MDLZ - NASDAQ

Good day, and welcome to the Mondelez International Third Quarter 2024 Earnings Conference Call. Today's call is scheduled to last about one hour, including remarks by Mondelez Management and the question-and-answer session. [Operator Instructions] I would now like to turn the call over to Mr. Shep Dunlap, Senior Vice President, Investor Relations for Mondelez. Please go ahead, sir.

Good afternoon, and thank you for joining us. With me today are Dirk Van de Put, our Chairman and CEO; and Luca

Thanks, Shep, and thanks to everyone for joining the call today. I will start on Slide 4. I'm pleased to share that we delivered strong top line growth with positive volume mix. Developed markets grew mid-single-digits, led by solid progress in North America biscuits as well as recovery in Europe following successful implementation of our annual pricing. Emerging markets also grew mid-single-digits, despite continued boycotts of Western brands in certain markets. Strong profit dollar growth enabled us to continue our track record of robust free cash flow generating $2.5 billion year-to-date. We expanded our presence in the fast growing cakes and pastries category by acquiring a majority stake in Evirth, a leading player in cakes and pastries in China. And I'll provide some additional color on this exciting partnership in a few minutes. We remain diligent in driving progress against our long-term growth strategy, focused on our core categories of chocolate, biscuits and baked snacks. These core categories continue to show strong consumption, and on top, consumers remain very favorable to our iconic portfolio, as such generating significant headroom opportunities. These strong fundamentals, combined with our advantaged geographic footprint, keep on giving us confidence that we are well positioned to compound long-term sustainable growth. Turning to Slide 5, you can see that organic net revenue grew 5.4% this quarter, with adjusted gross profit dollar growth of 11.2%, enabling us to continue investing in the business. A&C spending is up mid-single-digits, helping to drive continuing consumer and customer loyalty to both our iconic global brands and our local jewels. And adjusted EPS grew 28.6% this quarter, and we have generated $2.5 billion in free cash flow through the first nine months of the year. On Slide 6, we are pleased to see that developed markets are beginning to recover with solid revenue growth and an increasing healthy volume mix in the third quarter. Unlike many of our peers, we are seeing continued consumer uptake of our core snacking categories. In North America, we are seeing volume growth start to rebound as inflation cools and we continue to expand distribution in areas like club. Similarly, in Europe, revenue grew 8.1% in the third quarter, following significant disruption earlier in the year, as our annual pricing took hold. Unlike many of our peers, both volume mix and net revenue are beginning to turn the corner. Consumers are continuing to embrace chocolate and biscuits as everyday indulgences, And our revenue growth management strategies enable us to meet every consumer's needs, with a broad array of product formats, pack sizes and price points to meet their definition of value. Turning to Slide 7, you can see a bit more context on how and why our snacking categories remain durable. In North America, consumer confidence remains stable, despite continuing concern with overall grocery prices. Biscuit category volume is improving to flat to slightly up over the last three months. In the United States, private label volume share is declining, demonstrating that consumers remain loyal to their favorite brands and that our price pack architecture is working. As a result, our two largest US brands, Oreo and Ritz, are gaining share year-to-date. Meanwhile, in Europe, elasticities are moving slightly higher, but remain modest. We continue to see solid category value growth in both biscuits and chocolate, with private label share declining over the past three months. Some consumers are shifting to smaller packs of chocolate for everyday snacking, and again, our RGM and price pack architecture enable us to offer an appropriate range of choices. As we head into the year-end festive season, seasonals are also looking solid. In emerging markets, modest elasticities continue. Consumer confidence is stable in India, Brazil and Mexico. While the overall China economy remains challenged, we're seeing optimism beginning to return as stimulus policies take effect. Overall, our combined emerging markets value and volume share is improving in both biscuits and chocolates. Turning to Slide 8, it's important to reinforce that while the external environment remains volatile, we remain focused on accelerating our long term growth strategy. We're continuing to reinvest in our brands, expand distribution, drive M&A and scale sustainable snacking. We remain on track to deliver 90% of revenue through our core categories of chocolate, biscuit and baked snacks by 2030. And our teams continue to deliver strong progress against our strategic agenda. For example, our Oreo brand launched in August an innovative collaboration with Coca-Cola, our largest global brand activation to date. These two iconic brands joined forces in a 360 degree marketing campaign, encompassing digital, social, celebrity and in-person activation to unite our strong fan bases and build buzz around two high profile limited editions, a Coke flavored Oreo cookie and an Oreo flavored

