Q1 2020 Earnings Call

Thursday Thursday

Hello, and thank you for standing by. My name is Chuck and I'll be your conference operator today at this time. All participants are in a listen-only mode after they prepared remarks management will conduct a question-and-answer session and Conference participants will be given instructions at that time. As a reminder. This conference is being recorded at this time. I would now like to turn the call over to Makayla taphorn director of investor directions for Artisan Partners Asset Management, please go ahead.

Thank you chairman and CEO Thursday, our latest results and investor presentation are available on the investor relations section of our website following. These remarks will be opening the line for questions.

Before we begin I'd like to remind you that the comments made on today's call including responses to question me deal with forward-looking statements. These statements are subject to risks and uncertainties that are presented in their earnings release and details in our filings with the SEC. We are not required to update or revise any of these statements following the call.

In addition some of our remarks made today will include references to non-gaap financial measures. You can find reconciliations of those measures to the most comparable gaap measures in New York.

I will now turn the call over to Eric Olson.

Thank you, Makayla. And thank you everyone for joining the call or reading the transcript on our first quarter call. We usually go deep on the high value-added investing on all these calls. We focus on a long-term today though. I will mostly talked about the last several months.

Artisan Partners is designed to be a source of stability for our people our clients and our shareholders, especially in times of uncertainty and fear.

Providing stability requires that we communicate in real-time about how we are operating and our proven ability to perform through Market events and across Market Cycles dead.

I've been constantly communicating these points to our clients consultants and intermediaries and with our people we want to share the same information with our shareholders money focusing right now on the short-term does not change anything about our long-term mindset month.

Our goal remains for successful long-term outcomes who will not slip into Perpetual short-term crisis mode thinking we will remain true to who we are off to the model and philosophy outlined on this page.

turning the slight to

over twenty-five years our business philosophy and operating model have remained consistent through time and across investment franchises.

Investment teams are decentralized autonomous Channel and driven long-term oriented focused on the craft of investing. We are not a factory with large offices and life teams funneling the decentralized decision-makers or investment committees producing product to feed a distribution machine.

Consistent with our approach to Investments we have built and operating model that is highly flexible and highly mobile meet the needs of nine unique teams with nine unique operating Lifestyles and the needs of investment in distribution professionals who travel extensively our operating model has contributed significantly to our ability to operate successfully during the covid-19 crisis.

Our commitment to hiring and retaining great people has also been critical over the last three months. I have been so impressed with the ability Ingenuity and dedication wage each and every one of our Associates.

Through this recent. We have fielded a large number of questions from clients consultants and intermediaries. Let me take you through some of the most common and our answers wrong.

Are you operationally sound? Yes, we are operating well, our investment teams are taking advantage of Market dislocation and volatility.

Our Traders are executing a large volume of transactions or distribution and marketing professionals are communicating with clients and Prospects using multiple Technologies.

And our business and operation teams continued to provide high-quality tailored support.

Are you working from home and doing your part to socially distance and flatten the curve? Yes. Nearly. All of our Associates are working from home. We have supported them in whatever way necessary so they can continue to invest and perform for our clients.

Any liquidity positions to meet Redemption requests and you put money to work for clients looking to rebalance and leaned in yes. Our Traders have successfully handled large wage flows both in and out during the month of March. They traded shares valued at approximately 7.6 billion nearly three times the dollar volume executed in June of last year.

Artisan Partners is demonstrating the steadiness and consistency that are Hallmarks of the firm on this slide. The green bar is show the average trailing-twelve-month excess returns wage Artisan strategies over the last twenty-five years over time. We have grown to nine autonomous teams managing eighteen investment strategies in multiple asset classes precipitated clients around the world, as you can see, we have consistently beat benchmarks by meaningful amounts in recent periods with additional degrees of freedom across our business, including our high degree of Freedom. Third-generation strategies are alpha generation has been very strong.

our firm is designed to

Perform and add value through Market shocks and over Market Sykes we have done so and we expect to continue to do so.

Right now not only are we getting the day-to-day job done. We are also executing longer-term initiatives in the midst of the crisis the leaders of our marketing and Communications team came to me and said that now was the time to launch Artisan canvas The Firm white blog we've been developing for some time. The blog has already proven to be an ideal medium for communicating in real time with multiple constituents across geographies.

