Welcome to the Cimpress Q2 Fiscal Year 2024 Earnings follow-up call. I will introduce Meredith Burns, Vice President of Investor Relations and Sustainability..

Thank you, Michelle, and thank you everyone for joining us. With us today are Robert Keane, our Founder; Chairman and Chief Executive Officer and Sean Quinn; EVP and Chief Financial Officer. We really appreciate the time that you have dedicated to understand our results, commentary and outlook.

This live Q&A session will last about 45 minutes and will answer both pre-submitted and live questions. You could submit questions live via the questions and answers box at the bottom left of your screen. Before we start, I'll note that in this session, we will make statements about the future.

Our actual results may differ materially from these statements due to risk factors that are outlined in detail in our SEC filings and in the documents we published yesterday on our website. We also have published non-GAAP reconciliations for our financial results and outlook on our IR website. We invite you to read them.

And now I will turn things over to Sean for some brief remarks before we take questions.

Sean?.

Thanks a lot, Meredith, and thanks to everyone who's joined us today or on the recording. Before I take your questions along with Robert and Meredith, just want to highlight a few key points from the financial results and the updated outlook that we published yesterday. First of all, Cimpress delivered strong results in the second quarter.

Our consolidated revenue grew 9% on a reported basis and 6% on an organic constant currency basis. Adjusted EBITDA grew $55 million year-over-year in Q2 to $266 million and adjusted EBITDA margins were up nearly 500 basis points to 18.1% this year with gross margin expansion, leverage in advertising spend and reduced operating expenses.

That was also helped by more favorable input costs compared to last year, and there were also a few beneficial year-over-year improvements that will not repeat that we called out in the earnings document as well.

Adjusted free cash flow for the quarter increased significantly year-over-year by $96 million with the higher adjusted EBITDA, but also significantly more favorable net working capital compared to the year ago period, which was helped by the normalization of our working capital trends.

While we had growth in EBITDA across all of our segments, as you would have seen in the release, Vista experienced significant profitability expansion on strong results for its holiday peak. Vista's revenue grew 9% on an organic constant currency basis, which was better than expected.

We saw strong growth across business product categories, but we also had 7% growth in our consumer products category. We continue to benefit from the range of improvements made in recent years that we talked about extensively in our last two Investor Days. Total customer count and also gross profit per customer both grew this quarter.

So, we're continuing that multiyear trend of improved per customer value, but with growth in total customers as we did in the first quarter. I think beyond the quarter, it's worth taking a step back for just a moment and reflecting on the last year. One year ago, our trailing 12-month adjusted EBITDA was $228 million.

Now, at the end of December, it's $438 million a 92% increase in one year and that's still with material year-over-year benefits ahead next quarter from our prior cost reductions that haven't yet impacted reported results.

One year ago, our net leverage was 5.5 times trailing 12-month EBITDA as defined by our credit agreement, now it's 2.87 times nearly halved in one year. Importantly, we've achieved that while still maintaining significant organic investment.

With two quarters remaining in the fiscal year that puts us on a run rate that exceeds our prior profitability and net leverage guidance that we established for FY24, which we had already increased since we first introduced that more specific guidance one year ago.

And lastly, one year ago we had cash and marketable securities of $214 million and we had no access to our revolving credit facility. Now, we ended December with cash and marketable securities of $291 million, we have full access to our $250 million revolving credit facility.

And over that time in the last year, we also used $70 million of our capital to purchase $78 million of notional value of our high yield notes. Turning to our updated outlook for the full-year.

Our organic constant currency revenue guidance for FY24 of at least 5% is consistent with what we experienced in the first half of the year and down slightly from our prior guidance of at least 6%. We think that's appropriate to reflect the lower than expected revenue growth that we've seen in our upload and print businesses and build a sign.

Given our strong profitability and cash flow performance, we've raised our FY24 adjusted EBITDA guidance to at least $455 million and we now expect that to convert to free cash flow at approximately 45%. That compares to our prior guidance of at least $425 million and conversion to free cash flow at approximately 40%.

If you do the math of our trailing 12-month adjusted EBITDA as of December and what we've already disclosed for year-over-year cost savings that we expect in the third quarter of approximately $25 million and you back off unfavorable currency impact for the remainder of the year that we've also disclosed which is $8.5 million, that math will get you to $455 million.

