PriceSmart, Inc. (PSMT) Q3 2012 Earnings Report, Transcript and Summary

Good day, and welcome to the PriceSmart Inc. earnings release conference call for the third quarter fiscal year 2012, the 3-month period ending on May 13, 2012 -- or May 31, 2012. [Operator Instructions] After remarks from Jose Luis Laparte, PriceSmart’s President and Chief Executive Officer; and John Heffner, PriceSmart’s Executive Vice President and Chief Financial Officer, you will be given an opportunity to ask questions, if time permits. [Operator Instructions] As a reminder, this conference call is being recorded on Tuesday, July 10, 2012. A digital replay of the call will be available through Tuesday, July 31, 2012, by dialing (888) 203-1112 for domestic callers or (719) 457-0820 for international callers. The passcode is 6547874. I would now like to turn the conference over to John Heffner. Please go ahead, sir.

Thank you, and welcome to our Q3 earnings call. I hope you will find this to be a useful forum to review the information that we provided in our 10-Q filing, which we released yesterday, July 9, 2012. You can find that filing as well as the earnings press release, which was also released yesterday on our website, www.pricesmart.com. Please note that statements made during this call may contain forward-looking statements concerning the company's anticipated future plans, revenues and related matters. These forward-looking statements include, but are not limited to, statements containing the words expect, believe, will, may, should, estimate and similar expressions. These statements are subject to risks and uncertainties that can cause actual results to differ materially, including the risks detailed in the company's annual report on Form 10-K/A for the fiscal year ended August 31, 2011, filed with the Securities and Exchange Commission on January 9, 2012. We assume no obligation and expressly disclaim any duty to update any forward-looking statements to reflect the occurrence of events or circumstances which may arise after the date of this call. Now I will turn this over to Jose Luis Laparte, PriceSmart's President and Chief Executive Officer.

