Q2 2021 Timken Co Earnings Call
Good morning, My name of Ana and I will be your conference operator today as a reminder of this call is being recorded.
At this time and we'd like to welcome everyone to the Timken and second quarter earnings release Conference call. All lines have been placed on mute to prevent any background noise.
After the Speakers' remarks, there will be a question and answer session.
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Mr. <unk> you may begin your conference.
Thanks, Anna and welcome everyone to our second quarter 2021 earnings Conference call. This is Neil for own Apple director of Investor Relations for the Timken Company. We appreciate you joining us today.
Before we begin our remarks. This morning, I want to point out that we have posted presentation materials on the company's website that we will reference as part of today's review of the quarterly results. You can also access this material through the download feature on the earnings call webcast link.
With me today are the Timken company's president and CEO rich Kyle.
And Phil for Casa our Chief Financial Officer.
We will have opening comments this morning, and from both rich and Phil before we open up the call for your questions.
During the Q&A I would ask that you. Please limit your questions to 1 question and 1 follow up at a time to allow everyone the chance to participate.
During today's call you may hear of forward looking statements related to our future financial results plans and business operations. Our actual results may differ materially from those projected or implied due to a variety of factors, which we describe in greater detail in today's press release, and our reports filed with the S E C which are available.
On the Timken Dotcom website.
We have included reconciliations between non-GAAP financial information and its GAAP equivalent and the press release and the presentation materials.
Today's call is copyrighted by the Timken company and without expressed written consent, we prohibit any use recording or transmission of any portion of the call.
With that I would like to thank you for interest and the Timken company and I will now turn the call over to rich.
Thanks, Neil Good morning, everyone and thank you for joining timken second quarter earnings call.
Timken delivered a very strong second quarter with record revenue of $1.060 billion.
Record second quarter earnings per share of $1.37.
Solid EBITDA margins of 18, 8 per cent and free cash flow of $116 million.
We went into the second quarter optimistic about demand, but expecting the challenging operating environment.
And both played out through the quarter.
Demand continued to be greater than the ability of supply across many of our markets with our backlog growing significantly and the quarter. Despite the record revenue levels.
The 2 areas that came in weaker than expected for India and on highway vehicles.
India due to the pandemic and government shutdowns and that country and.
The vehicles do the chip shortages.
India recovered by the end of the quarter customer demand has returned to strong levels and all of our facilities are operating fully.
We expect sequential improvement from India, and the second half.
The global Chip shortage had a significant impact on Q2 for automotive and truck revenue and will continue to impact our revenue through at least the third quarter.
And a positive note. This is setting us up for a very strong 22, and auto and truck as vehicle sales remained strong and.
Inventories will need to be replenished.
Beyond those 2 areas of demand was very strong across most markets, including renewable energy, where we were up again double digits on a tough comp.
We continue to ramp up supply and despite the global supply issues, we grew revenue 4% for the first quarter.
Orders were generally stronger than shipments and demand for the current quarter remains very strong.
And regards to the operating environment and the second quarter continued to be very challenging as we served increasing customer demand and the rising cost environment with widespread supply chain challenges.
And in addition to the headwinds from India, and the chip shortage logistics labor inflation impacted the results for the quarter.
We continued to face significant logistics delays and getting material to our operations and product to our customers.
The situation and the second quarter was similar to that of the first and we expect the logistics delays higher cost and higher inventory to continue at a similar level through at least the third quarter.
And regards to labor the third quarter is the first time and over a year that we are not facing any abnormally high apps and T levels and any of our global operations.
We expect that the hold for the rest of the year, which will provide a nice lift and the second half.
However, we are extremely tight and competitive labor market and we are not immune to that.
And the vast majority of the locations, where we operate timken is the preferred employer retention is excellent and we are normally and able to attract new employees in a timely and efficient manner.
Our retention remains excellent, but attraction of new employees and many parts of the world, including here in the United States has become a significant challenge.
We continue to make progress monthly and we entered the third quarter and higher staffing and production levels than we were to start the second quarter.
We expect labor markets to remain tight through the rest of the year and into 'twenty 2 but we also expect to make steady progress and ramping up our operations.
In total the supply chain and ramp issues remain abnormally high but they did improve through the quarter and are better today than they were 3 months ago.
We expect them to be a headwind and the rest of the year, but less of 1 and the second half and the first half.
Yeah.
