Q2 2020 Arcos Dorados Holdings Inc Earnings Call

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Good morning, and welcome to the Arco strong second-quarter 2020 earnings call a slide presentation will accompany today's webcast which will also be available in the investor section of the company's website dos Arcos Dorados.

And as a reminder, all participants will be in listen-only mode. There will be an opportunity for you to ask questions at the end of today's presentation. Today's conference call is being recorded.

At this time, I would like to turn the call over to danceline incur vice president of investor relations, please go ahead operator. Good morning everyone and thank you for joining or earnings call with me on today's call are Marcella Rabe our chief executive officer and Mariana Tannenbaum our Chief Financial Officer.

Please turn to slide.

Before we proceed I would like to make the following Safe Harbor statement today's call will contain forward-looking statements. And I refer you to the forward-looking statements section of our earnings release and rejection filings with the SEC. We assume no obligation to update or revise any forward-looking statements to reflect new or change events or circumstances.

In addition to reporting Financial results in accordance with generally accepted accounting principles. We report certain non-gaap Financial results.

Investors are encouraged to review the reconciliation of these non-gaap Financial results as compared with cap results, which can be found in the press release and unaudited financial statements filed today with the SEC form. 6-k.

Our discussion today excludes the results of the Venezuelan operation both at the Consolidated level as well. As for the Caribbean division due to the country's ongoing macroeconomic volatility for your reference. We include a full impact statement excluding Venezuela with our earnings release. I would now like to turn the call over to our CEO Marcella Bravo.

Thanks done and good morning everyone. I hope you and your families have remained healthy and safe during this very challenging time.

They will cover the discussion topics on slide free starting with highlights of our second quarter results an update on recent Trends any discussion of our strategic priorities.

As expected our second-quarter results were materially worse than the first quarter particularly due to the impact of the covid-19 pandemic on our April Fools.

But you will hear today. There are a number of reasons to be confident in the recovery and a performance of our business in the months and years to come.

The most important reason is the strength of the Ark of the system and the McDonald's brand.

The continued dedication collaboration and hard work of our entire system has been second to none.

We have come together to ensure that our guests are served the highest quality food while enjoying the best service and safest restaurant experience in Latin America. Took a Caribbean.

So before I go on let me just say thank you to all our collaborators. Let's keep up the great work.

Turning toward second quarter results on slight for our system-wide comparable sales which include all restaurants in our system for more than thirteen months whether I am open or temporarily closed. We're heavily impacted by restaurant closures in April, however, with each passing month the strength of our restaurant portfolio became evident as our comparable sales had a strong recovery throughout the quarter.

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Largest free-standing restaurant footprint and in line with McDonald's globally we focused on the three d's drive-through delivery and digital to drive improved sales and customer engagement.

The significance says Downtown in April also drove more than half of the negative ebitda result for the quarter.

We were able to quickly recover from this trend however with divisional ebitda at almost break-even in June.

In fact eight markets generated positive results in the month including Brazil and Several Hard currency cash generating markets such as Costa Rica Puerto Rico, Martinique and Panama.

I am pleased to report that this improving Trend continues and Consolidated ebitda already return to positive territory in the month of July.

We expect these recovery in profitability to accelerate through the third and fourth quarters of this year.

Let me also remind you that our cash flows have been stable since about April 20th.

I'm immensely proud of our entire team for this important accomplishment given all the challenges. We are facing during this pandemic.

We began the quarter with barely 55% of our restaurants operating at least one sales segment.

On Slide Five you can see the steady pace of re-openings that began in April and took us to 88% of our restaurants open at the end of the quarter.

Today we are operating about 91% of our total restaurant base.

The restaurants that remain closed are mostly in shopping malls that have not reopened or are not generating enough traffic for reopening to make business sense.

One important Trend to monitor going forward is the gradual return of fully open restaurants.

So June 30th only 17% of our restaurants had resumed operating all sides segments including many free-standing locations offer a walk-in service with reduced capacity.

As of this morning this figure has grown to 40%

This is good news, given the historical importance of the front counter and self ordering kiosks says segment to our business which will be key contributors to our current recovery and the long-term growth of our business as well.

Pull across Latin America and the Caribbean remain concerned with the health risks associated with covid-19.

Taquitos or Max a program we implemented shortly after the start of the pandemic successfully addressed this issue.