Artisan canvas is one of many Investments. We have made in digital marketing. We have been methodical in our approach doing things in a way that fits our model and culture waiting to see what works and looking for points of Leverage.

We have hired talented investment writers who are dedicated to investment teams, so they can efficiently and effectively communicate with clients and Prospects. We have a talented and long-tenured team designers and marketing professionals who package and present our stories across multiple media and more recently. We have hired people and added software to leverage our content with distributed effectively and learn from the data we receive about who's engaging with what and how

Well, this is a long-term Journey for us. We have accelerated and expanded our efforts in the last two months.

In addition to launching artist and canvas and expanding our digital marketing. We recently reached terms on several new distribution Partnerships that should provide access to New Markets and clients. We believe we have identified great long-term Partners giving us a leveraged opportunities to grow and diversify our business.

And during a time of unprecedented activity Our IT team completed the migration of our it operating environment to the cloud culminating a multi-year project and will give us greater capability flexibility efficiency and security. I applaud damn greller and his entire it team's performance.

Their efforts over many years have prepared as well for recent events, and they have executed extremely well supporting our entire firm as we migrated to working from home.

Our operating model is working well.

SE Jo will discuss our financial model is also working well.

Most importantly as you can see on slide for we have strong long-term investment performance across our business.

Our teams are established.

They were led by experienced PM's.

They were disciplined and their processes.

and

They have performed.

Today after the market draw down for the first time in many years. All of our investment strategies are open to new clients and investors.

We're seeing a lot of interest as sophisticated alligators look to rebalance and put money to work with improving and trusted investment firm.

As of April 24th, we have year-to-date net inflows of 1.3 billion with positive. Year-to-date net flows in 13 of our 18th Street.

We're seeing demand across all three generation of strategies.

3rd Generation continues to Garner the most net inflows having together raised over two billion of net info so far in 2020 our recent phone not include some sizable withdraws from clients needing liquidity to navigate the covid-19 crisis, including endowments and Hospital operating pools.

Well, the circumstances are painful for everyone these withdrawals remind us that what we do is about a lot more than beating a benchmark or making money. It's about serving a client's serving people who have saved for the future for a crisis for a purpose and who have entrusted us to manage their savings for a period of time.

eventually, they will use their Capital to do what they do to serve the people they serve it's a great honor for us to be part of that our purpose as a firm is to serve these people well,

As I did at the beginning of my remarks, I want to emphasize that this update on short-term flows does not reflect a change in our mindset or reporting plans in our region discussions with clients and Prospects has been important to provide data points supporting the strength and stability of our firm you want to share those data points with all constituents month. We have always said that flows will be Lumpy from quarter-to-quarter and year-to-year. We are not attempting to engineer flows. We value long-term relationships and we have established a long-term trusted Partnerships with sophisticated clients consultants allocators and intermediaries.

These Partners value that consistency of what we do how we operate our teams invest and how we communicate if we perform as a firm and our investment teams continue to be a long-term high value-added performance. We will have plenty of capital to manage.

We expect the vast majority of our growth will result from compounding client assets over long time periods. Not from that flows.

For twenty-five years. We have remained disciplined in our philosophy and approach.

We have remained focused on high value-added talent-driven Investments.

We have identified recruited and partnered with unique investment Leaders with them. We have built investment franchises that generate Alpha we do this over and over again.

We get stronger with time our existing teams gain experience generate performance and build trust.

Our operating platform becomes more capable and Nimble and we diversify our business across independent. Alpha sources asset classes geography and client type.

As you can see on Slide Five a portfolio of 1 million invested in each of our strategies at Inception would have grown to seven seven point six million at March thirty. First name.

It's greater than 50% more wealth than it had the same dollars been invested in the indexes. That's high value-added investing.

Looking ahead. We are well-positioned to build on our long-term relationships and degrees of freedom and become an even more trusted and capable advisor to our clients.

Each of our existing teams has investment capacity. There's a healthy supply of external investment Talent looking for a home and recent Market Avenged should drive further demand for highly differentiated, idiosyncratic judgment driven investment ideas and strategies, which has been our Focus for twenty-five years.