Inflation was also an impact and the quarter of steel and other input costs continued to increase.
We do not expect inflation to improve and the second half, but inflation and total remains manageable and less of an issue and magnitude and the supply chain and ramp costs.
Overall inflation has been increasing sequentially and we expect that the continued through the end of the year.
Price and proved very modestly from the first quarter of the second mostly due to pricing mechanisms that we have and OEM contracts the pass through raw material cost increases.
And the second half, we expect price to be a more significant offset the cost than the first half.
This is due to both of the continued catch up of the pass through mechanisms as well as price increases currently being implemented.
Our previous guide was for flattish pricing.
And we now expect price to be 50 to 100 basis points favorable and the second half.
Despite the supply and cost challenges, we took care of our customers grew revenue, 32% over last year 4 per cent from the first quarter and delivered just shy of the 19% EBITDA margins excellent.
Excellent results and a very dynamic environment and 1 that continues to demonstrate the resiliency and strength of our business.
Okay.
We also continue to invest in and advance our strategic initiatives.
The Aurora acquisition is off to a great start and the combination of of growing the Becker is progressing well.
We will consolidate 2 more ERP systems to our global digital platform this year.
We continue to optimize our global manufacturing footprint, our new bearing plant in Mexico will be ramping up and the second half of the year, We just announced the closure of the small bearing plant in Italy, we completed the relocation and consolidation of our solar operations and the second quarter.
And of our wind investments are advancing.
We're also pursuing new business opportunities and winning with our differentiated portfolio.
Let me shift to the outlook.
Our normal seasonality is a modest step down in revenue and earnings from first half the second half with a significant percentage of our cash generated and the second half.
We are expecting our seasonality to be more moderate this year and we were planning for a strong second half.
We expect demand remained strong and second half sales to be in line with the first half.
We expect supply chain issues and the associated cost persist and the second half but to be worse than the first half.
Inflation to be modestly higher and the second half and the first half.
The pricing to be higher and the second half.
We expect cash flow to be good, but less and prior forecast due to the persistence of the supply chain challenges as well as working capital to support higher revenue levels.
And while it's a little early to talk about 'twenty..2 we are planning for the industrial expansion to continue at strong levels in the next year.
Many of the macros are favorable including supply shortages and low channel inventories tight labor markets commodity prices and the possibility of infrastructure spend.
It's not clear how much of the current inflationary environment is temporary versus permanent but we are confident the timken will perform well if inflation persists in the 22.
And finally from a capital allocation standpoint, we're expecting good cash flow for the rest of the year and we will be of protein the low end of our target leverage range. We.
We do not plan to dip below the low end of our range and capital allocation will be accretive in 2020.2.
We continue to have a bias for M&A over buybacks.
In summary, timken is in position to deliver record performance again this year and we expect the move into 2020.2 with significant momentum on the.
And I'll turn it over to Phil.
Okay. Thanks, Rich and good morning, everyone for the financial review I'm going to start on slide 10 of the materials with the summary of our strong second quarter results.
Revenue was a record 1 point of those 6 billion and the second quarter up 32% from last year and up 6% from the second quarter of 2019.
We delivered an adjusted EBITDA margin of 18, 8% and adjusted earnings per share of $1.37.
Which was up 34% from the prior year.
The strong performance anyway, you look at it.
Turning to slide 11, let's take a closer look at our sales performance.
Organically sales were up 26, 5%.
Both segments posted strong double digit sales increases with mobile industries, leading the way.
Currency added almost 5 per cent of the topline in the quarter, while the Aurora bearing contributed close to 1 per cent.
Total sales increased nearly 4% sequentially from the first quarter, even though on highway auto and truck demand was negatively impacted by semiconductor chip shortages.
And the right hand side of the slide we show year on year organic growth by region, so excluding both currency and acquisitions.
All regions were up strongly and broadly in the quarter, Let me comment further on each region.
And Asia sales were up 25 per cent as we saw broad growth across most sectors and the region with renewable energy of highway distribution rail and heavy truck posting the strongest gains and.
And Latin America, we more than doubled sales versus last year and the significant growth was led by the distribution and on highway auto and truck sectors.
And Europe, we were up 27% driven by growth across most sectors. There as well led by the off highway on highway auto and truck and distribution.
And finally, and North America, our largest region, we were up 20% and the quarter.