Thank you, Dirk, and good afternoon everyone. Q3 was a strong quarter across our key financial metrics, including top line, gross profit dollar, A&C investments, earnings growth and free cash flow. Revenue grew 5.4% with strong pricing execution and positive volume/mix growth. Developed markets grew 5.6% with a volume/mix increase of 1% driven by both North America and Europe. Total revenue for emerging markets grew 4.9% with a volume/mix decline of 1%, driven by Western brand boycotts in EMEA and the lower volumes mostly in Mexico. Moving to portfolio performance on Slide 14. Biscuits and baked snacks grew 3.3% for the quarter. Several brands delivered robust growth including Oreo, Ritz, belVita, LU, 7 Days and Club Social. US biscuits delivered solid growth in the quarter with a good balance from both pricing and volume/mix. Chocolate grew plus 9.2% with strength in both developed and emerging markets. Volume/mix was down minus 1.2%, driven mostly by challenges in Latin America whereas most of Europe came back strongly after customer disruption. Cadbury Dairy Milk, Milka, Toblerone and Freia Marabou all delivered strong growth for the quarter. Gum and candy grew 5.6%, driven by continued momentum and strength in key markets, including Brazil and US candy. Volume/mix in this category was slightly positive. Let's review market and share performance on slide 15. We held or gained share in 35% of our revenue base with solid results in chocolate as well as in gum and candy. This strength was partially offset by our US biscuits business, which accounts for approximately 25 percentage points of revenue. We expect total share metric to improve moving forward as Europe gained share in Q3 following customer disruption in F1. The US still has work to do, but we have seen shareholding in the last three months and believe new price packs in Q4 should help drive further improvements. Moving to regional performance on Slide 16. Europe grew 8.1% in Q3. Execution was strong in key markets such as the UK, Germany and France, all delivering significant growth. We saw a slight uptick in elasticity resulting from pricing, but consumer sentiment remains relatively stable. OI dollars were up more than 46%, including significant A&C investments and due in part to pricing versus favorable cocoa phasing. North America grew 3.7% against a strong compare of nearly 10% in the prior year. Solid performance in growth channels, distribution gains and impactful brand activations like the Oreo Coca-Cola partnership drove Q3 growth. New price pack for Oreo, Ritz and Chips Ahoy! that will provide better representation in the $3 to $4 range are just beginning to hit retail shelves now. North America OI increased 6.5%. AMEA grew 5.8%. China posted strong results with high single-digit growth fueled by continued investments in brand building across Oreo, Chips Ahoy!, and Stride, coupled with ongoing distribution gains, adding approximately 80,000 new outlets on a year-to-date basis. India was down slightly in Q3, driven by a decline in biscuits, where inflation has led to a more competitive promotional environment. On the flip side, chocolate continues to perform well, especially within the low unit price segment, which grew mid-single-digits. Australia, New

[Operator Instructions] We'll go to our first question from Andrew Lazar with Barclays.

Thanks so much. Good evening. Maybe, Dirk, first, I was hoping you could discuss the puts and takes in 3Q and maybe specifically how that shapes sort of your strategy in chocolate going forward in light of the challenges that cocoa is going to present next year?