I will now turn it over to CJ to discuss how our financial model has performed. Thanks, Eric and good morning everyone. I hope you and your family and friends are safe and healthy. You're very quick time. We have seen the world transition from relatively stable environment to one experiencing extreme uncertainty surrounding the impact of covid-19 off when our daily lives and the global economy as Eric described in his comments in times like these we believe it's important to remain disciplined in our approach to running our business office focus on what we can control

A financial model the components of which we have highlighted on slide six was built to withstand Market volatility many of our operating expenses very directly with Revenue wage provides predictability during periods of Global Market volatility.

Take great care in our budgeting process to appropriately balanced the percentage of our expenses that are variable with those that are fixed in nature. This includes stress-testing our budgets page where we can pull back on expenses without sacrificing the quality of our services.

Financial model continues to act as intended and our business is more Diversified than ever. We've added Talent developed our third generation strategies and strengthened our distribution and operational capabilities over the last several years now have nine autonomous investment teams eighteen investment strategies spanning a range of asset classes multiple distribution channels across geographies and robust operational capabilities.

our financial

Results for the quarter are in line with our expectations given the significant declines in Global Financial markets and hire seasonal expenses, which we incur in each March quarter.

AUM one side 7 and at the quarter at 95.2 billion down 21% compared to last quarter and down 12% compared to the March quarter of 2009, primarily reflecting the sharp decline in global markets and March.

Impact of Global Market declines reduced by 23% in the quarter was offset by two hundred basis points or two point eight billion of excess returns generated by our own some teams, and we had modest net client outflows 449 million.

AUM by generation is on slide 8 during the quarter are third-generation strategies had one point 1 billion of net client cash inflows and close to $1 billion of excess returns are first-generation strategies did experience that client outflows, but Alpha generation more than offset those outflows.

Ahead of the market downturn, um reached a record high of $125 billion when February 19th and since the market lows on March 23rd, net client inflows been positive for twenty of twenty three days.

Our key financial metrics are presented on slide 9 as always I will fit Focus my comments on adjusted results, which we utilized to evaluate our business and operations wage Gap and they tell us the results are presented in our earnings release.

Financial results for the quarter compared to the prior quarter reflect lower average one less than the quarter and first quarter seasonal expenses partially offset wage higher performance fees revenues declined 3% on 2% lower average and one less stay in the quarter. Those declines were partially offset by 259 million dollars performance fees earned from a single Global opportunities client.

Operating expenses were up 2% compared to the prior quarter primarily due to five million of seasonal expenses are see offset by lower travel expense resulting from covid-19 shelter-in-place mandates.

Resulting operating income for the quarter was down 11% from the prior quarter and our operating margin was 35%

Just net income of 51.7 million and adjusted net income per adjusted share of 66 cents reached down 12% from the prior quarter.

Results to the 2019 reflect higher revenues on a higher average AUM one additional Day in 2020 and the performance fee previously mentioned above are able compensation and distribution expenses increased with revenues.

Pets is declined primarily due to higher occupancy charges in the first quarter of 2019 related to investment team really relocations.

As a result our operating more margin improved to 35% from 30.9% and adjusted net income or adjusted share increase 20%

starting to fight n our balance sheet remains healthy and we are well-positioned to absorb the recent volatility. We have experienced in the markets you maintain approximately 100 million of excess money to fund operations the new products and may continue to investments in new teams operational capabilities and technology in addition. We maintain a nun drawing a line of credit of $100 billion debt of two hundred million is supported by Apple cash flow. And even our leverage ratio is 6 times ebitda and well below the age specified in our debt Covenants.

As a result of the strength of our cash flow and balance sheet. We remain committed to our dividend policy of Distributing Approximately 80% of the cash generated by the company each quarter and the fourth a variable cash dividend our board of directors declared a cash dividend of $0.61 per share with respect to the first quarter of 2020 that represents an approximate 10% Annualized yield at recent stock price levels before considering the special annual dividend.

Now more than ever. I am appreciative our business and financial model despite. The unprecedented disruptions to people's lives and the economy as a result of covid-19 armor continues to operate and act as intended.

Of course levels remain lower so far in Q2. This will drive a commensurate decline in revenues. In addition. We expect to travel costs will be lower in future quarters long as our Associates continue to abide by shelter-in-place orders. We also anticipate modestly lower technology and fixed compensation expenses as we prioritize our most impactful projects and delay hiring plans in this difficult environment for recruiting and onboarding at this time. We do not expect any Workforce reductions or meaningful impact to our plans. We do not know how Global markets will behave over the remainder of the year, but we are confident our financial model conservative balance sheet will allow us to remain focused on delivering for our clients Associates and shareholders that concludes my comments and we look forward to your questions will now turn the call back to the operator.