We're employees have expressed their appreciation for the steps. We've taken to protect them and our guests have recognized McDonald's restaurants as the safest place to eat out across the region.

I'll tell you more about this in a few minutes.

I'll turn the call over to Mariano now for the deeper dive into our sales Trends and ebitda performance in the quarter.

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Last month, we released the market update with our monthly system-wide comparable sales performance during the second quarter as well as commentary on our restaurant operations off interest groups.

The charts and slides 6 with select related total revenues by division for the quarter.

Embedded in deceivers is important Discovery in system-wide comparable sales of May and June that's similar to it. Had a high correlation to free-standing range from penetration across our markets early third-quarter sales Trends have remained encouraging as an example in our life. Just Market local-currency saves in the month of July. We're up about 15% versus June.

We were particularly pleased with this performance given we did not have the seasonal face Boost from July school holidays in the country so far in August received system-wide comparable. James are already above seventy percent of last year's limits.

Let's turn now to our second quarter costs and expenses on slide seven.

Theory the aggressive and proactive steps we took to reduce our costs and expenses were effective in minimizing the impact of the severe declining revenues related to restaurant closures and the operating restrictions

I was sophisticated supply chain operated with no interruptions since the beginning of the crisis adapting to almost daily changes in operating conditions wage and Rising food inflation in many of our largest markets.

Our student paper costs have increased only modestly as a percentage of sales since the beginning of the crisis benefiting from our routing effects hedging program Revenue management, smart couponing menu simplification and Regional operations.

Well, we will surely face and cost pressures ahead. I believe our first half results demonstrate the best-in-class capabilities of the Articles to the Superbowl.

Wildest crisis one of our top priorities has been the safety of our people. This is not limited to providing them with a safe place to work.

Our efforts to preserve jobs included participating in government support programs sharing employees with companies from other Industries and relocating employees from closed to operating restaurant among others.

That's reported payroll was down 50% in GMA was down 30% versus the prior-year quarter due to the significant sales decline in the quarterback. However, both payroll engine a expenses increased as a percentage of sales.

We have been relatively successful in limiting this affects so far and expect even better performance in the second half of 2020.

One of the year we Still project total DNA to decline by about 20% versus 2019 historically low level.

Our occupancy and other operating expenses send by 36% versus the prior-year. However this line item had the largest box in our margin performance in the quarter you to a higher incidence of fixed costs along with a few new factors.

We shifted almost all our rent agreements to variable limiting the increase in rent expense as a percentage of sales.

Aggravate your commissions increased as a result of the growth in delivery, and we incurred higher expenses related to personal protective equipment for our employees.

Also due to the depressed sales levels, we experienced importantly leveraging of restaurant fixed costs such activities insurance and Security package with you.

It impacts what person do you believe in with McDonald's to decrease our advertising and promotion spend to 4% from 5% of sales last year.

So that's the picture for the full quarter more than half of the negative. Ebitda came in April but by June we were essentially break-even at the divisional level. You have already heard. We generated positive Consolidated in July, which we expect to accelerate in the third and fourth quarter of this year off. What do you Mercedes-Benz Mariano? Let's take a closer. Look at the 3DS on slide eight.

Sales in constant currency group nearly 30% in the quarter despite declining initially in April One Restaurant closures and operating Thursday. We're at their peaks.

Almost sixty percent of the quarters total sales came from this resilient says segment.

We have improved customer satisfaction levels while reducing drive-through service times by 15% versus last year.

The more efficient operation also significantly increased the service capacity of the Region's most extensive network of drive-through restaurants offer delivery is now available in 15 of our 20 markets including Brazil all of Nolan and Oliver Platt as well as the the largest market in the Caribbean division.

chicken quarter delivery sales grew by more than one hundred and 50% in constant currency versus the prior-year accounting for 20% of sales in the.

We continue improving the customer experience by focusing on to kpis.

Delivery times which are down more than 20% since last year an order accuracy, which is an important factor to ensure customer preference.

While we have agreements with all the measure, we are testing new customer acquisition and logistical models to further develop the delivery segment.

This includes additional mobile app features company-operated delivery and e-commerce Partnerships among others.

That brings me to the digital aspect of our business.

More than 40% of the quarter sales came from our industry-leading digital platforms. This includes sales driven by our delivery segment industry-leading mobile app and self ordering kiosks as well as our growing CRM and digital marketing capabilities.

