to be north of 5%. And if I then layer in what you suggested could be a contribution from distribution, it suggests very limited, let’s call it, like-for-like door volume growth. So just I was curious if you could comment on that because thinking about – you mentioned, Fabrizio, recruitment, you’re talking about launching Aveda. It just feels like there is a lot happening that should still be driving unit growth. And so I was curious if you could comment on that. Thank you.

Yes, Lauren. So I’ll start. Good morning. We did call out, obviously, in our prepared remarks and in the press release a couple of adjustments in our revenue numbers this year. So we did exit our prestige designer licensed businesses. Basically, we ended those licenses. Our focus is on luxury fragrance and artisanal fragrance. And so we did let those licenses expire. That is about 1 point of growth. The other point is related to the suspension of our operations in Russia and Ukraine. And so that is also contributing another point, if you will, to adjusted growth and to the suppression of growth that you’re referring to. And then lastly, the currency impact on revenue also impacts us in terms of our growth algorithm. So if you adjust for all of those items, it’s about 6 points of difference between what we’ve guided for the full year and where we expect – where we would expect to end if none of those events had happened. So that is the reason why the growth looks a bit muted even with the 5.5% pricing. The other thing I would say again is we are starting the year with a fair amount of disruption as we just spoke about in some of our very important markets. And we are assuming a more gradual recovery, and that, too, impacts our unit growth.

The next question is from Nik Modi of RBC Capital Markets. Please go ahead.

Yes, thank you. Good morning, everyone. I just wanted to revisit China and just given some of the economic data that we’ve been seeing recently and curious if you’ve witnessed any evidence of any economic pressure impacting consumption. And I know it’s hard with all the noise of COVID and the shutdowns, but perhaps maybe some of the markets where you haven’t seen a big COVID impact, maybe you can share what trends would look like. Any perspective would be helpful?

Yes. Hi, Nik. No, actually, we don’t feel this. It’s probably the prestige cosmetic luxury cosmetic segment is more protected because of the big passion of consumers for this category. And as you know, the clear preference for the preference for the Chinese consumer for the prestige solutions, which is growing very fast for years now. And the percentage of prestige for the total market keeps improving. So, we don’t see this. The proof I can give you is that the top of the ranges are growing the fastest also on our brand. La Mer is one of our fastest-growing brands as an example. So, the – and importantly, the market is very active when there are no restrictions, when there is no issues. So, we don’t see any impact – obviously, we are prudent in the assumptions we are making on the China economy development in the short-term as everyone is. But we don’t see a very big impact on our business in absence of COVID restrictions situations.

The next question is from Rupesh Parikh of Oppenheimer. Please go ahead.

Good morning. Thanks for taking my question. So, Tracey, I was wondering if you guys can provide more color on the interplay between gross margins and SG&A for the year.

Yes. Obviously, we experienced some gross margin pressure in Q4. It was related to some of the activity that we had to manage through in terms of getting product to market and some of the disruption that’s in general in the supply chain. So – and as we think about the first quarter and the guidance that we have provided, we do expect gross margins to be down as well in the first quarter, not to the same extent as they were in the fourth quarter, and that will gradually improve throughout the year as we are anniversarying some of those disruptions. So, for the full year, we are expecting gross margins to be around flat at the moment. But the first – it’s a tale of two halves in terms of the first half and some of the things we are anniversarying and some of the pressures that we are seeing on the business. But we do expect for the full year gross margin to be flat. In terms of SG&A, again, we expect that we will continue to get good SG&A leverage. I think we are incredibly proud of what our team was able to deliver this past fiscal year and fiscal 2022 in terms of the expense leverage that we were able to deliver. And it’s something that we are keenly focused on while also focused on investing in the important areas that drive our long-term growth algorithm. So, those are things that we continue to manage throughout the year, and we will get continued expense leverage this year.

The next question is from Mark Astrachan of Stifel. Please go ahead.

Yes. Thanks and good morning everybody. Wanted to follow-up sort of directionally on the last question on gross margin, if you take a look at it even pre-COVID, pre-supply chain and inflationary pressures adjust for some of the accounting changes kind of going back 3 years, 4 years ago, it’s still kind of down over the last 5 years, and your expectations were flat this year. I guess kind of the puts and takes, which you are taking out of price. You have got a post-COVID business acceleration plan, so there is productivity, there is a mix shift in the business towards direct-to-consumer. I guess maybe if you could talk directionally about kind of what has led the progression down, but more importantly, kind of where do you think it can go over time. Is that high-70s level achievable again? Why or why not, that would be helpful. Thank you.