And so you might ask why our guidance isn't higher after the extent of year-over-year growth we had in the first half of the year beyond those cost savings and unfavorable currency impact. The second half of the year is definitely a harder comp from a profitability perspective.

I think if you look at the quarterly profile of last year's just the segment EBITDA margins, you'll see that. There were also a few benefits in Q2 we called out in the earnings document that we won't have again.

That's not to say there's an opportunity for further growth in the second half of the year, but we've maintained this at least construct and we want to be realistic about where we set that. We're, as you know, incentivized to continue improving our business and our financial results and that's what we'll remain focused on.

Our boards also authorized share repurchases of up to $150 million which doesn't have a defined time frame set against it. Given the progress that I've just outlined, we're now in a position to have this as an option for capital allocation.

Any share repurchases in the remainder of this fiscal year will be done with the expectation of exiting FY24 with net leverage at or below approximately 3.0 times, trailing 12-month EBITDA as defined by our credit agreement.

And I would note that that's an improvement from our prior net leverage guidance that we established at the beginning of the year of exiting FY24 at or below 3.25 times.

With that, Meredith, why don't we open it up for questions?.

That's great. Thank you, Sean. Okay. So, we're going to jump in on a couple of questions about the quarter. So, Sean, I'll kick the first couple to you.

First one, which product or family of products have had the most impact on Vista's outperformance in the quarter?.

Sure. Yes, we've made a few, kind of directional comments about this quarter and the release. The revenue performance in Vista, it was strong across the Board. I'll come to the product category question, but maybe to start, the growth was pretty similar across all of our regions, the North America, Europe, Australia.

Europe was just slightly out ahead of the pack, but really a balanced growth story across regions. And then from, in terms of our incremental revenue, though, in North America, was definitely the largest, and the over performance relative to our expectations was mostly in North America as well.

In terms of product categories, all categories had double-digit bookings growth other than business cards and consumer in Q2.

Relative to our expectations, though, I would say consumer was the product category that sticks out partly because we set pretty modest expectations there because some of those products, things like holiday cards or calendars, we don't get to experience throughout the year. So, we had modest expectations. We exceeded them.

But, again, strong across many categories. I think, one might read the commentary and think consumer is what drove the quarter. But remember, Vista had 9% organic constant currency growth overall. And so mathematically, with consumer at 7%, all the other categories together were more than 9%.

And just in terms of the absolute dollars of growth, Vista had $47 million of year-over-year, incremental growth. To put that in perspective, while consumer was really important in that, it was a little more than $7 million of that growth and so there was a lot of strength elsewhere too..

Thank you, Sean.

And certainly a related question here, what drove the 7% growth in the consumer segment? And can it sustain mid to high-single-digit growth under the new model?.

There were a lot of contributors. To start, I think that the team really did a great job in the planning and in the execution. We always do a very extensive deep dive, to assess what we can do better. And that's actually something that we've already, is well underway, even for next year's holiday peak.

But the team was able to take action on the things identified, from last year, and those are things that have to get worked on throughout the year to improve the experience to add new features, add new products, evolve our go-to-market approach across our markets and so on.

So, I think the team did a really good job in all that planning and execution, and that was really over the last full year. There's also the fact that, it's not like consumer is a wholly separate business.

We define it based on product category, but these are customers that are interacting with the site and being put through the same experience improvements, the same reduced friction in our checkout, the same improvements to design help, improvements in terms of how we're using data, improvements in site search, more efficient advertising.

All the other things that we've been talking about, that are actually a big part of why the other product categories had the strength I just mentioned too. I think the consumer categories also benefited from the fact that, we've had healthier new customer acquisition cohorts, in the last quarters.

And there are many hybrid customers in there that are purchasing across categories. They tend to be some of the most valuable customers in our customer file. So those are some of the things that impacted the revenue performance.

As we noted in the release, it was the first time that we had year-over-year consumer products growth since we started the transformation journey in Vista in 2019. And you may recall back then we pretty significantly reduced discounting and advertising.

And that was, that had a big impact on consumer, because there were some things that we were doing in the consumer category that were destroying capital or not producing sufficient returns so we made some big changes there. So, it's great to see that back to growth and doing what it's doing. But it actually goes beyond just revenue.

And so maybe just highlight a few other things. In our production facilities, we also had really good execution. Just as an example of that, last year, In Europe, there were labor supply challenges in the holiday ramp, which increased cost.

