Q3 2022 Element Solutions Inc Earnings Call
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Yeah.
Ladies and gentlemen, good morning, My name is Abby and I will be your conference operator today.
At this time I would like to welcome everyone to the element solutions incorporated third quarter 2022 financial results Conference call.
Today's conference is being recorded and all lines have been placed on mute to prevent any background noise.
After the Speakers' remarks, there will be a question and answer session. If you would like to ask a question. During this time simply press the star key followed by the number one on your telephone keypad.
If you would like to withdraw your question simply press Star one once again.
Thank you and I will now turn the conference over to the room Gokarn Senior director of strategy and Finance you may begin.
Good morning, and thank you for participating in our third quarter 2022 earnings Conference call. Joining me are our CEO banquet clutch and <unk>.
Oh carry Goldman in accordance with regulation FD. We are webcasting. This conference call a replay will be made available in the investors section of the company's website. Shortly after the completion of the call.
During today's call, we will make certain forward looking statements that reflect our current views about the company's future performance and financial results. These statements are based on assumptions and expectations of future events that are subject to risks and uncertainties.
Please refer to our earnings release supplemental slides and most recent SEC filings for a discussion of material risk factors that could cause actual results to differ from our expectations.
Materials can be found on the company's website in the investors section under news and events.
Today's materials also include financial information that has not been prepared in accordance with U S. GAAP.
Refer to the earnings release and supplemental slides for definitions and reconciliations of these non-GAAP measures to comparable GAAP financial measures. It is now my pleasure to introduce Ben <unk> CEO of element solutions.
Thank you Maria and good morning, everyone and thank you for joining.
In the third quarter element solutions produced solid top and bottom line organic growth, despite an environment where macro fundamental decline.
Key end markets, such as consumer electronics, and mobile phones softened further.
Automotive did not recover in line with expectations and the continued strength of the U S. Dollar drove additional foreign exchange translation headwinds.
Despite these challenges both of our operating segments delivered organic growth in the mid single digits as pricing actions, new business wins and a focus on high growth electronics applications helped to offset declining volumes.
This is significant outperformance against our end markets.
On the bottom line cost management from synergies and actions taken in the quarter contributed to sequential margin expansion and adjusted EBITDA growth.
Demand across the electronics ecosystem deteriorated in the third quarter and the typical seasonal pattern of sequential growth from Q2 Q3 did not materialize.
In September European activity levels did not ramp following August holiday.
Global handset volumes declined an estimated 12% year over year in the third quarter of deceleration from a 7% year over year decline in the second quarter.
What started earlier in 2022 as weak demand in the local Chinese market, where we have more limited exposure has penetrated demand for ex China mobile Oems.
While we expect to see continued robust growth in our power electronics portfolio and the benefits of pricing actions. We took earlier in the year our outlook for the rest of 2022 across the electronics portfolio as for current trends to continue.
Secular growth is not linear and we believe the current trend is not reflected any permanent change in the industry.
The growth opportunities, we have in power electronics, <unk> enabled devices and networks and sustainable chemistry are substantial overtime.
We are not flowing our investment in these longer term growth opportunities.
Our industrial portfolio automotive is our largest exposure we see a structurally under supplied global market, where production recovery is more a question of timing and magnitude.
Oems continue to Miss their forecast production rates given supply constraints. However.
However, given economic softness, particularly in Europe , we believe that the recovery will occur over a longer timeframe than was previously forecasted.
While unit production improve sequentially in Q3, the recovery was subdued relative to industry expectation.
Here too the long term trend appears positive as reflected in the elevated levels of customer engagement and new business wins, our commercial teams have closed year to date.
We are well positioned as a leading technology enabler for the automotive supply chain and the expected benefit disproportionately when production volumes inevitably recover.
Even with a modest recovery in Q4 2022.
Reduction.
This year, we'll add more than 15% below 2018 levels.
On slide three you can see a summary of our third quarter financial results.
We grew the top line, 5% organically.
Significant portion of that organic growth was driven by both surcharge based and negotiated price increases.