Yes. Hello, Andrew. Well, overall, I would say we feel good about Q3, the results, and also the dynamics that we see in there. So as you could see, we have a strong top line growth. We have positive volume mix. And the consumer, I would say, in most places is holding up well. Developed markets came back with solid balanced growth in North America and also Europe strengthening again. And the emerging markets remain solid. There's a few pockets of softness there, but we have clear plans to address that. We continue to invest in working media and our brands. We -- and our bottom line was very strong with good free cash flow results. So we can't complain, I would say, about our quarter. And I think the feeling that the top line will continue to be robust into next year is certainly there, because we feel that overall the business is quite healthy and we have very good activities planned for next year. Yeah, chocolate is a challenge, but we are quite clear on which principles we have and what vision we have to deal with the cocoa challenge. Our first focus is to protect the health of the chocolate category, which is a great category. Our second one is, of course, within that category to hold or gain market share and taking an overall long term approach to how the category will develop and how our business will develop. We have to price next year, but we are very conscious of making sure that we protect key price points and certain thresholds. So we're doing a lot of work on our low unit pricing in emerging markets or entry level pricing in developed markets. And we're launching a bunch of new sizes in our chocolate business. I think our RGM plans are well thought through. We just went through everything with all the different business units that we have, and I think the work that has been done is very strong. And we've really thought through how we think the category will evolve in the coming months. We are planning to continue to invest in our brands, but we did look at all the non-working media and are aiming for some significant efficiencies there. And then, of course, we will also work on our other costs, particularly overhead costs next year, so that we can deliver what I would call a reasonable financial result overall. The rest of our business is business as usual. Maybe a few more things in the sense that we are not taking any shortcuts for short-term gains next year. We do realize that there is additional pricing and we will have some extra pressure. But overall, as I said before, we think chocolate is an outstanding category and we are fully committed to it. And the other maybe thing is, things can go different as it relates to reaction to pricing. We have assumed normal elasticity, but that could be more or less or cocoa pricing is still very volatile. It could be more or less than we planned. So being agile next year in how we deal with those situations will be another critical thing for us, I believe. I hope that helps.

Thank you. Yeah, very helpful. I appreciate that. Thank you. And then just a quick follow-up, Luca, I realize obviously you're not prepared to provide detailed 25% guidance yet. But fourth quarter, as you mentioned, it's the first one where you'll see the impact of significantly higher cocoa costs. So I guess how does this 4Q implied guidance, which looks for EPS, I think, down some 20% or so year-over-year inform the way we should think about next year? Whatever else you can share along those lines knowing you're not going to provide the full thing yet? Thank you.

Thank you, Andrew. I mean, I will start by saying that we are clearly very happy with EPS on a year-to-date basis and that I think will help us understanding a little bit better Q4 next year. We have landed today all pricing in line with our expectations and we are in general priced to a level that is higher than our actual cost of cocoa for the first three quarters as our cocoa buying strategies have been clearly quite advantageous compared to in-market costs. As you rightly point out, the implied EPS for Q4 based on us reaffirming guidance is down year-on-year. But I said in the prepared remarks that I see that as a sort of anomaly. First of all, because cocoa costs for Q4 were locked in when cocoa was at peak value. And second, clearly in the numbers in Q4, there is no effect of additional pricing or for that matter of the cost measures that we will put in place as of the beginning of 2025. Bear in mind that in 2025, pricing will not flow through as of day one. And so it will take a little bit of time for profit to improve and quite frankly profit improvement is more towards the second half of the year. Please also consider as we talk about 2025 that cocoa costs are lower in the second half versus half one. On ‘25, I can tell you that we have done a lot of work in scrutinizing all our costs and we will be removing sizable costs, particularly in the area of overhead and non-productive media expenses. We have increased the amount of productivities that we'll be delivering to our supply chain and we've had clearly a full slate of initiatives in our GM that should limit elasticities. As I said, it is hard to see a path to EPS growth into 2025 unless cocoa adjusts now materially and that is still a possibility and/or elasticities are more benign, allowing us to price more. We have seen as of late following the price increases we put in place in Europe, for instance, that elasticities have been fairly benign. So if we realize that volume is there, we might push price a little bit more forward to in an attempt to offset the cocoa impact that we will have inevitably next year.

We'll move next to Ken Goldman with JPMorgan.

Hi, thank you. Good afternoon. I had one question on North America and then a follow-up. On North America, the comment was made that your categories are sort of bucking the, what seems to be a larger, more challenged trend across snacking. And you did mention RGM as being part of it. I appreciate that. Just trying to get a sense what you're seeing as the other factors that is allowing or that are allowing your categories to do better than what we're seeing kind of elsewhere across that broader snacking continuum as someone once said?

Yeah. Ken, the -- I would say the category is growing modestly and is improving slightly. And I would say that, overall, we see the consumer also getting more confident. But high prices remain certainly a big concern, high food prices, I would say. And consumers clearly feel that their purchasing power is deteriorating, particularly, I would say, in the lower income consumers. They're the ones that feel most of the pressure. I would say that as it relates to our categories, first of all, we have recognized that the perception of value of the consumer has changed. If you go two years back, consumers were really shopping for the price per pack or the unit price and so family sizes and party sizes became very important. Going forward or since a few months now, two quarters, I would say, many consumers that are below a certain income level have to shop by the total size of their basket. I would say that biscuits remain important for them. It is part of most shopping baskets. And as a consequence, we needed to fit our products within that shopping basket. And that meant that particularly the $3 to $4 price point has become very important. And so in Q3, we have worked with promotions to bring our products there. And going forward, we have launched a range of new packs on Chips Ahoy!, on Oreo, that will be sold at $2.99 And so we think that's the way we are bucking the trend really. So on one hand, category that the consumer really doesn't want to do without, and so the overall category is pretty stable. And on top of that, we're starting to gain some market share because we are hitting the right price points right now.