Good morning, everyone, and thank you for joining us in our conference call for our fiscal third quarter, which includes the months of March, April and May 2012. Let me begin by talking about our sales performance for the quarter. Q3 sales were $494.8 million. This resulted in a 17.4% total growth over last year and comparable sales growth of 12.9%. If we look at the numbers in more detail, our sales in the region of Latin America that includes Colombia and all Central America were up 21.8%, influenced by Barranquilla, which has not yet reached its 12-month anniversary. And it is, therefore, not in our measurement of comparable sales. That compares with a 9.7% growth in the Caribbean region. We continue to see a stronger performance in the Latin America region that reflects improved economic conditions given those more diversified and larger markets. The third quarter included the Easter period, which in a lot of our markets is a season for vacations. And we saw good sales performance in the different departments that align with that season. The food categories and the fresh area had strong sales, and our different nonfood programs such as patio sets, grills, beach chairs and towels also saw strong sales in the quarter. We finished those seasonal programs with clean inventories as we transition to the new programs, which are in our clubs now. A lot of our countries celebrate Mother's Day during the month of May, except for Panama and Costa Rica. And we saw very good sales in areas that capture a lot of that business. One example will be our bakery department that reported a growth of 28% for the quarter. I will say that through the years, our reputation in this area has been growing, and we keep seeing good growth as a result of the good quality items that our clubs offer: doughnuts, ring cakes, birthday cakes, et cetera. For the quarter, we have more than 6.1 million transactions in our clubs, and that represents a growth versus last year of more than 17%. Transaction growth was the primary contributor to our overall sales growth and is tracking with the growth of our -- in our membership base, which is the next subject that I will like to give an update on. During the quarter, we added 32,808 new accounts, and we finished the quarter with 949,000 total accounts as a company. Our renewal rate is at 89%. On June 1, 2012, we made the decision to increase our membership fee in 10 of our countries, but we remain with the same fee in 3 of the countries for various reasons. For example, in Colombia, we just started operations last year in August 2011. Beyond, our membership fees are a fundamental part of our business model and are applied to margin as a way of reducing the price. The goal is to channel the fee increase back into lowering price. It has been more than 8 years since our last adjustment in fees. In U.S. dollars, we moved our fee from $30 to $35. During the first month after the increase in fees, our renewal rates remained high, indicating the acceptance of our loyal members to this change. We believe our members appreciate and recognize our efforts on bringing them good value on quality on exciting merchandise and the great member service that they have come to expect from PriceSmart in the different countries. We also truly appreciate your support and we work to earn your business and loyalty every day. As we begin the fourth quarter of this fiscal year 2012, we have a lot of different activities in place to be ready for the beginning of fiscal year 2013 and a busy holiday season in our clubs. As part of that preparation, we're now working in the expansion of 2 of our warehouse clubs. One in David, Panama, where we will be adding more than 5,000 square feet of sales floor space, 2,000 square feet of receiving area and at the same time, relocation and expansion of the current bakery production area. The city of David in Panama continues to be one of the fastest-growing areas in Panama, and we believe we need to make this expansion to better serve our members' needs in this community. We also started expansion of our warehouse in Barbados, where we're adding 2,700 square feet of sales floor space, giving this club an additional 232 pilot positions to support a good sales growth we have seen. This club was originally open with a footprint that is approximately 25% smaller than our standard club. An unusual event happened last month in one of our Costa Rica clubs. A pallet fell from the steel and injure a member. This is a very rare and unfortunate event. We view the safety of our members and our employees as our #1 responsibility. We're providing support to the injured member. And as a result of this incident, we have made changes to certain operating procedures within our clubs relating to how we store and handle our merchandise. During the third quarter, we made a lot of progress in the construction of our second club in Colombia, in the south part of the city of Cali, in an area called Cañas Gordas. Two weeks ago, we started our membership sales in this market and initial results are positive. We're looking at opening in October 2012. As I talk about Colombia, I will -- I also want to share with you that we will begin during this month of July the construction of our third club, also in Cali. This one in the north part of the city. Opening is planned for spring 2013 for this club. In terms of expansion in existing countries, we continue to pursue the necessary permits and approvals for us to close on the land we have identified for our 6 warehouse club in Costa Rica. That process is taking a little longer than we had hoped, and we now project that this new club will be opened in the fall of 2013. At the same time, we continue to look for other opportunities to add additional sites in existing market. As many of you may know, a few years ago, we launched our eCommerce operation in our country. It is now in place everywhere except Colombia. And during the last quarter, we had 2,500 transactions from members taking advantage of our offering of more than 2,000 SKUs of nonfood that are not available in our everyday assortment in the clubs. That represents a growing transaction of more than 24% compared to the same quarter last year. While this is a still a very small part of our overall sales, we believe this is only the beginning of something that will keep growing, as people in our markets get more familiar with the world of eCommerce, which is not as developed yet as it is in the U.S. and other markets. In addition, eCommerce provides another avenue of value and convenience for our members, and we believe that our sales would increase in this area as we continue to improve our knowledge of the eCommerce business. As we're getting to the final quarter of this fiscal year, we are keeping our focus on growing sales and executing our merchandise plans. At the same time, we recognize how important low operating expenses are to the success of our business model. As many other retailers, we face important challenges on payroll expense, utility cost, credit card cost, maintenance and repairs, et cetera. We have actions in place to leverage our operating expenses as we keep growing our business in the different PriceSmart [ph] countries, delivering good service to our loyal members and providing good wages for our employees that work so hard to make our members experience a good one. Before we take your questions, let me turn things back to John Heffner for a few additional comments about the financial results.