On a constant currency basis, adjusted EBITDA grew 11% year on year.
Adjusted EBITDA margin improved 40 basis points with lower pass through metal prices, driving roughly 60 basis points of margin tailwind year over year.
The steep SaaS decline in prices midyear left us with purchases well above our eventual selling price.
This had a negative impact on gross profit in the quarter, but the losses were largely offset by metal hedge gains captured in adjusted EBITDA.
This is how our metals pricing and our hedging program are designed to work foreign.
Foreign exchange fluctuations drove sizable reduction to our earnings in the quarter, representing a roughly $12 million year on year headwind to adjusted EBITDA.
Excluding the impact of $93 million of pass through metal sales in our assembly solutions business, our adjusted EBITDA margin would've been 25% in the quarter.
Adjusted EPS grew 6% on a reported basis, despite a negative 9% impact from FX translation.
Gary will now take you through our third quarter business results in more detail Gary.
Thanks, Pat and good morning, everyone.
On slide four we share additional detail on the drivers of organic net sales growth in our two segments.
Organic growth for electronics was 5% year over year in the third quarter as pricing and growth in power electronics, generally offset consumer electronics softness in Asia.
This compared favorably to the overall electronics and multiple end markets that were down in the low single digits and low double digits, respectively year over year.
Our circuitry solutions vertical grew 1% organically with the price actions offsetting sharp slowdown in the memory market.
While it's slow customer activity throughout Asia.
Dr Solutions grew 3% organically in the business saw continued end market demand for our wafer, creating advanced packaging and advanced Assembly products.
This was tempered however by softer demand.
Our circuitry and semiconductor benefited from higher surcharge revenue driven by increases in raw material costs.
So roughly 2% for the organic growth and the overall electronics segment.
In our assembly business, we thought sustained growth and higher end applications, which drove a 9% increase in organic sales.
The year over year basis, adjusted EBITDA margins in our electronics segment expanded 20 basis points.
Lower metal prices had a positive year over year impact to margins.
At the same time gross profit dollars were negatively impacted by the timing sharp decline in tin prices within the quarter.
Offsetting this was over $5 million realized metal hedge gains are reported through other income and are included in our adjusted EBITDA.
Product mix was also a headwind assembly, drawing faster that circuitry and semiconductor in the quarter.
Organic net sales and industrial and specialty increased 6% year over year.
The growth trends diverged across the three businesses within the segment.
Industrial solutions grew 7% organically, which was driven primarily by pricing actions and surcharges.
It doesn't to auto which is roughly 40% of the business grew mid single digits.
We also saw some sequential softening in European construction and industrial end markets that had been resilient in the first half of the year we.
We anticipate this trend will likely continue into the fourth quarter given the dynamics in the region.
Graphic solutions declined 3% organically year over year despite.
Despite new business that contributed sale and the impact of additional pricing actions you have seen a slowdown in new package designs in Europe , and North America we.
We are making progress on multiple initiatives designed to accelerate sales and improve margin in this business in 2023.
Energy solutions grew 15% organically despite a longer than typical lag following increased energy prices momentum in this business is picking up.
We are seeing increased drilling activity, which should lead to increased production as well.
Industrial and specialty grew adjusted EBITDA, 38% on a constant currency basis, including the contribution of the <unk>.
And synergies from our recent acquisition <unk>.
<unk> improved by 160 basis points year on year.
Hey, Mark to electronics cost management in the quarter helped to offset the combination of increased logistics costs and negative mix and raw material inflation and our smaller businesses.
The substantial portion of our operating cost reduction in the quarter came from reduced variable compensation expense assumptions that reflect the change in our near term outlook.
Our bonus program structurally offset deviations in earnings.
And it's working as designed.
Moving to slide five we cover cash flow and the balance sheet.
We generated $116 million of free cash flow in the quarter, reflecting a significant release of working capital.
Sales declined and safety stocks moderated.
We expect a higher level of working capital released in the fourth quarter as both these trends continue.