Thank you for that. And then for my follow-up, I wanted to make sure I understood the comment about next year, the majority of the portfolio, being -- growing within algo on the top line. Is the implication that part of the portfolio, the minority will not be within algo? And just trying to get a real sense of what the messaging was there about the top line next year, just given all the puts and takes about elasticity and pricing and so forth?

Yeah. It's basically related to our mix of different categories that we have. We have 70% of our business that is non-chocolate, and that is the part that we are expecting to be in line with our normal algo. And then the chocolate part will not be in line with our algo. That's what we were referring to.

On the bottom-line specifically.

On the bottom line. So that was a bottom line comment just to make sure?

Yes. I said that 70% of the portfolio is on algo. The remaining part which is chocolate is not going to be on algo on the bottom line.

Great. Thank you.

We see pretty strong top line for next year.

Yeah, that's why I wasn't -- no, that's helpful. Thank you. I appreciate it guys.

Yeah.

Thank you, Ken.

We'll go next to John Baumgartner with Mizuho Securities.

Good afternoon. Thanks for the question.

Hi.

Hi.

Dirk, I'd like to ask about the growth plans for cakes and pastries. And if you could speak to your vision there, to what extent do you view the company as sort of a disruptor in the space where there's unique capabilities in biscuits and confection that you can sort of leverage in baked goods? And in light of Evirth and that frozen cake technology, the capabilities from that, to what extent is that a China-specific opportunity relative to one that could be expanded to Europe, North America, some other markets? Just maybe your thoughts on where you see your advantages competing in the baked goods space? Thank you.

Yes. Well, cakes and pastries -- packaged cakes and pastries is a $95 billion category. It's much bigger if you include the non-packets, but that's not the area that we consider as where we want to play. It is a category that's already growing 7% CAGR over the last five years, and in fact, low double-digit over the last two years. Per kilogram, it's higher value than the biscuits category. And the category is quite strong in some of the key markets where we play, the US, Europe, China. The opportunity is that it's a highly fragmented category. We are number three globally, but we only have a 3.5% share. So there is an opportunity to bring in known brands that come with a certain quality aspect and a certain positioning, but also by offering soft cakes or pastries that are in line with that brand from the biscuits category. So, an Oreo to play in that category, for instance, or some of our other brands. That is really the way we are thinking about it. Now, there's different techniques in producing these products. Evirth particularly, we already have a company that goes from frozen to fresh in the store, which is Give & Go in Canada, which is a company that's been growing very fast. And Evirth is similar, but to the sense that they are much more into the cake segment. In China, this category is really booming. These are quite sophisticated products. And I have to say that the quality that they can produce thanks to their proprietary way of producing is quite exceptional. And so we think that, first of all, in China, this is a big opportunity. The business has been growing serious double-digit for the last years, and we can see a long runway of possibilities. But we have started to think about, okay, how can we expand this to the rest of the world because the quality is so high. But for the time being, our first priority is to make sure that we get the strong growth that we would like to see in China.

Thanks, Dirk.

Okay.

We'll go next to David Palmer with Evercore ISI.

Thanks. Your comments on 25% were pretty clear in saying that you see -- hard to see a path to EPS growth in ‘25 that would likely require a breakdown in cocoa or sustained benign price elasticity that could enable perhaps earlier price offsets to what you're seeing. I wonder right now obviously you don't have that visibility into that and I wonder what the reality would be, when that reality would be that you could essentially feel like you could give a pretty narrow range of EPS outcomes for ’25. Is it something that like by the first quarter earnings you would have that sort of a timeframe where you have pricing in place, you're seeing a reaction from that, perhaps you're a little further into your cocoa price setting for the year, I'm just wondering about the timing.