Yes. I think we have seen over the timeframe that you are speaking about. And yes, we definitely had accounting changes that impacted the gross margin between expenses and gross margin. But we have seen differences in the business in terms of our mix of business. And so fundamentally – and I know it’s important to understand what’s going on in gross margin, but really, what we focus on is operating margin. And as we have seen channel shifts and market shifts, etcetera, those have impacted the gross margin, perhaps in some cases – in some of those cases, more negatively, but they have impacted the operating margin quite positively. So, at the end of the day, we are focused on delivering operating margin and profitable growth. In terms of whether or not we expect that we will get back to higher levels of gross margin, it is something that we are working on with our supply chain. So, between our direct procurement programs, between some of the things we are doing in transportation, the opening of our Japanese plant, which should allow us to be not only closer to the consumer, but even to some of our suppliers for inbound freight should also help us from a gross margin standpoint. I am not going to commit that we are going to get back to the gross margins that we were at 5 years or 6 years ago, but do know that there are things that we see that are opportunities that we are also working on and very close partnership with our supply chain.

The next question is from Steve Powers of Deutsche Bank. Please go ahead.

Thank you and good morning. I wanted to focus on makeup, if I could. Obviously, the trajectory there is promising. You have been talking about the makeup renaissance for a while, and it directionally is – seems to be taking shape. But we are still below ‘19 levels by a fair degree. So, I guess really, the question is, sort of what’s your expectation for that recovery to continue the progress you expect to make over the next 12 months? And to some extent, when do you expect to be able to kind of converge with those pre-pandemic levels? And as we talk about that, I am mostly focused on the top line, but obviously, profitability comes alongside that. And your thoughts on rebuilding profitability in makeup alongside the top line would be helpful as well? Thank you.

Okay. So, let me – I will start. In terms of makeup, we continue to be quite bullish on the makeup category. We did see a recovery, particularly in our Western markets. So, part of the strength that we saw this year – this past fiscal year in terms of the growth in makeup and the improvement in margin that we saw in makeup was related to the recovery, in particular, in brick-and-mortar in our Western markets, so in the Americas as well as in Europe. We are still challenged a bit in makeup in our Eastern markets because of some of the disruption that’s going on, in particular, in brick-and-mortar. And – but we expect makeup to gradually improve as the disruption in those markets improve, and similar to Western markets, as consumers resume their normal social and professional occasions. So, that is our expectation in terms of when we will get back to fiscal ‘19 levels for makeup, depending on the disruptions this year. It may take another year or so. But our makeup brands have fantastic innovation for this year, in particular, the MAC brand, but others as well. And so we are very encouraged in terms of makeup. As it relates to the margin, the makeup category has been particularly hit by the pandemic that is now going on for 3 years because of the brick-and-mortar distribution of makeup, and in particular, with a few of our makeup brands where services in-store are very well loved by our consumers and the in-store experience, that took – that was a bit of a challenge with doors closed and with traffic down. And traffic is still down in brick-and-mortar, even in the markets that are in recovery, traffic has not recovered to prior levels, but it’s well on its way to do so. So, I think one of the reasons why we took some of the actions we did with the post-COVID business acceleration program is take a point of view to your point of what that will look like when things are stabilized and what the mix between brick-and-mortar and online should be and took proactive measures to close some underproductive doors, and largely, that will help the makeup category. Most – many of those stores were makeup doors. Some of them were Origins stores. Some of them were Bobbi doors, actually. So, that should continue to help the makeup category as volume returns to – in particular, brick-and-mortar.

Yes. I just want to add that the makeup will continue to follow the user education on makeup, so the normalization from a consumer standpoint. This is happening, but it’s not yet up to the levels it used to be. So, it’s going there and will be there. So, a lot of benefits are still in front of us and not behind us. So, we will see further progress over time, particularly in the East where the COVID lockdowns are still creating issues, not only in distribution, but also in consumer usage of makeup. The other important thing is that makeup is really a blend [ph] is linked to services. And so to have the proper experience, you need critical mass per store. And the critical mass per store is dependent on traffic, as Tracey said. So, this is also getting better. The renaissance is if you want at the beginning. So, more progress is in front of us. And that progress in particularly would also impact positively the bottom line and the profitability of the category. So, we are in the right direction, and we are not yet done on this.