Our other use of cash in the quarter, including cash taxes, Capex and interest all came in better than our expectations.
We increased our share repurchase activity in the quarter buying back approximately $55 million stock of roughly 3 million shares.
As of the end of Q3, we have repurchased more than 6 million shares. This year are well over 2% of our shares outstanding.
Our remaining stock buyback authorization was $616 million as of September 30th.
Continued to be active in the market.
Our net leverage ratio improved in the quarter at three one times, despite returning over $70 million cash to shareholders.
All of our floating rate debt swapped to fixed through the end of next year.
Rising interest rates are actually improving our cash interest expense as we earned more income from our cash balance.
The term loans are also swap Trs and that cross currency swap was approximately $150 million in the money at quarter end effectively reducing our leverage ratio to two nine times.
Our balance sheet and liquidity position are very strong.
That I will turn the call back to back.
Thank you Carrie.
Despite our growth in Q3, it's clear that our end markets are softening in line with the rest of the global economy.
We've reduced our outlook for automotive recovery in the fourth quarter, and now anticipate a softer consumer electronics environment as well.
In addition, the translational headwind from the strong U S. Dollar has grown significantly in recent months in.
In Q4, FX will be a greater than $15 million year over year headwinds in the current headwind to 2023, adjusted EBITDA is approximately $30 million.
As a result of these impacts we now expect fourth quarter adjusted EBITDA to be approximately flat year over year on a constant currency basis and full year 2022, adjusted EBITDA in the range of $525 million to $530 million.
Accordingly, we are updating our full year 2022, adjusted EPS guidance to between $1 40 to $1 42, and free cash flow guidance to approximately $250 million.
While the consumable nature of our products and our highly variable cost structure helped insulate our business from macro volatility we're not immune.
However, we remain highly confident that element solutions is well positioned to continue to deliver long term profitable growth.
We see opportunity in this operating environment.
Our scale liquidity and strategic horizon should allow us the stability to weather and capitalize on these markets our customers are engaging with and interested in our new technology platforms, and our commercial and technical teams remain.
This is a reflection of the longer term momentum in our markets and the persistent iterative innovation, we provide to enable our customers' products.
I'd like to thank all of our stakeholders for their continued support of element solutions and in particular express my appreciation to our talented and dedicated people around the world responsible for another quarter of growth.
Our business can withstand any market volatility, while retaining strong margins and cash flow and our team has demonstrated an ability to balance that with maintaining our long term strategic focus and orientation.
With that operator, please open the lines for questions.
Thank you.
And at this time I would like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad and we will pause for just a moment to compile the Q&A roster.
And we will take our first question from Kieran de Bruin with Mizuho Corporation. Your line is open.
Hey, good morning.
Good morning, Karen.
Morning.
Just wanted to touch a little bit on margins. It seems like they held in pretty well in <unk> <unk>.
Been showing some progress, particularly in the <unk> segment.
How should we think about that into the fourth quarter and any preliminary thoughts.
The trends kind of progress into 2023. It seems like you do have some cost levers.
Things recover there should be substantial.
Leverage on the upside so any comments on that would be helpful.
Sure absolutely Kieran So couple of couple of things to call out in Q3 with regard to margin and then we can talk about the go forward trajectory.
For starters metal prices came in and that's a tailwind to margin, we talked about that being about 60 basis points of an improvement.
Cost levers in the quarter to preserve profit that's the hallmark of this business that in difficult times, we can reduce costs and preserve profits.
We saw an impact from that as well so sequentially and year over year margins improved.
As we roll into Q4.
Obviously, we are expecting a sequential decline in sales given end markets and typical seasonality so margins will be under a bit of pressure relative to Q3, driven by that but we've taken a lot of price over the past year, we're managing cost and we've got more opportunity for cost into Q4, and particularly into 2023 and the margin should improve.
As we enter 2023 in light of the dynamics at work there.
Great and then maybe just a quick follow up on the end markets just on the automotive front I mean, Europe does seem to be weaker, but there still seems to be some kind of recovery and strength, especially on kind of the EV side in China and U S. So if you could just.