Thank you, Jose Luis. You all have the numbers from our release and filing yesterday, so I will not go over them in detail. However, I would like to touch on a couple of items, and perhaps in doing so, I will have anticipated some of your questions. As Jose Luis mentioned, net warehouse sales grew 17.4% in the quarter and comparable warehouse club sales for the 13 weeks ending June 3, 2012, grew 12.9%. There was no change in the number of warehouse clubs used in the comp calculation during the 13-week period with 28 of our 29 warehouse clubs in the comps. Warehouse gross profit margins were even with last year and up 28 basis points from the first 6 months of the year, in part due to improved importation costs for goods coming into Colombia. Membership income in the quarter grew 19.2%, a 19.6% growth in member accounts. As was the case in Q2, the difference in membership account growth compared to the income growth relates to the timing of when accounts were added, which was not even over the course of the 12-month period. In Q2, we spoke of a onetime correction to member income we recorded in that period, totaling $323,000. While this would impact the 9-month comparison to the same 9 months last year, it had no impact in the current quarter. Warehouse club operations expenses grew 19%, resulting in a 12 basis point increase as a percentage of sales, 9.33% versus 9.21%. The infrastructure investment we are making in Colombia as we grow the sales contributed about 2 basis points of the increase. However, the more significant item affecting this line in the P&L was a onetime $777,000 expense taken in the quarter related to our Central American third-party credit card processor having erroneously under billed the company for certain debit card transactions during a period of approximately 4 years. The processor had been correctly charging the company for these debit card transactions since December 2011. This item negatively impacted operating expenses by 16 basis points in the current quarter. Operating income grew $3.5 million or 16.1%, slightly less than the sales, largely as a result of the prior period debit card charge we took. Two items below operating income negatively impacted the current quarter net income and EPS when comparing to the year-ago quarter. The first item was currency. Currency, which we no longer report in gross margin but in other income and expense, had a rather significant year-on-year impact in the quarter. For the current quarter, we recorded a $449,000 currency loss. In Q3 last year, we realized a $1.2 million gain. To put this in EPS terms, this alone accounted for nearly $0.04 in comparing the current quarter to Q3 of last year. The second item. In Q3 of fiscal year 2011, so last year, we received a gain from 2 real estate transactions in Panama. We sold our Los Pueblos site and we sold another parcel of land in Panama. Together, we recorded a $1.2 million net income gain, which added $0.04 per share to last year's Q3 results. The effective tax rate for the quarter was 33.9% compared to 30.6% last year. Most of the increase was due to changes in applicable foreign statutory tax rates. However, the prior period charge for debit card processing fees, for which the company did not recognize a tax benefit contributed about 1%. Colombia had a minimal impact on the change in tax rate from the prior year in the quarter. From a balance sheet perspective, we ended the quarter with $105 million in consolidated cash and equivalents. For the first 9 months, we have generated $76 million in cash from operations; we have used $36 million in capital additions, including land purchases mostly in Colombia; and we made a $9 million dividend payment at the end of February. With that, Jose Luis and I would be happy to take your questions. Operator?

[Operator Instructions] And we'll go first to Dave King with Roth Capital.

Maybe just kicking it off a bit here. Understanding that your long-term strategy to pass along efficiency benefits, et cetera, and generate lower prices and higher volume, with that in mind, can you talk a bit about your target gross margins? I know gross margins dropped in the quarter and sounds like some of that was from the importation cost into Colombia, but I'm just trying to think about that in the context of being at the lower end of historical levels. And how should we think about that versus long-term targets and the potential for further improvement in coming quarters?

Well, I think you correctly stated our model is that to continue to reduce prices. And it is our business model as we can leverage our operating expenses below gross margin to pass that back in lower prices, which results in lower gross margin. So I think on a go-forward basis, our intent is to continue to lower prices, get the expense leverage or operating expenses as we grow sales, and we would probably see lower margin percent going forward. But I don't think I have a specific target in mind. We tend to focus more on operating margin. And so gross margin could come down as we get that leverage in operating expenses.

Okay, that's helpful. And then, so maybe then switching a little bit then toward the operating margin. And so on the SG&A side, you talked about that, you talked about the factors that drove the increase this quarter. But it generally seems to bounce around a lot as we move over the course of the year with those pretty material impact on earnings. Is there a target there that you manage to? And how should we think about that as far as how it changes seasonally, if at all?

Well, I think the bigger impact to earnings in the current quarter were things that happened below operating income, not operating income itself. I think operating income was about 5.1%. Operating margin was 5.2% a year ago. And I think we took that charge here in the quarter, which other than that, we would have actually seen, I think, an increase in our operating margin percent. But I think we're sort of in the range of where we expect to be. And where we are right now I think our margin might have been a little higher. In Q2, we have the holiday season and significantly more sales at that point.

Okay. And then another question just on your -- you typically adjust prices to maintain a target margin like you talked about. Given what we've seen in terms of maybe recent dollar appreciation, but then also in the context of declining oil prices, shipping costs, et cetera, how do you feel about the need to raise price at this point? And did we see any of that in the quarter at all?

No. This is Jose Luis Laparte. Not at all. Actually, we -- any efficiency we keep finding, we just keep lowering prices. We haven't had any specific action raising them. On the contrary, we keep reacting as aggressive as possible on reducing our prices. Any benefit we can take, we just take it down to lower our merchandise prices.

And we will go next to David Strasser with Janney Montgomery Scott.