Just looking at our 40 million mobile app downloads or industry-leading number of active users does not tell the full story. We have assembled a multidisciplinary team to lead the next phase of the digital transformation of our house.

The sophistication of our digital marketing efforts for example will grow exponentially through Partnerships with Salesforce and Amazon web services.

We are improving our customer relationship management capabilities and enhancing our ability to analyze and use the massive amounts of data. We are Catherine from our guests.

We have established rules based customer segmentation allowing us to better personalize our Communications to drive traffic.

Team is currently working on more sophisticated behavioral marketing triggers that will lead to predictive personalization in the near future.

Consumers consistently rate our mobile app as the best in the industry and we are constantly adding new features such as the delivery hub.

Which has shown significant volume growth in the four short months since it was launched.

And we are now rolling out mobile order and pickup you allow customers to easily place and pay for their orders on their mobile devices Insurance off a nearly contact list takeaway experience.

Soon our dining rooms will start to generate more guests traffic.

Our 710 experience of the future restaurants will provide us with another technological platform for digital Innovation and customer engagement.

Thanks to our early commitment to digital our first-mover position in delivery and the best restaurant portfolio in Latin America and the Caribbean I speak to capture outside market share gains in the Region's restaurant industry for many years to come.

In the short term consumers remain cautious because of the pandemic on slide 9, you can see how our Mac Pro taquitos or Max Safe program addressing their concerns.

Our operating restaurants feature branded signage to communicate safety acrylic dividers to minimize physical contact and appropriate PPE to protect our employees among other enhancements to our industry Benchmark operational procedures.

We have also used our digital platform and other media to highlight the program receiving significant recognition from our our employees guests local government authorities.

McDonald's is by far the most trusted brand compared to our nearest competitors in each of our markets.

In fact, you know where most recent consumer survey. We achieved an improvement in eighteen of the twenty three indicators. We've been tracking since the beginning of the pandemic.

Turning now to our restaurant portfolio on slight then we suspended our expansion program soon after the start of the crisis.

A result. We limited our total Capital expenditures to eleven point four million dollars in the quarter.

We are currently evaluating each of the suspended development projects determine which ones to complete this year.

In addition to open a new restaurants. We have historically closed 15 to 25 or around 1% of our locations each year. Most often do to change market conditions.

In order to optimize our portfolio for a post-cold-war. We will accelerate some restaurant closings seriously plan for future years and expect close 5260 restaurants this year.

Talk to Mariano for a look at our balance sheet and cash flow Mariano.

Thanks for getting Mercedes with our financial Direction slightly 11:00 our net debt to adjusted ebitda ratio Rose 23.4 * as of June 13th, 2020 Rosemead you to the decreasing our training 12-month ebitda.

We also modestly increased our short-term borrowing and used some of our cash available during the quarter.

I suppose the case at the end of the first quarter. Our short-term lending balance was mostly drawn from local lines of credit with our relationship banks in Brazil, Argentina and Uruguay among others.

What is the decline in our trade in towards months ago. We are no longer in compliance with the leverage ratios established in our Master franchise agreement with McDonald's.

However, we have received a waiver from McDonald's through the end of 2020. We expect to review the need for a waiver extension later here when we discuss our plans for 20 21.

Received a waiver from JPMorgan for the Covenant on our twenty five million dollar committed line of credit subject to certain conditions.

We were informed that Bank of America made a centralized decision to reduce its risk in that in America at least as it relates to committed lines of credit off. Yeah for we would say that the ten million dollar balance from the committed line of credit that expired earlier this month. Unfortunately, we have always treated just completely blank as a convenient bus stop and problem formatting American companies with that said we have extensive banking relationships and not sufficient credit availability to meet our needs.

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Commit our 2023 bond is an investment-grade instrument with loaded covenants and our 2027 Bond as a 3.5 that wage the financial encourage government above the level. We are still able to borrow a basket of additional funds roughly between 240 million and four hundred million dollars without being an event of default a reminder both phones principal and interest have been swapped 50% in two thousand and are currently trading well above par close to brief endemic levels.

Customer service mentioned we successfully stabilized our cash flows around April 20th.

In addition to better safe strength, we achieved cash flow instability to several management actions first. We aggressively and proactively made our cost structure as variable as possible. Where do you think all costs and expenses significantly?

Second cash flows received additional relief from the deferral of some payments to suppliers and numbers as well as March and July royalty payments per month.