Walk us through what Youre seeing by by region maybe.
And just.
I know the outlook for the fourth quarter is a little bit weaker than what you were originally expecting but some of.
Some commentary from other kind of peers in the industry has alluded to the fact that they expect a meaningful recovery at some point next year on the automotive side. So just.
Thoughts there.
Yes, so the auto market is recovering I would say sequentially, but it didn't recover to the extent or it didn't grow to the extent that it was expected to grow by the industry and industry observers in Q3, and similarly expectations for Q4 have moderated a bit.
But and so.
So our comments in the script, we just went through.
We are seeing a recovery, but we expect it to be a bit more slow than one would've expected entering the second half.
We.
Our seeing that recovery differently in different regions. So things in Europe are remain soft.
China has seen a more accelerated recovery that has skewed towards the low end EV America has been reasonably stable.
And ESI business perspective, our business Hasnt really tracked with from a timing perspective with autos recently right. If you look at last year, we significantly significantly outperformed units in our auto business in this quarter in our business, we saw growth in our auto market, but not to the same extent as the overall.
<unk>.
That's not a comment on share we're confident in our share and we view this as more of a timing issue.
I would say that activity levels at our largest customers who are the largest players in the <unk> market in Europe don't really reflect the estimates we're seeing for auto production increases in Europe .
But we are seeing growth in that market, it's been moderated in the Ais business by a slowdown in the construction and industrial space.
We do expect 2023 to be better from an auto standpoint.
Great. Thank you very much.
And we will take our next question from Josh Spector with UBS financial your line is open.
Yeah, Hey, guys good morning.
Just.
Curious if you could provide some color on volumes and I guess, a few things there one your expectations for fourth quarter.
And it might be helpful to provide some context. If you can maybe first half volumes on a multiyear stack versus 2019 versus where things are now, it's just becoming a bit harder to differentiate given where pricing is and just given the organic reporting so I'm trying to kind of level set to where things are kind of exiting the year versus how you performed over the.
Couple.
Yeah sure Josh Good question, so as we called out most of our growth this quarter.
What has driven our our growth this quarter was driven more by pricing both negotiated price increases and surcharge pricing and by volume volume was down.
In both businesses.
The driver of that.
Phone market, which was down 12% year on year in the third quarter and the construction and industrial business General industrial in the Ais business is also down from a volume perspective.
In Q4.
We expect to see similar dynamics from a volume standpoint.
We will be well below 2021 volumes.
From a circuitry perspective, our circuitry business is looking more like 2018 to.
To give you a sense for how far that.
Market has fallen which gives us frankly, a lot of confidence in a very strong recovery.
The trends propelling the business forward.
Our durable trends and we believe we've just hit an air pocket.
In terms of the Mega trends propelling this business around.
<unk> of computing power.
The need for more data storage <unk> enabled devices and <unk> networks. Those things are all still happening, but they clearly have pushed past the first half over first half comp entering 2023 will be challenging because of the market was quite healthy.
Particularly in electronics in 2022.
Yeah.
Okay, Thanks, and I guess just.
The easy math here is annualized second half EBITDA into next year, you're about $480 million, maybe a little bit worse than that with FX I guess.
Why would that be wrong for investors to look at it that way what kind of visibility do you have or other cost levers you can pull for that not to be the right way to think about 2023 or is it the right way.
We're not we're not in a position to give 2023 guidance today.
Clearly a very dynamic market environment.
But these are growth markets and historically, we've seen strong snap back when you think about the mobile phone market right one platform isn't as successful as.
Typically we've seen the subsequent platform being more successful.
The auto market.
Is recovering and is expected to recover into 2023 and there are additional cost levers at our disposal should our market's not recover so not going to comment on what the right number to think about for 2023 is but.
If the market dynamics arent recovering our cost levers and there are reasons to believe that several of our end markets should be healthy at some point in 2023.
Okay. Thank you.
Yeah.
And we will take our next question from John Roberts with Credit Suisse. Your line is open.