Driven mainly by strong gains and the off highway on highway auto and truck distribution and general industrial sectors, partially offset by lower aerospace revenue.
Turning to slide 12, adjusted EBITDA was 200 million or 18.8 per cent of sales in the second quarter compared to $164 million or 24 per cent of sales last year.
Keep in mind that our incremental margin and year on year margin comparison.
We're impacted by the significant amount of temporary cost actions, we took last year and response to the pandemic.
If we exclude those temporary actions from the analysis incremental margins would have been nearly 30% and the quarter with adjusted EBITDA margin expansion of over 300 basis points.
Looking at the change and adjusted EBITDA dollars the increase compared to the prior year reflects the benefits of higher volume and related manufacturing performance, which more than offset higher SG&A expense and material and logistics costs as well as unfavorable mix.
And the unfavorable mix was driven mainly by the significant growth and OEM sales, mainly within mobile industries during the quarter.
Currency had a positive impact on EBITDA and this past quarter and Aurora bearing added nearly 2 million with adjusted EBITDA margins of roughly 20%.
That acquisition is performing extremely well for us right now and Theres more to come.
Let me comment a little further on our manufacturing and operating expense performance.
On the manufacturing line, we benefited from higher production volume versus last year, which enabled us to more than offset cost pressures related to supply chain inefficiencies and continue and continued production ramp ups as well as the non recurrence of temporary cost actions from last year.
Overall, our teams navigated the challenging supply chain situation, very well and delivered solid customer service in the quarter.
Moving to material and logistics as expected, we saw higher costs in the quarter compared to last year.
Logistics was the bigger headwind of the 2.
With much of that volume related.
And finally on the SG&A line the.
Higher expense was driven almost entirely by the significant amount of temporary cost actions taken the last year.
Excluding those actions SG&A expense would've been relatively flat year on year, and that's despite higher incentive compensation expense and the current period.
On slide 13, and you'll see that we posted net income of $105 million or $1.36 per diluted share for the quarter on a GAAP basis.
This includes the penny of net charges from special items.
And on adjusted basis, we earned $1.37 per share up 34 per cent from last year and a company record for the second quarter.
Our adjusted tax rate was 24, and a half per cent in the quarter, which brings our year to date right the 25%.
This reflects our geographic mix of earnings and other tax benefits compared to the year ago period.
We expect the tax rate the remained around 25 per cent for the rest of the year.
Next let's take a look at our business segment results starting with process industries on slide 14.
For the second quarter process industries sales were $569 million up 23% from last year.
Organically sales were up 17%.
With the distribution and renewable energy and general industrial sectors, posting the strongest gains.
Heavy industries and Marine were also up in the quarter, while services revenue was down.
The favorable impact of currency translation added almost 6% of the topline in the quarter, while the Aurora bearing acquisition added nearly 1%.
Process industries, adjusted EBITDA, and the second quarter was $142 million or 25 per cent of the sales comp.
Compared to $129 million or 27, 9% of sales last year.
The increase and adjusted EBITDA dollars versus the last year reflects the benefits of higher volume and currency, partially offset by higher SG&A expense and material and logistics costs.
Now, let's move to mobile industries on slide 15.
And the second quarter mobile industries sales were $494 million up about 44 per cent from last year.
Organically sales increased over 39% with.
With the off highway automotive and heavy truck sectors, posting the strongest gains.
Rail was also up in the quarter, while aerospace revenue was down.
Currency translation and added about 3 and a half per cent of the topline in the quarter, while the Aurora bearing added over 1%.
Mobile industries adjusted EBITDA for the second quarter was 69 million for 13, 9% of sales.
Compared to $42 million were $12.3 per cent of sales last year with margins up 160 basis points year on year.
The increase and adjusted EBITDA versus last year reflects the benefits of higher volume and related manufacturing performance all of <unk>.
Net partially by higher material and logistics costs, and SG&A expense as well as unfavorable mix.
Turning to slide 16, you'll see we generated operating cash flow of $147 million and the second quarter.
And after Capex free cash flow was 116 million and the period.
This represents over 100 per 100% conversion on adjusted net income.
Note that the decline and free cash flow from last year was expected and reflects the impact of higher working capital. This year to support our sales growth as well as higher cash taxes, and capex, which more than offset the impact of higher pre tax earnings.
From a capital allocation standpoint, timken raised its quarterly dividend by 3% to 30 cents per share and paid 396th consecutive quarterly dividend in the month of June.