And third we would use that our investments to focus on employee and customer safety in our restaurant and the continued development of our digital Goods.

Sales have recovered our cash position has remained relatively stable while we begin to me some of those deferred obligations.

Based on current sales and profitability Trends we believe we can sustain our casual stability through the end of the year and into twenty Twenty-One when I should expect operating conditions to further normalize.

Our cash allocation priorities remain with our operating needs at the Restaurant level meeting our obligations to suppliers National and life-changing the digital transformation of Articles Lawrence.

We will also evaluate opportunities to drive additional sales and profitability for specific projects and Investments related to our restaurant before you ma'am. I know you have some closing remarks before we open the call for Q&A.

That's right Mariano as a leading company in our region for decades. We have worked to support the well-being of the planet and the communities we serve God. Let me know. It's like twelve in 2016 or Euro or recipe for the future has been aligned with McDonald's scale for good used the United Nations sustainable development goals as a guide.

We are focused.

and Five Pillars

first sustainable sourcing to Source our ingredients responsibly.

We have quadruple sustainable beef purchases in Brazil, and we are the only company in the industry using satellite monitoring to ensure farms in our home by Chain are not engaged in deforestation.

Take on climate change where we work to minimize the environmental impact of our operation.

Through the elimination of plastic straws and leads from our beverages. We reduced single-use plastic by 1300 tons in our restaurants over the last two years.

La Cocina recycling has reduced waste and help educate our guests on the importance of recycling importantly more than 90% of our packaging is certified by the forest Stewardship Council as being produced from sustainable fiber 4088 generated every day in our restaurants were more than 75% of our employees gained their first formal work experience.

Along with carefully selected strategic Partners. We are supporting the future of the Region's young people have been impacted more than 390,000 youth left alone.

Fifth commitment to families that starts with ensuring the well-being of the thousands of families who visit us every day.

The nutritional content of our menu is constantly evolving and improving to offer balanced alternatives to our guests.

I'm we continue to work with Ronald McDonald House charities in Latin America having provided support to more than 260,000 families a better time of greatest need so far off.

We have also maintain our commitment to supporting the communities where we operate by providing food to those most in need money.

So far, we have donated around five hundred tons of food and another 500,000 macombos across our markets.

I conclude with like thirteen.

We are now firmly in the recovery phase of our plan.

This means the vast majority of our restaurants are operating but guests remain concerned about the risks of infection as they prioritized safety value in choosing the restaurant experience operationally, we are focused on optimizing an Innovative across the three days to drive sales office which are also benefiting from the brand trust generated by our Mac Pro taquitos program.

the results

Far are clear and we are confident that we are the best position restaurant operator in Latin America to emerge from this situation in the industry the the strongest competitive on financial position.

We grow our market share across the entire informal eating out industry through the recovery phase and when we begin the full Revival phase of our place.

Finally, let me say again how much I appreciate all the efforts of the entire are covered system along with the support and cooperation. We've received our network of suppliers landlords and other partners. We are all in this together operator. Please open the call to questions wrong.

Of of value platforms. So we have examples like three by three Mexico in conditional as in Columbia and and all of these platforms are doing very well and we are doing that not affecting in a big way our margins. In fact our ghost Rosemary's in the second quarter, despite all the prestige we lower size. It was very strong. So I would say that uh going forward what you made mention about the capabilities, uh in our up and we'll play a huge role. We are trying to add more and more features to to our mobile app because obviously we have more than forty million people across the region with the McDonald's shop in their devices, but the true value of of this downloads is the number of people that use that app as frequently as possible.

We sold over the last quarter that we we increase the active users Gap versus our competitors, which is very encouraging for us and to pull up relevant. We introduce more and more features recently. For example, we introduced the mobile order and pick up in MLB is in in Iraq launched stage, but with this new feature a customer can use the McDonald's app it word and pay their food so that when they reach at the restaurant the order is ready and see if fast and contact list experience, which is very valuable for the customers in in these days and and this feature is already available in almost 150 restaurants in our strategic and he's doing very well and on first apostles introduced Amobi in Brazil, so a few days there but dead

With very encouraging results to and on top of that delivery Hub is doing very well and I think that the most important thing around this is having a strategic approach to Thursday digital transformation and and for that you need for example to partner with with leading companies. That's why we are very happy to to to work with sales for for example in terms of CRM and with Amazon web services in terms of data analysis, and and all related with that. Uh,

Where we are today, I would say that we are in the early stages of all these developments. We are basically working with rules based segmentation next Thursday. We are trying to to go to the next phase we see which is the behavioral marketing triggers so we can understand how customers make decisions in what time frames and then we can adjust our digital marketing accordingly. I mean to increase frequency and accept them purchasing more consistently in our restaurants and finally the end of this Rose to go to predictive personalization, uh, where we can use ugh database algorithm that can predict the probability of a customer making a purchase within a certain period so, uh, we are again at the I think beginning of this this journey, but results have been very encouraging and we are taking this very wage.