First question is, as you raise the membership fee, how should we be thinking of the flow-through of that through the P&L? Will you -- will some of that be reinvested back into pricing? Will a lot of that flow-through back straight through to the bottom line?

Yes, David. Definitely, the principle of raising the membership fees, obviously, we did those. The fees are fundamental part of our business model, and we apply all that to margin as a way of reducing prices. This was a $5 increase. And as I mentioned in my script, we will channel back into lowering prices for our members. There's no any other concept, but just after 8 years of not moving anything in our membership, we felt it was the right thing to do. But again, we keep lowering our prices in an effort to keep showing our members the value for the $35 membership.

So I should assume that most of that will be reinvested back into pricing?

Correct, that's our business model for sure.

Okay. And when you're looking at membership and new members, how do you count membership numbers for clubs not opened yet? It looks like spend per member has actually gone down a little bit. Are you -- I'm just trying to understand the numerator and denominator there.

We don't -- while we're selling members -- memberships right now for our new club in Cali, we wouldn't count that -- those members until we open the club.

Yes, right now -- even though we started 2 weeks ago, those are not counted in our total count of membership accounts.

So then spend per member has actually gone a little bit negative. I mean -- or lean or is a little bit lower. Any reason why that's happening?

Not sure what you're looking at for that.

No, yes, we don't have that same perception. It's actually consistent. It is not growing at a high rate. We haven't seen that spending -- average spending from members really suffering at all. They are actually doing more transactions, and we have a growing transactions, and -- but we haven't seen any decrease in membership spending at all.

Okay. And I guess the last topic, looking at Colombia, trying to understand, and you may have talked about this a little bit. I'm just trying to understand, bigger picture, how the expense structure there and how much leverage there -- is there as you get into clubs 2 and 3 on the existing infrastructure in Colombia. And as we -- because as you kind of go through the P&L and you kind of try and back out what the strong sales are in Barranquilla, assuming similar type gross margin, you're still seeing some deleverage there. So I imagine a lot of that has to be about infrastructure in the company that's been built out. And when do you think that becomes a leveraging from a deleveraging on that infrastructure?

Well, definitely, from an operating perspective, the infrastructure we have in place in Colombia is equivalent to what we will have in countries with 3 or 4 clubs. Obviously, depending on a number of factors, including the growth of sales in the new clubs once they open, the pace of finding of new clubs and the cost of those new clubs, we will see different profitability level within Colombia. But I guess, we will -- we definitely have the infrastructure in place for our future growth for adding more clubs, and we're going to start seeing some good leverage as we open the second one in this fall and the third one early in spring 2013. So that...

But there's no reason that Colombia should be a less profitable business than other -- than the rest of the businesses, if anything, with the volumes, at least, it could be more?

No, there's no any reason at all that we see Colombia being behaving different from the other markets. The indications with the performance of the first one is that could be as good performer as the other countries.

And we'll go next to Jon Braatz with Kansas City Capital.

John, did you say that you're taking new memberships for the Cali store at this time?

Yes, we are.

Okay. Is there any way to get an early read on the membership roles there compared to what you saw in Barranquilla early on?

Jon, this is Jose Luis. We don't really disclose that. I will say that it's a positive start, as we saw it with Barranquilla, but we're not ready to disclose the numbers. And again, we just started 2 weeks ago. We're still probably 3 months away. So it will only get better, but we don't have any numbers to disclose at this point.

Okay. And then, Jose Luis, you said that despite the increase in the membership fee that the renewal rates were still good in June. Were they still at sort of the 89% rate that you've been seeing?

Yes. We don't -- we haven't seen any slowdown in -- and again, it's only one month. But I think, at this point, the members are appreciating the value. And reality is after 8 years of non increase -- of no increase at all, I think they didn't really mind the $5 increase that we had in the fee. So indication is good even the comments at the clubs. We don't really get a lot of comments from members or surprise from members. We made a good job explaining them that we raised the membership fee in terms of, I guess, in exchange of lowering our prices. So we are now proving that, and we will keep proving that in the next 12 months in an effort to keep our 89% renewal hopefully through the year.

Okay. John, do you think we'll see, in terms of the preopening expenses for the first Cali store, more in the fourth quarter or the first quarter?

I think we'll probably see a little more in the first quarter for opening this in October. There'll be certainly some in Q4, but that'll probably be little more in Q1.

Okay. Are the level of preopening expenses similar to what you might see in other stores?