The next question is from Bryan Spillane of Bank of America. Please go ahead.

Thanks operator. Good morning everyone. Thanks for taking the question. So, I just wanted to ask – I think you mentioned in the prepared remarks, you talked a bit about product innovation for ‘23. And I think also in the press release, you talked about targeted distribution opportunities. So, can you just give us a little bit more color on those two items? And I guess one of the things I am interested in is just, is it sequentially – especially on the product innovation, is there sequentially – do we expect, I guess more of a contribution from new products or product innovation in ‘23 versus what we have seen in the last 2 years just because the environment is a little bit maybe more accepting of that? So, just some color on those two items would be helpful. Thank you.

Yes. I will start on the product innovation. The product innovation was a 25% already last year. This is a very good number, and we believe it’s an efficient number. Now, it can be 25% or 30%, depending by quarter. But that’s, anyway, very powerful innovation. The thing that we have improved also the rhythm of innovation. We have innovation really gradually per category, per quarter, per brand in a very sophistic way, market-by-market to make sure that we can leverage it. And the innovation is strongly supported by sufficient media. And our advertising in total is increasing in fiscal year 2022 in absolute level. And that’s a list in the current assumptions guidance. And these advertising – some part of it is guiding the innovation and the innovation results. But also, a lot of our innovation is attracting earned media value in a fantastic way. A good example of this has been MACStack’s in the last fiscal year. So, it’s not only paid media, but it’s also earned media that is attached to high-quality innovation. And so, some of the high-quality innovation is also efficient from the spending standpoint, from a media standpoint for that reason and then finally, innovation is driving pricing because innovation many times is about improving product, improving product performance or entering benefit areas that are more important for the consumer that’s willing to pay more. And so we can invest in our standing products that deliver these results and price for these results as well. So, it’s a combination of factor why innovation is and will continue to be a very strong driver. And if you assume more or less the same percentage of innovation on a growing business, so innovation in absolute – will also increase year-after-year in absolute level. On distribution, we have opportunities still to increase distribution. And we are doing it particularly online where there are a lot of new online ways to access consumer in efficient and productive way. It’s also important to understand that the distribution opportunity at the end is about consumer coverage. It’s about covering consumers that have desire today that are not covered. The best example of this is, for example, in emerging markets, starting from China, as an example, where we are covering 148 cities, but demand come from 600 cities or more, and we serve the cities where there is no physical distribution value online. This is happening the same in India. It’s happening in Brazil. It’s happening in Mexico. It’s happening in many of the emerging markets. So, the new distribution online is covering new consumer in the large majority of cases, and it’s very efficient. There is a lot of opportunity. There is some, which are already in this fiscal year, the fiscal year 2023 assumption. And there are many in the medium to long-term that we are studying and prepared to do.

The next question is from Olivia Tong of Raymond James. Please go ahead.

Great. Thanks. I wanted to ask you a little bit more about the price increases that you are planning, realizing, of course, it’s not clearly the same as CPG. But by tier, sort of super luxury, beauty prestige, how your prices will compare to your peers, especially given that more and more sales are happening in multichannel or online where you will be closer to other brands or consumers can see multiple brands on one screen? And then if I could just sneak in another question sort of piggybacking on Bryan’s about the distribution, the targeted expansion of distribution to retailers that provide broader consumer reach. Fairly certain, I know what isn’t included, but if you could talk a little bit about what that might entail globally and how that – the channel mix progresses as a result? Thank you.

Yes. So, I will start, Olivia, on the pricing piece. We have a very sophisticated algorithm for pricing. So, we do look at price and by SKU, actually, by brand, by SKU relative to what the brand has defined as the competitive set for that particular SKU when we consider what pricing we are going to take, for instance, on, whether it’s on a pricing increase on an existing product or even when we introduce a new product. So, that’s very much taken into consideration. We also, depending on – because we have a very broad price tier, obviously, of our products from Lamar and Frédéric Malle and Tom Ford to Clinique and MAC and The Ordinary. We also look at for our entry-level prestige brands the gap to their comparable closest mass brand. And so we are also cognizant of that. That has served us quite well in those multi-specialty accounts that you are referring to where our goal continues to be trading consumers up from mass to prestige. And that has worked quite well for us in those particular accounts. And then you had a follow-up question on distribution, I think.