Team did a really nice job this year, changing how we approach workforce management, driving a lot of efficiency versus last year from a labor perspective and doing all that while maintaining a high on time delivery to customers.

In our customer care, those teams, another area where we've made continuous improvement throughout the last year, but the team has really been focused on removing friction for customers, improving training for our team members, improving visibility of help on placement on the site.

And we've been able to reduce contacts as well because we've improved the site experience, but also we've improved these elements of how our care teams interact with customers. And so, all of that has led to about 100 basis points of savings just in our customer care versus last year.

So, I mentioned those because it's not just revenue, it really is across the Board it was a strong performance. There's a lot that's gone into that, and hopefully, that's been a theme you pick up over the last quarters, which is, it's a lot of little things an improved execution and focus that ultimately has driven the results..

That's great. Thank you, Sean. All right. I'm going to move over to Robert for, one of our pre-submitted questions.

So, Robert, what is ailing upload and print other than the tough year-over-year comps in the half of the year? What are you doing to fix it? And how should we think about it, about the sustainable growth in that segment?.

Okay. Well, thanks for the question. First of all, let me say hello to everyone and like Meredith and Sean, welcome you to the call. To answer the question, I will start by saying we see these businesses, the upload and print businesses, as healthy, not as ailing.

We also are asking how we can continue their success and make them even stronger, which is an important question, but it's not a question of what we need to fix. So, of course, and I will come to this in a moment, we explained in our release that revenue growth was below our plan, but that doesn't change the overall picture.

And let me explain that by starting with the success in driving up upload and print EBITDA and cash flow. As we've done across Cimpress, we are focusing on driving bottom line expansion to one show the underlying power of what we have as a business, but also to help with the corporate level delevering.

And upload and print just expanded profitability, EBITDA, 41% year-over-year. And we have strong bottom line prospects looking forward.

Specifically, if you look at the upload and print on the trailing 12-month basis, that's over $150 million which is driving again increased cash flow and cumulatively we've generated cash flow from this group that exceeds the capital we ever invested in them.

And of course, there's value in the business today going forward to the returns have been already attractive and we're confident that those returns will continue to grow. So again, we see these healthy businesses.

Now as to revenue, yes, it was lower than I expected, but it was in part due to making sure we drive the bottom-line, but also there were and you mentioned this in your question, high growth rates last year, we had a lap.

But beyond that, I think there's two very important trends, which we have spoken about in the past, which is important to keep in mind, which are constraining near-term revenue, but which are good for Cimpress' upload and print our revenue outlook over the longer term.

We are the undisputed European leader in selling direct to end customers through upload and print style, e-commerce printing, these are small orders traditionally relative to the commercial printing industry. And the industry continues to shift overall print, not just online towards smaller orders and we see that as playing to Cimpress' strength.

And as those orders get smaller, it gets harder and harder for traditional printers to play in that. Secondly, we do see we have headwinds from resellers.

Resellers are typically professional graphic, our graphic design professionals or local printers or the like who have traditionally been how and even today are how the majority of the Print industry transacts businesses.

And especially in print group, but across our blood and print, we have a pretty material business selling to those resellers who in turn say to the end customer. But with the passage of time, those resellers are kind of systematically getting this intermediated and in large part by Cimpress' upload and print group as a leader in this space.

So there's a channel shift there. But if you step back, that excluding that high concentration of reseller revenue, it is an overall positive picture. And we look to upload and print and the teams there is being, they are very innovative. They're very focused on being low cost producers.

They have incredible supply chains and production capabilities, they serve customers incredibly well. And you can see in cohort value, especially defined as cash flow not revenues, you see these strong trends occurring. So they're going to keep doing what they're doing.

There's a lot of good things happening there and we don't see this as a sign that the multiyear strength we've had in upload and print is anywhere near the end..

Great. Thank you, Robert. I'm going to shift to Sean for a technical question.

So Sean, what accounted for the big share based compensation jump in the second quarter and is that an appropriate run rate?.

Sure. Yes. Always good to have a couple of technical questions in here. The grants that we made this year were a combination of instruments, performance share units or PSUs and also RSUs.

In terms of why the increase in share-based compensation expense, the total grant value for all of our annual grants we do is a little bit higher than last year, but there's really two things that drove the, the higher expense in Q2.