Which marks 99 straight years and counting.
Taking a closer look at our capital structure, we ended the quarter with a strong balance sheet and ample liquidity.
Our leverage as measured by net debt to adjusted EBITDA was 1.7 times at June 30th and improvement from 1.9 times at the end of March.
This puts us in great position to continue to drive our growth and capital allocation strategies, including M&A and share repurchases and the second half of the year.
Now, let's turn to the outlook on slide 17.
We now expect sales to be up around 19% in total at the midpoint of our guidance versus 2020.
Which is up slightly from our prior outlook, mostly due to currency translation.
Organically, we're planning for sales to be up around 15% of at the midpoint essentially unchanged from our prior outlook.
We expect we expect both segments to be up double digits organically with high teens growth and mobile industries, and low teens growth and process industries.
The strong revenue outlook reflects our expectations for continued strong market conditions, which is supported by our growing backlog.
On the bottom line, we expect adjusted earnings per share and the range of $5.15.
The $5.45 per share.
Which is in line with our prior outlook.
We're keeping of 30 cent range, reflecting the wider than normal range of possibilities and the current environment.
At the midpoint of our current outlook represents roughly 29 per cent earnings growth versus last year.
The mid point of the midpoint of our outlook also implies the consolidated adjusted EBITDA margins will be roughly flat with 2020.
As Richard mentioned, we're implementing price increases to mitigate the impact of higher operating costs.
We expect the step up and pricing and the second half, which will carry over to 2020.2.
Note that our outlook for the rest of 2021 assumes that inflationary and supply chain headwinds will persist, but we are planning for some improvement and the supply chain situation over the course of the rest of the year.
For 2021 we now estimate that we'll generate free cash flow and the range of 300 to 325 million, which represents around 75 per cent conversion on adjusted net income at the midpoint.
This is down slightly from our prior guide due to anticipated higher working capital to support the sales growth.
We continue to expect Capex spending of around 150 million for just over 3 and a half per cent of sales, which include the ongoing growth investments and areas like renewable energy and marine.
We anticipate net interest expense of around $60 million for the full year, which is unchanged from our prior outlook.
And as I mentioned earlier, we expect the tax rate to be around 25 per cent.
So to summarize we delivered record performance and the second quarter by serving our customers well and operating with excellence.
We are confident and our ability to delivered record to deliver record sales and earnings performance in 2020.1.
And with markets continuing to strengthen we're very positive on 2020.2.
This concludes our formal remarks, and we will now open the line for questions operator.
Yes, Sir Thank you and as a reminder, if you would like to ask a question. Please.
Star 1 on your telephone keypad.
And we are using a speakerphone. Please make sure your mute function is turned off.
And again Thats Star 1 of you would like to ask a question.
And well now take a question from Stephen Volkmann with Jefferies.
Great and good morning, guys. Thanks for taking my questions.
I was.
I was a little surprised I guess just on the commentary relative to mix I think 1 or both of you said that Oh. He was just quite a bit stronger than aftermarket is that just because aftermarket doesn't.
It isn't as volatile or is there something of a holding back do you think the aftermarket that maybe you're even prioritizing OE versus aftermarket and this environment and I don't know just any commentary on kind of the thinking around that.
Yes, Steve This is Phil I'll take and I think you know in the quarter I think the right way to look at it as you know last year, we were down so much on the mobile side, and particularly OEM customers like automotive and true.
Truck customers, which recovered and off highway as well, which recovered you know relatively more and the second quarter of this year, just kind of percentage basis. So that that drove most of the most of the negative mix and the quarter you know year on year I would say sequentially. It was roughly flat with the first quarter. So I think from that standpoint, it was relatively flat.
But I think and when you look at the it's really OEM that drives that mix for us versus distribution and then you know with more of that and mobile and process and I think this quarter with what we saw on the on highway and off highway sectors. In particular were the biggest drivers of the mix.
Okay, all right that makes sense and then.
And maybe can you just talk about pricing in the aftermarket of I would think you'd be able to adjust that sort of more quickly and.
It doesn't seem like that's happening as much as I might have thought just any outlook, there and I will pass it on thanks.
Yeah. The specific as you know, Steve we have a lot of pricing mechanisms, we have oh of thousands and thousands of part numbers and customers and the fragmentation.