Thank you. We will now begin the question-and-answer session. She asked a question. You may press one on your touchtone phone using a speaker phone. Please pick up your handset before pressing the key to withdraw your question, please press * then two at this time. We'll pause momentarily to assemble our roster.

And our first question today comes from my carrier from Bank of America, please go ahead with your question.

Good morning, and thanks for taking the questions. So you guys mentioned the strong internet flows year-to-date, which is given the backdrop I guess would be big into that Trend. Can you talk a bit more detail and a driver's since you know, I look at it. You've had two strong Alpha generation been making ongoing Investments and so from a sales standpoint. Like I said, you know some of the investment distribution and more like client relationships the opening of funds, um, or like the some clients rebalancing. Um, and then if you can give us, you know some indication on just the Redemption Trends as well.

Yeah, hi Mike. Thanks for calling in and tarek. Yeah, the the primary driver for the flows was rebalancing people take an opportunity of the drawdown. I think a big amount of those balancing was obviously from existing clients. We did pick up some new accounts during that time. But the driver was was rebalancing.

Okay, and then in the past there's you know in with some clients. It's been a little hesitation on you know, when we think about the the expenses, you know for active managers, you know what they're willing to change and you guys have you know, they just given the alpha generation that you've had, you know have been more, you know prone to kind of sticking with you know with where your expenses our office environment, you know, are you seeing you know clients more willing to pay you know for you know, not necessarily active but for those strategies that are able to generate Alpha, you know, unless you know, you're on the you know on the on the feed side.

No, Mike, I think that the same conversations occurring pre-and-post and Prien currently in the crisis that has a fiduciary. I think the public responsibility is to ask about fees and expenses and we consistently get those questions as we negotiate new relationships or even existing relationships Thursday. Kris their assets eyes, uh, inevitably there's going to be discussion around fee and fee rates. So the questions are still coming in and our answers may have been, you know, consistent free and during the current environment. So the I don't expect those to be going away.

Okay. Thanks a lot.

Our next question comes from Bill cats from Citigroup leave you have with your question. Okay. Thank you very much. I appreciate all the extra color just first questions the status on some of the new distribution job opportunities. You mentioned Eric and you're prepared marks. I was wondering if you might be able to Dimension maybe where where those are. If you don't give my name, I should understand that and may what the incremental opportunity might be.

Yes, certainly.

Um, you know over the last couple of years, we've been building out various relationships and Partnerships and off the relationships are pretty pretty widespread. I would describe a couple broaden our geographical footprint and a few parts of the world that gets us off a leveraged distribution opportunity. We're we're providing a a sub-advisory relationship and leveraging into someone else's distribution Network and professionals. We are also looking at a few opportunities that we've solidified to get us deeper into the intermediary and wealth Channel. That's I think will be the beneficial in the future here. Then we're also finishing up and completing suck.

Partnership relationships that broadens out our vehicles and how we deliver our strategies. So it's been fairly widespread during this last couple of months to take advantage of some relationships that we've been building and and we're we're we're happy to be completing those Partnerships over the last couple of weeks and expect that will be able to benefit on that in the in the coming years.

Okay, that's helpful and just just two more for me. I appreciate taking the questions. Are you in making some big wins in and out? I was wondering if you might be able to quantify some of the outs and underneath that were the application is coming from is it from fixing, is it from passive? Is it from alternative? Just trying to get a sense of you know where the flows are coming from on the end as well.

Hey Bill, it's CJ. So, you know again, I think it's it's reallocations. Some of them have come, you know, as people reallocate out of out of international and Global strategies. Um, and they've been you know, a few of them. There's obviously been more on the Wind side given the opposite way and we've given in those have been sort of broad-based in his as Eric said they've been they've been rebalances from fixed into into equities to take advantage of the current market environment wage.