The first one is that for the PSUs and in terms of Robert, myself, other executive officers have all of our long-term incentives and PSUs. So, it's a large part of the overall share based compensation for this year. The way that those are required to be accounted for is on an accelerated basis.

And so what ends up happening to spare you the details is that about 50% of the expense gets taken in year one. And that compares to like if there's an RSU with a four-year vesting period, about 25% of the expense we get taken in year one. So, you do get just in terms of how it's accounted for higher cost in year one than our pass profile.

The second one is that the PSUs and the expense that we take for PSUs is variable depending on our attainment against the performance conditions. Those performance conditions are based on our revenue, EBITDA and our number of cash flow for this year.

And we've updated those estimates of attainment percentages based on our results, which we're strong and so that attainment percentage is a bit higher. And so that also played a role.

You'll see in our non-GAAP reconciliations, we actually walked this and so we increased our full-year expectation for share based compensation expense from $60 million to $65 million for FY24. Again, just remember that some of that is driven by this feature of accelerated expensing for the PSUs with 50% of that cost in year one.

As to, I think the question also asked that that's a good reflection of the run rate. I think it really depends on sort of the intermediate use. [Technical Difficulty], I think that's a fair run rate. We're continuing with PSUs year long on an accelerated basis, so that'll kind of more and more be layered into the expense profile..

Great. Thanks so much, Sean. Okay. This next question is for Robert.

Robert, can you update us on customer experience enhancements in Vista that are driving improvements customer satisfaction, new customer acquisition cohorts, and customer lifetime value?.

Sure. Let me tell you first of all, the main point about these customer experience improvements is that we are increasing the cadence and the velocity of continuous improvements of many small things, not relying on step function changes, and that's very powerful. But there are too many to cover all of these.

I will give you some very specific examples, but there's a lot of them. Sean also covered this to some extent in his response to the consumer question earlier, and I'll come to that. Now you mentioned specifically acquisition cohorts and customer lifetime value and customer satisfaction.

I think that in terms of cohorts, we have, there's two major factors. How much value is there per customer, the LTV, and how many customers? And the improvements we've been making for the last 5 years have consistently driven up the value per customer.

I think a lot of what's happening is we are continuing that trend with consumer customer facing experience improvements.

But very importantly, the second factor, the number of new customers are now starting to get traction and it's certainly an important part, our customer experience is certainly an important part of that, but it also has a lot of great work in the marketing teams and others to find ways to drive that.

So, in terms of some examples, I think you really have to look back for the last 4 or 5 years and see we started with some very large brute force changes, moving our discount level is down dramatically. We still discount, but much less certain in the past.

Change in how we advertise, change in how we talk about our business and our, the customer value we deliver. We spent more than 3 years migrating the technology stack, and only finished that up 18 months ago. We invested in talent in a lot of different areas. We didn't do all that right, but we made a lot of good decisions.

And we are now seeing 18 months after the tech migration, about 15 months after committing to move to what are known as empowered product teams.

We're seeing that a lot of those things are starting to click, the teams are able to be more focused on improvements rather than these big shifts, and that it comes down to things that matter to our customers. So as two examples, I could start with site search. It could be, that's much better than it has been in the past.

We think we can make it better. Mobile first design flows are reducing the friction of checkout, improving the layout of the homepage or some of the core merchandising pages to improve findability. The pace of new product introduction is coming up dramatically from where it was a year ago.

It's still not where we think it can be and it's not at the pace we see in our upload and print businesses, but it's improving. We've improved design service offerings and started to integrate those more deeply in the experience. We've taken learnings from VistaCreate and we're bringing those into the core of VistaPrint experience.

We're acquiring, as I mentioned, more customers that it certainly comes from great marketing improvement, but also very importantly improved conversion rates, because of the site improvements. And so finally, we've done a lot of work on product quality and on time to customer and customer service improvements, which has multiple effects.

One is, it improves our retention rates, which has huge value of the cohorts. And two, it's driven down our credit rate. We still have a very customer centric approach to credit, but as we make fewer mistakes, we will make we issue fewer credits and that's healthy.

So I'll stop there, but really I would summarize by saying there's no one silver bullet, which has changed things, we see this as an overall acceleration of the velocity, the faster cadence of new product or new customer facing improvements, and we think that will continue..