Is good from a stickiness standpoint, Oh on the.
The stickiness of the price, but also and a lot of complexity within that so some of your question on distribution and we did raise prices late in the second quarter for.
The global distribution and I'll say and.
And that's a big part of why we expect pricing to be more favorable and the second half and the first half.
In addition to that we have most of our certainly all of our contracts that extend out the extended periods have surcharge mechanisms that lag sometimes of quarter, sometimes a couple of quarters.
Those are passing through and and increasing a small uptick and the second quarter, we'll see more of that and and the second half and then where we have contractual pricing as it opens all the more of that would be on a calendar basis, but some of that is open as well.
We started taking action there so but you will I think the evidence of our the distribution pricing will be.
And more evident and the second half than what you saw in the second quarter.
Alright, Thank you guys.
Thanks, Steve.
Well now take a question from David Raso with Evercore ISI.
Hi, Thank you for the time I was speaking about 22 of these price increases you're putting in towards the end of the quarter and distribution thinking through contracts that roll off and you know it is.
Assuming a bump up and prices on those contracts when.
When you think about your pricing carrying into 'twenty 2.
Actions already taken and just being logical about you know some bump up on the contracts that are rolling off how should we think about how twenty-two starts on pricing gains just with actions already in place and some of those contract issues and the second part of that and the cost side given some of the long lead times and you know some things at your own disposal wells.
And that hey, if we feel comfortable on our pricing, maybe we lock and cost a little earlier and just trying to get a feel of the price cost dynamic starting 'twenty 2 things.
And things that you can lock in and and actions already taken thank you.
We certainly would expect the price cost dynamic for us a trillion Bert in 'twenty, 2 and I think god of the magnitude of that remains to be seen but.
And certainly expect it to be positive.
By the time, we get to January of 'twenty, 2 we'll have the carryover of the actions that we're taking.
And now and then we'll have contractual actions then.
And you know the material shot up and the fourth quarter of last year and has been creeping up since.
So specifically on the material side would certainly expect that to go into next year of positive I think the magnitude of the price, particularly on the contractual side will somewhat depend on what happens with with material costs and then it'll be more if the material cost continues to go up or a little less of the material cost.
Flat lines for receipts from here, but expect it to be.
You know pretty good pricing environment, and obviously with demand as strong as it is we choose to be a little pick your AR with the how we partake in that if we if we so choose as well, but we think we we think we're a feel good the weekend both move prices up the price cost positive.
And gained share next year as well.
And so if I heard you correctly I think you said 51 bps of.
The better pricing was that sequential first half second half and if that's the case, how should we think about that year over year and January.
More than 50 bps year on year second half was my comments, so second half would expect more than 50 basis points.
And we'd expect that the rollover the next year plus more.
But again the 50 bps was the sequential comment correct.
Or is that year over year of the 50 bps year over year. So yeah. It was year over year and give you a year over year alright. Thank you very much sequential tart and it started with sequential comment of pricing will be better sequentially, but it was 50 basis points favorable year on year yeah.
Year over year, but then you have been greater in January year over year.
Yes right.
Okay. Thank you very much.
Thanks, David.
And as a final reminder of that is star 1 of you would like to ask the question and well pause for just a moment.
Okay.
Yeah.
Okay and now we'll take our next question. Please.
Okay, Great well now take a question for Steve Barger with Keybanc capital markets.
Hey, good morning, guys. Thanks.
The first Steve Rich.
Rich just staying on that line of thought about the.
All of the possible outcomes around pricing and as it relates to your contracts. What's your view on how input cost play out and the second half and into 'twenty 2 what what are you hearing from suppliers.
Yeah.
I believe under the scenario I described of a robust industrial market next year. They will continue to go up and of our price and we'll have to go up more to cover it and I think we're in a good position to do that.
I think the step change the on steel cost is over I don't think we will see another.
Step change like we saw the fourth quarter, but other guys you'll continue to see pressure there.
And then as I described and my comments as well, there's certainly some pressure on the labor side.
As well. So we are you know we're preparing for a.
The gradually increasing cost environment through the second half and into next year.
Yeah.
And I know, it's too early to get specific on next year, but you did kind of bring it up with Incrementals under pressure this year because of all the things we've talked about if we get into the mid to high single digit growth next year organically is it possible to think that youre going to run above that typical incremental and and put up double digit earnings growth.
Yeah.