I think it's similar to more how we did in Barranquilla as opposed to existing markets.

Yes, it is going to be more similar to Barranquilla. Actually, Cali is a city, obviously, completely separate from Barranquilla. So it's like opening a new country in some respect because you are opening miles away from the other one. So there is a little bit more, but very consistent with what we experienced in Barranquilla for sure.

Okay. Last -- John, last year, at this time, you said that you were really being very careful about opening the Barranquilla store and probably overdoing it with some expenses just to make sure that it's done right and there's no problems. And you incurred probably some expenses that might have been above normal for a new store opening last year. Will we see anything like that associated with the Cali stores?

Jon, this is Jose Luis. I will say that we learned a lot with Barranquilla. We probably learned the hard way with some things that -- obviously, as a new country, as a new -- opening after so many years, we got a lot of things that we learn as we open. So I think we apply a lot of those learnings and we see a more, I guess, consistent opening and much more control in terms of expenses in this case of Cali. I think we went through the hard part already.

Okay. It looks like the Barranquilla store is just sort of knocking the cover off the ball. Is -- do you want to make any comment about -- subjective comment about how well Barranquilla is doing?

I guess, as just said, it is doing good for us. So we're happy with the business and the indication of opening a second and third club in Colombia is because we believe there is -- we like what we have seen in Barranquilla, and we believe there is good opportunity in the country, the rest of the country.

And we will go next to Ronald Bookbinder with The Benchmark Company.

I was wondering why aren't we -- why isn't selling, payroll, general, administrative salaries not experiencing leverage with the almost 13% comp? And what comp level would you need to achieve to gain leverage on these items?

Yes, I think we did see some leverage if we remove the charge that we took. So I think we did see some leverage if we move that, but I think there really is room for improvement in leveraging our SG&A cost even further. With the 17% growth in sales, we should -- we probably should do a little better job in that area. We did see some leverage, but I think that's a focus for us going forward to try to achieve more. Jose Luis, do you want to add some?

Yes, I will say that definitely, we believe there is a space for improvement still. I guess, as I mentioned, every -- as a lot of retailers are facing challenges in utilities, credit card costs, different areas, so I guess what we need to do going -- doing and we will keep doing in fourth quarter and next year is just keep looking for ways to find efficiencies and get more leverage. There is some homework for us for sure that -- and we have actions in place to keep improving in that area.

Okay. Because I thought the Q said that selling, payroll increased the SG&A by about 8 basis points, which was a surprise given the comp. Okay. One, on the membership fees, the last time you raised membership fees, 8 years ago, did it impact renewal rates, traffic or revenue? And what other markets outside of Colombia are you not increasing the fees?

Well, I think 8 years ago, we were probably in a very different place as a company 8 years ago, so I'm not sure it's a comparable view to look at things that could have operated then. So I think we need to sort of focus on what we're doing now and the kind of value and the merchandise we have, and I think the role we play in some of these countries, it's a very different place.

Yes, I don't think we have any historic information on that. It was a decent transition, but definitely we don't have enough information to talk about that because we really changed a lot of things in the last 8 years within the company. And that the other markets besides Colombia where we recently open and we didn't need to change anything. USVI, we made a slight change in January last year, so -- I mean, January this year. So there was not any need for another increase. And the other market was Barbados, where there was not any change either. So those are the -- in a lot of markets, given the exchange rates and -- mostly exchange rate, we were already at a $35 price point on membership. So there was no need to make any adjustment.

Okay. And lastly, inventory up about half of the sales increase. How should we think about that going forward? Was there something that happened there? Because it really helped drive some terrific cash flow.

Yes, there's been a real effort there in that area with our merchandising group. And so I think we've got some benefit of that this period.

Yes. And we're going to try to continue that. But obviously, our focus is to keep driving sales. We're getting into -- basically, in a few weeks, we're going to start seeing some Christmas items in our clubs. So this is the time of the year that we will start for sure building inventory. But we are very focused on inventory turns and try to leverage as much as possible the flow of inventory because we also have, obviously, the challenges of the clubs having limitation of the space to handle all the merchandise. So there is a good plan in place. But for sure, we will continue to find the leverage on inventory turns as we get ready for a busy holiday season.

[Operator Instructions] We will go next to Patricio Danziger with Everest Capital.