And that's why I think we are delivering the kind of results in terms of sales recuperation that we deliver in the second quarter and and the trend continues in the third quarter long as it's very encouraging and with respect to the closures. Is there a concentration in malls or food courts or more trouble geographies like Venezuela. I know I would say that I am the first part. Yes most the majority of the closures will be in less promising more based restaurant small restaurant small-volume restaurant wage, but obviously in the in the Bier Markt like Mexico Argentina or Argentina, we have a large amount but there are a few in many markets. So again, I'm taking this decision because we do not foresee in the short-to-medium term and an easy recuperation of those restaurants particularly in in malls with with low traffic wage.

Previous to the pandemic. So since the pandemic the situation became even more challenge.

And so we we will take a look to additional opportunities to use those equipment packages in in other sites in order to to capture potential new unit in the future. So that's the idea with with the closures this year.

Our next question comes from Roberta brown with Morgan Stanley, please go ahead.

Hi, good morning. Everyone. Thanks for taking my question. You mentioned that in July Consolidated was back to the positive territory including further even and also the dog has been stabilized for a few months and I just wanted to confirm how confident you are that sales are already back to levels of which you don't need some of the short short term expensive initiative that are fading like the government supports on on labor or the reality deferrals that I went and until July as you mentioned and also related. I'm just wondering some of those expense savings you you have you you might expect to carry beyond the downturn. So maybe if you can carry on with potentially lower rents after they renegotiations you had or even uh, maybe lower cost and labor as the penetration of the digital initiatives to take order for example, as I mentioned wage.

Increase thank you. Okay. Okay. Good morning, Roberto. Let me begin with the answer and then I will pass to to Mariano to talk a little bit more in detail about margins. I I would say that the main reason behind our Implement in profitability and having been a divisional will almost break-even in June and Consolidated level positive in terms of July is the recuperation we have in terms of of sales team. We've made a very good progress so far, but I think that still is too soon to claim that we are in in full Revival. There's still a lot of uncertainty in the market wage, but the good news for us is more and more restaurants already are open and those restaurants that are already open are adding more and more business segments wage.

To the operation. So from now on we think that the the recovery will be gradual. Uh, but we have a shallow dip obviously, but also we expect a slower event for now having said that I think that all the efforts all the measures the measures we we took in this three four months during the crisis to reduce our our cost structure and particularly. We were very focused in trying to convert as many of our fixed costs to variable us and we were very successful in that sense. I think uh, as you mentioned as an example with the the rents so I will pass ugh the the the girl to marry on in order to recover more in detail what we did in terms of policies and and how's our forecast going forward based on the information. We already have dead.

Thanks. How are you? Thanks for the question.

Yes regarding your first comment about cash sterilization. In fact, I can say that the cash stabilization started off most, you know half April around the 20th of April at the beginning of April. We had some Financial payments like dividend payments of around ten million dollars and change an interest payment on our 2027 Bond of around eight million dollars. After that. I would say that our net cash position did not change materially since April 20th and our cash position that in the quarter of cash burn for the entire quarter was around forty-five million dollars including these Financial expenses that I mentioned to you suck.

And after that all the efforts we have made and we mentioned already trying to convert a lot of fixed costs into into variable. For example with with rent. Uh, all the negotiations. We have been maintaining with our main suppliers in terms of food paper, but not only that in the GMA as well are the ones that are leading to the results that we are experiencing now in June and in July month coupled with that we have all the deferments that we had from McDonald's in terms of royalties for that. We already mentioned we are going to pay next year and off with other suppliers that we are starting to pay now on the second half of the year.