Yes, and yes, I would say definitely better Incrementals next year than this year and wood.
And would expect our.
Our operations to run better next year, and then and a little less churn.
There are weighted and then the big want him to talk about it I mean, the we.
We came in and probably undershot pricing to start the year, where we're starting to make of men's for that but I would not expect that the happen next year. So certainly would expect significantly better incrementals.
The next year and I think you know.
We should get good leverage on a on a mid single digit low double digit revenue situation.
And you know I think we have the.
The capacity and ramp ability too to get up to those kind of levels should the should the demand situation and run it run through that way next year.
Yes, the only and I might add to that.
Is that you know you look back in history, Steve you look back and 17 as an example, we would've we ran.
Below the 20% Incrementals of that year, and then they stepped up and <unk> and that particular, they stepped up to north of 30% and I think this year our guidance kind of implies just shy of 20% of high teens 20 percentage kind of incrementals.
Year on year, and I think that's with the perfect storm of all of the things we're dealing with this year. So you know I think the.
Performance is actually quite good excluding temporary cost actions from last year, taking into account some of the.
The unique I would say rather rather unique headwinds this year. So I think moving fast for the next year with pricing if the topline cooperates I agree with rich and I think it will be a step up and incrementals and a and a step up and step up from there.
Got it and.
And as I look at slide 11, and the strong growth rates across the geographies can we just talk about available capacity and the footprint you've done a lot of acquisitions over the past few years do you have room to build out production without a lot of capex dollars to support or to meet this demand.
Yeah, I would expect our capex to stay pretty consistent with where its been you know we do have a heavy mix still going on and expanding our renewable capacity and there'd be nothing there that would preclude us from a hit and the double digit type growth next.
I mean, we really just and most of these areas just kind of got back to where we were and 19 somewhere above some are still below.
So no we think we'd be and really good position for next year.
And I'll just ask 1 more day.
You talked about the back half being at parity maybe with on the top line do you think that <unk> will be the highest EPS quarter or which is typically the case right, but all of our well the back half ramp and pricing come through the make 3 Q are you now at or above what you put up for <unk>.
Well.
The Q.
Fourth quarter, we would expect you to be of stepped down typically so you'd be looking at second quarter of our third quarter second quarter pretty close I think to get to the high end of the guide and on the lower end of the guide would be a little a little further down from that yes, Steve I would probably say if you look at sort of the midpoint of the guide.
And with sort of imply at least and play sort of third quarter kind of kind of flattish with the second quarter on the topline.
Which would normally it would normally be of stepped down the kind of fly ash and the topline and then with a little bit of a decline from third to fourth with a little bit of seasonality, albeit less than what we would normally expect and the second half and so I think when you. When you look at that we would think of.
Margin progressed for the rest of the year off the second quarter, you know probably flattish into Q3, and then a volume related slides.
<unk> stepped down and in Q4 would be the right way to look at and take into account the volume and the seasonality that we would see and the in the fourth quarter. So second quarter, probably with the tax adjustment is probably at least the.
Penny or 2 above the third quarter, and then and then adjusted from there and again talking from the midpoint and then as things progress if we do better than that obviously, we'd be north and.
And so forth.
Understood No that's great detail I appreciate it.
Thanks, Steve.
Yeah.
And we'll now take our next question from Stanley Elliott with Stifel.
Hey, good morning, guys. Thank you all for taking the question.
You mentioned M&A and you're getting close to the low end of your targeted range. You mentioned M&A can you talk about what you're seeing out there in terms of your deal pipeline I mean, the large deal kind of happened here recently with low.
To see what you are seeing both in terms of of volume and then also in terms of of price points.
I would say volume is back to pre pandemic levels of.
Price points.
I think expectations are high and it depends on also if you look at it forward versus the trailing because obviously most of these you'd be looking at right now.
And still have fairly significant pandemic impact and them.
But I think the of the pipeline is as healthy and certainly would expect to be active and the AR and the in the coming 12 months so to say.
Yeah.
Perfect. Thank you very much.
Thanks Pam.
And it appears there are no further questions and I'd like to turn the conference back over to our presenters.
Excellent.
Okay. Thanks, Anna and thank you everyone for joining us today, if you of any further questions. After today's call. Please contact me. Thank you and this concludes our call.
And once again that does conclude today's conference. We thank you all for your participation you may now.
Good day.
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