Look, I think here, as I said there are two elements that will come into play. One is cocoa prices. There has been some nervousness in the market as of late, but we believe that it is the result of the fact that the industry is still quite short and that the Ivory Coast has hardly sold any ‘24, ‘25 crop in the last month since they're waiting for the new crop to materialize. On the fundamentals of cocoa, the latest spot count is likely below the five year average in Ivory Coast, same in Ghana, but it is well up versus last year. And the level of confidence that we have at this point in time is round about 85%, but it will be soon in the next couple of weeks, three weeks, 90%. Importantly, the Ivory Coast port arrivals are up 25% already versus prior year and that's really points in the direction of good supply coming our way. So I expect to have clarity on cocoa prices, call it, in the next month or couple of months. I think the situation will be much, much clear -- much more clear. Importantly, what will drive cocoa prices is the arrival in Europe, which will be most likely in January, February and I think by then we should really have a sense of cocoa cost. That is important because in our case, we haven't locked in cocoa prices yet. We want to take advantage of the potential decline of cocoa costs, albeit we want also to be protected on the upper side of cost. On the other side, on the level of elasticity, look, I think you know that it takes a little bit of time to implement price in Europe. And I think we're going to see in places like the UK where we don't have buying alliances, we are going to see the effect of elasticities much earlier and quite honestly from what we see today, they are already quite good in terms of not having a big impact. For the rest of Europe, we will have to wait towards the end of Q1 beginning of Q2. In emerging markets, as I said, we're going to price quite rapidly, but there we will protect price points in the entry level. So a long way to say cocoa cost should be clear by the end of this year beginning of Q1 and prices particularly in Europe will be much clearer towards the end of Q1 beginning of Q2.

That's very helpful. And I guess I want to just pick your brain on just the US snacking, Ken asked you about why cookies, perhaps is doing towards the high end of the snacking category, which is historically weak right now. Obviously, you're a global snacking player, and you participate in confectionery outside the US in a bigger way, but confectionery in the US is particularly weak. I'm wondering why you think confectionery in the US is so weak right now, and if there's any sort of interesting juxtapositions you could create between those two, what you see for example in developed market Europe and with chocolate and the price receptivity for example and the consumer versus what we see in the US which seems to be pretty rough right now? Thanks.

Look, it's really tough for us to comment about the chocolate market in the USA because as you know we have a small participation in that market and because there are other companies that might have a much better point of view. What we can tell you is, in Europe and in emerging markets, our brands have been built consistently over the years. In terms of distribution, support, price point, we have never pulled back a dollar since [Dirk arrived] (ph) in terms of advertising. We have been increasing consistently. Our marketing capabilities with our Chief Marketing Officer have improved dramatically. The execution is there. So I think in our case at least, we have been consistent in executing and investing and increasing distribution of our brands throughout. And look, we're lucky to have our brands maybe, but those are being built by people at Mondelez and we're very proud of that.

We'll move next to Peter Galbo with Bank of America.

Hey, guys. Good afternoon. Thanks for taking the question. Luca, I just wanted to actually circle back on your comment on ‘25 EPS, the path to difficult growth. Just for real clarity, does that also include the dilution from JDE or is that on a like-for-like basis just so we're crystal clear?

No, I was quoting like-for-like. We will issue in due time an 8-K. You might imagine by looking at the multiple of JV, Pete, even when we got 30% premium to the unaffected stock price, you might imagine that multiple is lower compared to ours. So even if we had to buy back our stock, there will be some sort of dilution, which is not something that I meant to comment upon when I was telling you that we don't see a path to EPS growth into next year.

Got it. Okay. No, that's helpful. Thank you. And just to go back to Europe, I think you were expecting a bit of pipeline fill in the quarter post the customer disruption. Just curious if you can unpack that a bit more, just did it come in where you kind of thought it would, is there an expectation of more of that just in the Q4? Any additional color would be helpful. Thanks very much.

Look, there was no much, I mean there was pipeline building particularly at the beginning of the quarter, but that was pipeline for back-to-school activities. I can tell you for instance that impact is not really material at all. Again, quite frankly in the case of the UK, we had planned to ship some Christmas already in Q3 that didn't happen, it's going to happen in Q4. So all in all, I wouldn't call the pipelining effect in Europe as material.

We'll go next to Chris Carey with Wells Fargo Securities.