That’s right. Just understanding when you say you are expanding your distribution to provide a broader consumer reach, what – I think we all know what that does not entail, but what that does entail globally and what that – what the implications might be both for sales and profit?

Frankly, it’s what I was explaining in the answer to the previous question. And there are – for example, if you go online in a new partner, with a new partner online, with a new distribution, we cover cities and we cover areas, which are not covered by brick-and-mortar. So, these reach consumers that were not reached before. And that’s why expanded our reach. That’s the key thing. So, in other words, doesn’t – we try to avoid duplication in distribution as much as possible and maximize consumer coverage. And the key strong benefit that we are getting, as I said, particularly in emerging markets, but that’s true everywhere in the world, is the fact that we are getting new consumers into our business and sourcing new consumers from us into prestige. Tracey?

Yes. And Olivia, so we mentioned in the prepared remarks, we are introducing Aveda into China. That’s expanding distribution for the brand. So, one way we expand distribution is introducing products into a new market, as Fabrizio was indicating, other emerging markets. We introduced The Ordinary into India via NYKAA. So, that’s one way that we expand distribution, particularly in a market where consumers had not had that opportunity to purchase that product before unless they traveled. We also expand with our existing retailers. So, here in North America, as Ulta and Sephora opened new doors or any other retailer opens new doors, it is our consideration without being over retailed from a brick-and-mortar standpoint of expanding in those stores as well. And that’s an expanded – expansion in terms of distribution. So, if our retailer opens 20 new doors this year, we will open those doors with them. And so we include that in our distribution. I think I said in my prepared remarks that we expect around 2 points of growth this year from distribution. And largely, it’s those types of distribution. Fabrizio talked as well about pure plays. Pure plays have been a fantastic way for us to actually – selective pure plays. We are very selective to actually reach new consumers, in particular, younger consumers and – who are shopping more online and maybe shopping on an apparel site online that we have an opportunity to introduce beauty products to and get a new consumer as well as a new shopping occasion as they are shopping for their apparel products. So, it’s a very thoughtful way that we think about distribution and expanding distribution right now really to focus on reaching new consumers.

We have time for one more question from Andrea Teixeira of JPMorgan. Please go ahead.

Thank you for squeezing me in and good morning everyone. So, my question is on the cadence of the quarter of the year guidance within the quarter. The sell side consumers are more cautious to travel, you mentioned retail inventory, if I am mistaken. I wonder if you are embedding some adjustment to retained employees in Q1? And if so, the magnitude of that impact that would give us more confidence on the recovery for the remaining nine months. And just a clarification on how much you expect sales to decline in China, including Hainan, in Q1, embedded in your guidance? Thank you.

Yes. So, I will start with the last, Andrea. We don’t give specific market information. So, it’s embedded in our guidance. You can certainly – if you think about what we have said previously in terms of the size of those businesses, you can probably back into a little bit in terms of what that impact would be. In terms of the retail inventory situation, we do expect that to improve in the second quarter. That was very specific to the U.S., actually, the Americas, but specific to the U.S. And we do expect that to improve in the second quarter as the holiday season approaches. And we do ship those holiday sets in Q2 that we shipped last year in Q1.

I think the other part of the question was Hainan. And in Hainan in this moment, they are not ordering. So, there is no inventory sold, but they are – still, what they are selling, they are selling from existing inventory. So, there is – there will be the possibility in the future to rebuild and normalize inventories when COVID abates.

And the only other thing I would add and you didn’t ask about this, but currency. So, as you saw in our guidance, currency is a big impact for us this year. Obviously, if currency rates change, that will improve. But right now, if currency rates remain where they are at, and hopefully won’t get worse, then about 70% of the impact of currency – the year-over-year impact of the currency depreciation that we have experienced is in the first half. So, that should moderate. We really saw the currency depreciation beginning in the currencies that I mentioned that are the most impactful to us in the second half of our year, really starting in the March, April timeframe. So, we will be anniversarying that in the second half. So, again, as I mentioned, it’s a bit of a tale of two halves and given some of the macro things that are impacting us in this fiscal year.

That concludes today’s question-and-answer session. If you were unable to join for the entire call, a playback will be available at 1 p.m. Eastern Time today through September 1. To hear a recording of the call, please dial 877-344-7529, passcode 3602158. That concludes today's Estée Lauder conference call. I would like to thank you all for your participation and wish you all a good day. You may now disconnect.