I was wondering if you could give guidance on operating margins or EBITDA margins for the next 3 years. Or if you think -- I mean, if you can give a guidance, it's going to increase 50 basis points or 100 basis points or are you going to maintain the margin?

Well, thank you for your question, but we don't provide guidance going forward.

Okay. And also, looking at retail -- margins of retailers in Colombia, I see, for example, Éxito having EBITDA margins of around 8%, do you think you can have EBITDA margins higher in Colombia than in the rest of the region?

I would think Colombia should probably look like the -- similar to the other countries that we operate in. We're operating the same business model there as we would operate in the other countries that we're in.

Yes, we don't see Colombia different than the -- competition is probably -- probably there is more competition in Colombia in general terms. More presence of retailers, Éxito, Carrefour, for sure, Olimpica. So there is more competition, but I don't think we see that any different. I guess we operate with the same margin principles and the same membership concept that we do in any other market. So regardless of what the other guys are doing in retail, we keep operating on the same principle in Colombia. We don't do anything different in that market.

Did you have any problem in terms of distribution in Colombia?

No. I mean, we have some challenges at the very beginning just as we were opening our first new club. But now, it's pretty much under control. And no, we basically operate in the same way. We have a very efficient distribution operation, obviously, from Miami, from Mexico, from both of those, D.C.s [ph] and one in L.A. And we ship the merchandise directly to Barranquilla to the port over there. We're using a different port for Cali. And -- but that is pretty -- it's very similar, I will say, the distribution process right now in Colombia as it is to the other countries.

I suppose -- I mean, you're saying that you're working on leveraging the company, so trying to increase margins, right? So I suppose I have to assume higher operating margins in the future even though you don't give guidance, right?

You're correct. We don't give guidance.

And we will take a follow-up question from Ronald Bookbinder with The Benchmark Company.

Just one last question. Currency translation, you called it out. Was there any abnormal event? Or was it the simple devaluation of the local currencies versus the U.S. dollar?

It's both currency pluses and minuses in our country as against the U.S. dollar depending on the [indiscernible] net asset or net liability position. Last year, it was largely driven by a strengthening of the Colombian peso. We got a pretty big bang out of that last year. And this year it was spread across a number of different countries that participated in the $400 and some thousand -- $449,000 loss we took. But there was not -- there wasn't a big feature [ph] of those, just across a whole number of countries.

Okay. So like in Colombia, after you first opened, you had a lot of liabilities in U.S. dollars and you hadn't put those into hedging instruments, and the peso devalued. So there wasn't any event like that? It was just simple run of the mill currency movements in the market?

Yes, generally speaking, yes. We've taken a lot of actions to reduce our exposure, particularly to the Colombian peso, which we find to be a bit more -- moves around a bit more than our other currencies. So that's been -- we've taken some action there to -- in terms of hedging instruments and local currency bank loans and things like that. However, we cannot -- the nature of our business, we can't entirely eliminate the gains and losses that might be incurred going forward, but we try to minimize our exposures.

And we will go to Nitin Saigal with Bridger.

I just want to clarify on expansion. You said Panama, 5,000 square feet of selling space and Barbados, 2,700. Was that it in terms of expansions?

That's expanding the size of our current clubs, that's correct.

Okay. And any more on the calendar in terms of expansions?

None at this point. In terms of -- I think we did pretty much on the ones we were able to do in the last 3, 4 years. We have expanded as many buildings as there was the ability to do it based on the space. So I don't see anything on the calendar or on the radar for the next few months. And we were looking more at the expansion of adding buildings, but as far as expanding current ones, we're not planning anything in particular. We do some small bakery expansion, some other different remodels in our fresh areas. But nothing that would be addition of sales floor space in particular as we are doing with these 2.

And we will go next to Dave King with Roth Capital.

Just one more quick follow-up. As far as the 17.5%, 17%-plus sales growth in the quarter, how should we think about that in terms of transactions versus average ticket? And then also for the June comp numbers, how should we think about that as transactions versus ticket?

I think it's largely transactions as been the case for quite some time. So I think the transactions account for 90%-plus of the sales growth in the quarter. And I think that would -- probably this was true in June as well.

Yes.

And at this time, there are no further questions in the queue.

Okay. Well, I want to thank those on the call. And thank you, operator, for moderating this. And I wish you all a good day. Bye-bye.

Thank you.

And this concludes today's conference. We do thank you for your participation.