It's just really exciting to see that inside the Company as well and just, like, adding my own editorial comments here. Let's move to the next question, Robert, I'm going to stick with you.

How far along are you in the process of integrating more robust design services into the Vista customer experience? Can you give us a progress update on VistaCreate in terms of user growth and other key metrics that you're tracking?.

Great. So there are a couple of questions there. There's design services overall, and there's VistaCreate specifically. So Florian in our most recent Investor Day spoke about exposing design services from the 99designs community to VistaPrint customers. We have taken a slow approach there, it's taken longer than I would have originally expected.

I think any of us would have. But again, a lot of that was related to a need to fix some of the other things I just talked about in terms of tech migrations, new product team structures and so on.

But we are seeing the benefits when by making that smoother for customers who need design help get it and we're going to continue to test and learn and incorporate improvements into the experience.

And importantly, we are now working to say how can we make sure the flow between, if you think of a spectrum from getting customer service to getting customer service based help to getting a professional to help you, making sure that that's a smooth transition back and forth, for customers who at different points in their customer journey need different types of service.

With ultimate design overall, more pervasive through the customer experience, how design agents. We know the design customer service agents and we know that designers from the 99designs network have much higher LTV.

So, making incremental improvements has helped the, I would put that in the category of what I spoke about for the prior question, it's an example of improving satisfaction, conversion, revenue, profitability.

If you go into the site, you'll see a lot more offers for design help for custom or bespoke design support on the homepage, in the studio, in chat boxes that pop-up and on pages for more complex products.

We also have the team is driving mobile offerings with a range of design options and experiences, which is very much related to 99designs and work that we've done since we've acquired 99designs.

We are incorporating the VistaCreate capabilities into the VistaDesign studio within Vista Print that is taking time because of the architectural underlying components. But we are on a trajectory of making incremental studio experiences to make it better for our customers.

And you can see some of this, for instance, the logo maker where you download the finished logo and a brand kit, that's now available in Vista Create as well.

And so finally, I'd say, we see how we move forward with the VistaCreate and 99designs acquisitions less of building them or not as building with standalone businesses, but rather exposing the services and capabilities in using the talent we acquired with that to improve the VistaPrint experience overall, where the real value is for customers because of the size of Vista Print and for shareholders because of the size of the revenues and cash flows out of Vista Print..

Thank you, Robert. Okay. I'm going to stick with you for one more question before I let you off the hook.

Robert, how is customer adoption of the Vista x Wix digital offering progressing?.

First of all, we have a 100% completed migration off of our legacy website builder product to the Wix website builder. We finished that up in the first quarter. And it is just a much better customer experience full stop, and we're happy with that. We also see the value per customer is materially better, our value per customer in terms of cash flows.

Progress has been good.

It's still a situation where most of our focus is continuing to optimize how we integrate what is a third-party holding controlled product experience, the Wix experience, which we really see is great for customers and make sure it integrates into our site well and making sure the funnel that drives customers there is working, removing friction for customers.

Now that the bulk of the effort, which was getting all of the legacy site builder customers migrated to Wix is over, we can focus more on those things. Digital bookings grew year-over-year in Q2, just we finished up, they also did in Q1, and we expect digital revenues to grow, again, on a full year basis. And as we move forward.

We think we're seeing an uptick in customers, but again an uptick, material uptick in the lifetime value of each customer. So in summary, we are happy with where the Vista x Wix digital offering is. We have a lot of opportunity in front of us, but it's going in the right direction..

Thanks Robert. Sean, I'm going to ask you a question now, And that is, what is the implied growth for Vista in the second half of the year in the 7% revenue guide. So 7% reported guide or 5% organic constant currency guide..

Yes. We haven't given revenue guidance at a segment level for the remainder of the year. So maybe just a few things to cloud. The comps in H2, as you can see, are different depending on the segment and when price changes were happening last year.

I think that, I think you can assume that the Vista expectations in the second half of the year are close to the consolidated organic constant currency guidance that we gave of at least 5%. Probably won't get more specific.

And that as for, the reported revenue growth, in general, there's going to be less based on the current rates, we expect less currency impact in the second half of the year. And so right now for Vista, I would expect that the reported growth and the organic constant currency growth would be quite close together..

Great. Thank you. Another one for you, Sean. As you mentioned, Input prices are lowering and revenue per customer is increasing.