Hi, good evening. So, Luca, this is a follow-up question, then I'll just ask one quick other one. But on the confidence around cocoa in the coming three, four weeks, say, relative to just your expectations for next year, can you just talk about how much flexibility you might have to respond from a productivity standpoint, say, if those expectations get worse over the next month or obviously we know if they get better, that's obviously helpful. But just as you think about the ability to manage through different variability and maybe hold to the expectations that you have for next year as you sit here today, just how much flexibility do you have to respond within your early budgets if, say, things get worse from the overhead or the productivity or the other things that you mentioned?

So, we have clear coverage strategies. I think at this point in time, we have a good part of our 2025 cocoa needs covered and/or protected. And the way you have to think about it is, we put in place futures for around about half of the needs that we have and when we put that in place, I was very clear that we covered mostly the second part of the year as the structure is inverted and so you have a benefit by going further out. The rest is covered through mostly colors and which allow us -- would allow us to really participate if the market had to adjust down, but at the same time protecting the upside exposure. So we have quite a bit of flexibility, I would say, on the -- should the market adjust. The pricing plans and there is a big part of RGM I would say, I think one-third of the pricing next year is going to be done through RGM that is maybe a little bit less flexible, but the rest provide us with some flexibility. So if we see elasticity is being more benign, we could hump up the pricing there or if for that matter we see more severe volume reaction we could lower prices a little bit more. So we have built that flexibility into the plan.

Okay, thanks. And then just one quick follow-up on a couple of regions. Latin America volume has decelerated a bit here through the year. We've been hearing that from another -- a number of your global peers just around hitting kind of tougher comps relative to last year. Can you just comment on the underlying of the business right now? And then on the China piece, you mentioned you're seeing some optimism there. Is that something you're seeing? Or is it just optimism at this point? So that's it for me. Thanks.

Yes. Well, on Latin America, I would say, overall, we still feel pretty good about Latin America. It is true that volume has started to go into negative territory, but that is driven largely by Mexico in our case. Brazil, we still see a very strong performance and also in what we call WACAM, which is largely everything else except Argentina. So it is really concentrated in one country. And there, it's largely because we have some pricing adjustments that we need to do, particularly in the candy and the chocolate categories. But for instance, gum meals and Oreo are doing quite well in Mexico. So I wouldn't feel that Latin America is particularly a major problem area for us, but it certainly has slowed down versus what it was in the previous quarters.

We will take our final question from Tom Palmer…

Sorry, I still needed to talk about China and why we see optimism. So overall, we have a very good performance in China. Businesses are doing quite well. We have mid-single-digit volume mix growth. We have high single-digit net revenue growth. So despite the economic slowdown, we feel pretty good. And I wasn't talking about our optimism. I think there is some consumer optimism because the government has released some economic boosting policy, which we are monitoring, and we think that is going to affect overall consumer thinking and consumer buying. We think our category biscuits will be stable with some big shifts in channels towards snack chains and club warehouses, which are, for instance, out of the Nielsen scope. So that is something that is on top of what you can see in the data. So we think overall driven by a strong category and the distribution gains that we have, we're probably more optimistic about China than most other companies, but we do feel an underlying trend that the consumer is getting in more positive territory.

We'll move to our final question from Tom Palmer with Citi.

Good evening and thank you. I wanted to ask first on organic sales growth. The guidance would seem to imply an acceleration in the fourth, perhaps even versus what we saw in 3Q. Could you help frame the regions in which this improvement might be most apparent? And then just to confirm, this would be volume driven? Or are there some pricing actions to consider in the fourth quarter with then more coming in 2025?

As far as pricing is concerned, at this point in time we are done and so there is no sequential additional pricing coming into effect in Q4. I think you're going to see strong performance in North America. You're going to see strong performance in AMEA, which by the way we start lapping the boycotts that started last year in Q4. And then I think in Europe, you are going to see strong results as well. Latin America, we have been a little bit more conservative, but I think there should be a little bit of an improvement there too. Look, in the end, if you do the implied growth rate for Q4 in light of us the affirming guidance on top line, which is as we said at the high end of the 3 to 5 algo, you should get to a Q4 that is a little bit higher than what Q3 has been.

Okay. Thanks for that.

Okay. I think that was the last question, Shep. Well, thank you for attending the call. Strong quarter, and we hope that we will do well in 2025 also. And I hope you got convinced that our plans are in place to make that happen. Talk to you next time. Thank you.

Thank you, everyone.