So regarding how sustainable are those calls decreases we expect that many of the of of the of the reductions in costs. We experienced during this quarter are going to be maintained in the future for example in in in labor in 2019. We already have the one of the lowest wage labor cost for the company ever. In fact, we experienced a very material Improvement in in Peril margin of more than two hundred basis points in the last three to four years and we expect to maintain that or even improve it in in in in twenty twenty-five or so, of course, all our efforts will be to you know, maintain all the cost reductions that we obtained and in terms of birth.

Of course, we are going to comply with our obligations when when they are due.

Okay final comment. I think that part of your your question had to be with the government programs that we receive in order to help us with them. For example, uh that that that was true. And and in fact, there are some some countries like Argentina for example that are are continuing with those kind of of initiatives in order to age support the private companies to deal with the the pandemic, uh, economic issues. And on this the slower recovery in the economy, but I would say that we were able to work in a very strong way in order to reduce costs on top of that because for example in terms of gross margin, uh, we have only 40 to 50 basic points of of the leverage and and in fact, that's that's a result of a a good cost management and yep.

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About supply chain and and all the work we did with our suppliers but in bed in those numbers is our Revenue management work the simplification the menu simplification implemented so we can't we we were able to to concentrate our sales in in products with with higher margins and and we did that uh, again a recovering our recovering our sales faster than most of our competitors. So I think that we are in a in a good position in order to to face off the the the coming months or with the full Revival phase of our plan.

Very clear damn. Well, thanks for the answers.

Our next question comes from Gary Barnes with pggm, please. Go ahead.

Thank you very much for your presentation. Just One initial question and maybe if this time after that follow up, but last call you mention, but you intended to refinance the incurred incremental short-term debt on the balance sheet with uh with a maybe a public bond in in the future if that's still an idea that is in the cards. It would make a fairly small bond from going by what has been incurred as of Thursday. No.

Okay. Thank you. Carry. I will let Maria know to to address your your question.

Yes. Hi Gary. How are you? First of all, let me let me tell you that we are very pleased with the support. We received so far from our relationship Banks from that we were able to increase short-term borrowings during the quarter as needed mostly in local currencies at very attractive interest interest rates and maturities having said that we are evaluating every alternative that is on the table including, you know, converting extending the maturity of the current bet. We are looking in to market conditions and we'll see we are going to take any opportunity that is there for the for the company as long as it's efficient in costs and maturity.

Okay, thank you. Then. Just maybe a follow-up question. Just a headline that reached my screen off with regards to an effort being made in in one of the Southern Mexicans states to curb the what is deemed unhealthy dietary habits of sort of the children there. I couldn't quite gauge whether this actually be a ban on how may calories drinks or that a attacks will be added. I don't know whether you are in a position to actually comment on what you're seeing in Mexico.

Okay, I think that what you are referring to is about processed food not not food at the restaurants. So again based on my knowledge around this issue. We are not affected by by this, but maybe if I have the opportunity to get more information in more in detail page I can share with you. But again my my understanding is that that related with processed food.

again, if you'd like to ask a question, please press * then 1

Our next question comes in an attic with JPMorgan, please. Go ahead. I have a quick question regarding store closings. Do I notice that I'm doing second Q franchise in stores declined by 75 stores while while old stores increased by seventy stores. So in that regard can we assume that our car was bought back most of those stories to help franchisees under financial distress? And also if we could see that going forward moral that going for it. Thank you, and good morning. And thanks for the question. I I do not think that that's that number is is correct. The only change in ownership we had in the system quarter was was related with with the the final thirteen restaurants that had been operated in the past by some franchises in Puerto Rico that we took control.

The second quarter but we are talking only about thirteen restaurants. So maybe there's some uh some error that number from our side because there weren't significant changes in terms of ownership. And unfortunately, our sub franchises are dealing very well very well with with the and the challenges that that we are facing. So let me take a look to those numbers that you mentioned but based on on the information I have obviously shown that there there was no significant change in terms of ownership. Actually sub-franchise is still operate around 30% of the of the month restaurants in the region and we are operating 70% and that number hasn't changed materially in the last couple of years. So let me go back to you with yep.

B y. Came up from your side, and I'm sorry for that probably my mistake. So glad to hear that everything continues to be normal. Thank you off. Thank you.

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No further questions would now like to turn the call back over to mr. Robot.

Okay. Thank you. And thank you again you all for joining our call today, and I'm for your questions my team, and I always look forward to speaking with you again in the future, and we encourage you to follow the recommendations of your government and health officials to combat the spread of covid-19 in your community. So please stay safe and have a great day everyone.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.