What's the response from customers to price increases? And how are you able to lower prices to attract upload and print?.

On the, from a price perspective, we there hasn't really been much change over the last quarter, in our direct increase, decrease. As I said last quarter, we find ourselves now in more kind of optimization mode. So I don't expect any step function changes, upward or downward based on, what we see today.

It's more back into the continuous optimization, testing based on price elasticity, and so on. So that's the mode that we're, that we've been in. I think one of the things to consider is that the pace of input cost increases in part of our business and take paper costs, for example, was extremely high.

And so we weren't just passing that all on, and there were parts of that business where we were having to absorb a piece of that. In paper costs, for example, and some regions go up 50% or more, that's not something that you can just the next day pass on.

And so I think that over time, as input costs have settled in, combined with the pricing steps that we did take over the last 18 months or so. We're at an equilibrium that right now feels like that's okay. And again, we'll continue to optimize within that.

In terms of, are you able to lower prices to attract upload and print? We haven't seen the need to do so. Again, we'll continue to test and optimize. But orders are still growth, and so it's in upload and print, it's really the things that Robert talked about earlier in terms of some of the headwinds there for growth.

So I don't expect big changes in the near-term. And also, we did not make big changes, over the last quarter, not only in upload and print, but elsewhere too..

Next one, I'm going to ask Robert.

Have you done the math on what upload and print's growth rate was in the quarter excluding the reseller channel?.

Yes. We've done the math. We don't disclose that publicly, one, because every business in the world, has overall results and profits to contain a mix of different growth rates of different segments, but also for competitive reasons. But I can give you a little bit of context here.

Now remember that our Upload and Print businesses, every single one of them have reseller business. But Exa and TradePrint, which are part of the Print Group, traditionally were a 100% reseller. And they are shifting away, but they really started with a 100% reseller.

Whereas WIRmachenDRUCK, Printi and Pixartprinting, well, the first three of those, excluding Pixartprinting are part of PrintBrothers. Pixartprinting is part of the Print Group, also has resellers, but a much it's a minority of their business.

So, we see the most headwinds in the Print Group because of the traditional focus of two other businesses on resellers. Now a good number to look at is PrintBrothers, where again we do have reseller businesses, which are reseller customers that are material, not majority. Yes, PrintBrothers is still growing at about 5% a year.

So again, there's a mix within that of resellers and direct.

I think, I'd come back to the main point that if you think out 10 years from now, where is the world going? The world is going more and more to direct relationships across the Internet with end customers and, the ability to sell directly from our factory floors out to those customers without going through intermediary is long-term good for the economics of Cimpress..

Thanks, Robert. All right. Another question here for Sean. Capital allocation question.

Sean, any, plans to buy back more bonds?.

No specific plans. As we said in the, in our release last night, we've obviously, we've been a buyer of our bonds over the last three quarters. We'll continue to consider using excess liquidity to repurchase our debt. That's not exclusive to the bonds could be any of our debt. And, but, yeah, no specific plans.

But as you can see, it's something that we'll regularly look at and we have been looking at. And, yes, we'll see where things go..

Fantastic. All right. So with that, we have come to the end of the set of questions. There was another question that came on, about the holiday season. I think, the asker maybe came on to the call a little bit late because we did cover the holiday season in quite a bit of detail at the beginning of the call.

So, I can write to, that person after the call. And you can always listen to the trans or re-listen to the replay or read the transcript to catch our answer on that one. So, I'm just going to turn things over to Robert to wrap things up..

Well, thank you to all of you for joining the call and for continuing to entrust us with your capital. We are really happy to be ahead of our plans for the bottom line profit and cash flow, and by reducing our net leverage. We have, I think a lot of options in front of us.

But very importantly, and Sean said this before and we said this in the release, we are happy to do so while continuing to invest in key areas for the future.

And so we think that success it is a combination of different factors, but, you know, stepping way back, being able to focus on execution after a series of changes that started with the Vista Print transformation five years ago that went through the pandemic, which went through a lot of fundamental changes of how we run the business.

But we are seeing the benefits of that focus. We look forward to continuing to build the momentum from here and we think we're on the right track to improved our intrinsic value per share for a long time to come. Thank you again..

Ladies and gentlemen, this concludes today's conference. Thank you for your participation. Have a great day and you may now disconnect..