Okay, and just one last one made a few CJ you had mentioned you finished off some and just sort of wondering and gave like a some some soft guidance around the outlook on some of the lines off. Is there something more structural a foot here that might give you a lot more operating leverage going forward than otherwise would have been given the case given to the push to a digital and then Thursdays are you finding so new workarounds here that could otherwise reduce the the slope of growth on expenses. Just given that we're all sort of operating under new sort of virtual backdrop. Yeah. Yeah. I know. It's a good question. I mean the, you know, the structural move is really been happening over several years as we on have as we've automated improved systems and you know, you've seen them fishy zinc deficiencies increase as we're able to um, you know process more with with fewer headcount additions dead.

and then you know, I I think on the second part of the question, it's a little too early to tell you know, our model is pretty

Clean to begin with and how actually people will adjust their their work environment coming out of this remains to be seen dead. You know, I don't think it will be anything material to our cost structure as you know, because most of our cost structure is variable compensation, which obviously won't change so I think it'll be on the margins if there is anything but we certainly will be looking looking at that as we emerge out of this. Okay. Thank you.

Our next question comes from Robert Lee from KBW, please go ahead with your question. Great. Hope everyone's doing well. Thanks for taking my questions. I guess I was wondering, you know you had a

Gross sales were you know, pretty pretty nicely in the funds business had separate accounts to as as well, but with there any of these new or recently added distribution home that are something to drive the you know, the healthy increase in gross sales that you saw in the fun in the on the retail side or the mutual fund side.

Hi Rob, it's Eric. The the comments I made in the prepared remarks around new distribution Partners office where contracts and relationships we're solidifying now. They weren't driving the current year-to-date gross flows.

I mean where there's anything that maybe you added over the past year or two. That's how you start to see that payoff or that was really pretty much just Legacy relationships.

It was a mix we did pick up a few good new institutional relationships during this this time. I was driven by people or Consultants that we've known for years that have already done the research and the due diligence. Um, and so, uh, it was a a mix of some new and a healthy amount of our existing relationships that are just putting more money to work with us.

Hey great in this maybe one other quick one. Thanks for your patience, you know the extent, you know, kind of looking ahead, you know with home in addition to the new distribution relationships. I think mainly on the institutional side talk a little bit about kind of new client activity. You know, I'm assuming that long you think it would maybe be in a slow up to some degree, but just in the environment is suffering to do due diligence or you seeing that or would you expect kind of new clients so news to show clients that activity should

I mean healthy or pickup.

on any color around that

yeah, just to provide some color around our distribution and relationship-building during the crisis. Obviously everybody in a shelter in place and working from home our myself as well. As our distribution Team all stated that our relationships got deeper with fifteen clients and Consultants as we all shared stories about our lives and either calls or ugh had a zoom call into each other's homes in those relationships got deeper and stronger. We also have been surprised at the increase in new relationships as well. And I we weren't expecting as many new relationships that came in or the ability to broaden out, but there were Club

Lee and and some of the newer strategies our ability to to add new relationships and I think the primary driver was just say commitment and effort into the institutional Channel as well as some intermediary groups that had research teams Thursday, we build relationships over the years that they had the confidence and Artisan Partners operations and the relationships we've built that is allowed us to extend off into some some newer relationship. So looking ahead. Well, I I wouldn't have said that a couple of weeks ago, you know today we we continue to still build new relationships and and push forward.

Great day, appreciate the color and everyone stay safe and stay well. Thank you.

Our next question comes from Alex Borstein from Goldman Sachs, please go ahead with your question.

Good morning. Thanks guys for taking the question. Wanted to get your thoughts on the Dynamics in the 401K Channel. I guess one to what extent dcio and former acid still comprise a a portion of Artisans that um, so maybe you can help size that and thinking about it some of the implications both with respect to unemployment and relief from for drinks with no penalty through the end of the year how meaningful of an impact do you think that could be on the flow specs?

Yeah, certainly. I was mentioned on on task calls that you know quite a bit of our outflows over the last couple of years have come out of our two main strategies that were um, you know, primarily in quite a bit of 401k opportunities those assets of gone down over the years. We've replaced those with the a healthy amount of institutional asset outside the US so it's brought down or overall DC assets to you know, approximately 12% a good chunk of those or with separate accounts and there's a you know, still a good amount that are in our mutual funds as well given the the smaller exposure the relationships that we've established in the separate account space for DC dead.

I don't feel like we'll be in.

Acted to the same degree as the you know, the the larger Target date funds where the bulk of the assets evolved over the last five six seven years. So, I feel like our exposures low and with a healthy relationship that have extended for years and that space great deals helpful color. Thank you.

Our next question comes from Chris schuttler from William Blair, please go ahead with your question.

I guess good morning, Eric. Can you talk about your discussions with this new investment talent? And is it your expectation that you could emerge from this crisis with maybe up a little bit of an increased pace of hiring.

Sure, the the new team discussions continued I'd say it would be very similar to my comments around distribution office. Um know when you meet the person for the first time and start exploring New Opportunities the relationship jumps quickly in a personal relationship because you're you're zooming right into each other's lives. So the opportunities are still out there the the means of interacting and get to knowing each other are different but I think healthy and

You know, I I I think the pipeline will continue the the rate of which artists and converts obviously is fairly slow. We have a full bar. We take uh-huh our time and we're quite patient on bringing in new teams or individuals. So I I don't think see any disruption on the pipeline of talent and I don't see an extraordinary uptick either.

We are thinking about where asset allocations going to go and how the stimulus package and the you know, the economy will change people's views on a go-forward basis on asset allocation and how much inflation will play in how much should we be looking at real life structure real estate to thinking about more tax-efficient strategies. So primarily we're using the opportunity to suck.

You know process the impact and think about the long-term effects and how we should be thinking about new teams on a go-forward basis. So we're spending more time there than we are picking up calls specifically just to meet with people.

Got it. Okay. Thank you very much.

Our next question comes from Kenneth Lee from RBC, please go ahead with your question.

All right, good morning. And thanks for taking my question just at a broader level given the firm solid track record and what you mentioned the prepared remarks potentially for a client preference for differentiated investment strategies, especially during times of Market volatility. Wondering if you could just share with us which particular strategies that you're finding are especially resonated with clients in the current environment. Thanks. Unfortunately, we also mentioned in the prepared remarks the the bracket of opportunities. We are definitely seeing the continued Trend in our third generation strategies. But as we also mentioned we've seen quite a bit of activity in the first and second generation as well. So the activity is is broad-based and we've also reopened uh,

All of our strategies so that there hasn't been one channel one client type or one specific strategies driving it and also in CJ's prepared remarks. We've talked about the uh, the the frequency as well that over the last, you know, twenty plus days. It's been fairly consistent as well. So we're we're happy of the consistency. We're happy about the breath and across from the the various teams.

Very helpful. Thanks and just one follow-up if I can any any updates on new investment strategies that that could be potentially introduced in life term. Thanks.

No, we have no no announcement to make any any new teams, you know, we're in healthy dialogue with our teams that we're always keeping in contact with groups that we would be interested in where you know, picking up some new relationships and opportunities of teams. And as I said earlier, we're thinking about what what's what categories and asset classes were think you know contemplating for for the future months, but nothing here in the short-term to announce.

Gotcha, very helpful. Thanks again.

Internet question comes from the abandoned from Jeffrey, please go ahead with your question.

Thanks to kind of a follow-up on some of the previous responses. You you guys highlighted rebalancing as a as a dynamic that's been happening. But as markets of their continued to grind higher, I guess you still see that playing out as kind of a driver of of activity or obviously the success you've been seeing as you highlighted as broad-based and across multitude of channels and off and and find so, is it is it just is it more kind of your performance and you know kind of the basics or is there still some you know client Behavior? That's that's happening as a result of you know, the the market disruption the last six eight weeks.

I think the rebalancing will continue and CJ mentioned the broad-based rebalancing of equity and and and fixed but then even in subcategories when you look at the opportunity in the high-yield space you look at the opportunity and value-based strategies and you seals still see the spread of return Beyond, you know, the bulb the equity and fixed and Beyond just the indexes if you move past the market cap-weighted index and look at the equal-weighted index and the fact that you know, we we all can see that it's been a handful of Securities driving the market and so there's still quite a bit of opportunity and rebalancing and subcategories and we're still having some broad-based discussion of you know, underneath the the major asset classes and how to take advantage into certain, you know specific strategies.

Thank you.

Once again, if you would like to ask a question, please press star and one to remove yourself from the question queue. You may press star into again that is starting at 1 if you would like to ask a question.

And at this time and showing no additional questions. I'd like to turn the conference call back over to management for any closing remarks.

I think we're all good. Thank you for attending the call today, and everybody be safe. Thank you.

Ladies and gentlemen with that one today's conference call with you. Thank you for joining today's presentation. You may now disconnect your lines.