Thank you.
SG&A expense of 131 for the R&D expense of 11 points rate how much did they benefit from the reversal of accrued compensation in the first half and did those expenses go up sequentially in the fourth quarter, because you won't have the reversals again.
Yes, so we did.
Throw cost levers as we mentioned John in the third quarter and some of those are true ups based on first half.
Accruals. So you could think about that as maybe a 10 ish million dollar cost.
<unk>.
Savings in Q3 of which we won't have we won't have that full lever at our disposal in Q4, but there are other levelers levers, we could throw if the business isn't tracking organically.
Plan from a top line and GP perspective to deliver on our on our fourth quarter.
And John I would just in that to that.
There is also about $8 million to $10 million of FX.
Impacting those year over year numbers as well.
Got it thank you.
Your own inventories were down sequentially I don't know whether metals contributed to that sequential inventory decline, but usually when the end market sales declined inventories back up all along the supply chain do you have any visibility to inventories down the supply chain beyond you.
Yeah.
Yes, so a few observations first our inventories declined sequentially. Some of that was metal price. Some of that was FX and some of that was a reduction in safety stocks as we've seen our supply chain stabilizing not completely but beginning to stabilize as.
As we look into the channel there definitely has been some level of inventory unwind associated with demand.
Ami conductor market in the data storage market for example.
And.
There may be some more of that in Q4, as we look forward and.
Triangulate, what our expectation for demand is relative to end markets, but typically in our business there isn't a significant amount of inventory of our product in the supply chain.
And and.
And we don't believe that dynamic has changed.
Okay. Thank you.
Okay.
We will take our next question from Stephen Byrne with Bank of America. Your line is open.
Okay.
Hi, This is Rob Hoffman on for Steve Byrne.
Question is how would you split the new wins into buckets of share gains and cross selling our customer capacity expansions.
Any of this from our strategic initiatives identified by ear size business unit leaders.
Yes.
Thanks, Ross so.
We've been winning new business and all of those categories frankly.
We have seen.
New sites opening driven by either geopolitics out of market in Asia or out of markets in Europe , we've seen.
Significant new wins in adjacent market and our semiconductor space in our <unk> business, which is water treatment.
And.
Anytime we get more than a quarter, if you will because more than a quarter of the new lines that are coming in from a capacity perspective, we are gaining share and we believe our performance.
Year to date and even in this quarter is demonstrative of our getting more than our disproportionate amount of business. If you look at unit performance relative to our performance we see.
We see ourselves as improving our share position and this is largely driven by strategic focus.
And what we call the IR strategy development and implementation.
Program still early.
In terms of its lifecycle and element.
Ben.
Rewarding.
Thank you.
And just a follow up how much of your assembly sales are from.
Silver sintering technology used in EV Motors, where do you expect sales for this product line to go longer term with this technology views in stationary storage.
So we haven't we haven't disclosed sales from that product, but when we refer to power electronics that is.
That is that market and we have seen continued growth in power electronics year on year and expect that growth to continue in Q4 and into 2023.
Primary application for that product line is in.
<unk> is in EV high end Evs, but were seeing interest in it for infrastructure.
And other applications.
Early days very long runway and expectations for continued strong growth.
Great. Thank you.
Okay.
And as a reminder, it is star one if you would like to ask a question.
And we will take our next question from John Ken Wong Tang with C. J F Securities. Your line is open.
Good morning. Thank you for taking my questions. I was wondering if you could talk about your expectations for content growth per application.
In the businesses, where that's relevant auto electronics gotcha, whereas that metric.
As you see it going forward compared to maybe what your historical was.
Your program wins, so far and what your customers are telling you.
Yes, Thanks John .
What we've said is that we get a 15% content uplift on a <unk> phone versus a comparable <unk> following <unk>.
<unk> penetration of mobile phone units is still relatively low.
Bumping around 50% and so theres more uplift opportunity from a content standpoint.
And we're trying to grow our value per unit entering markets like thermal interface materials, and conformal coating and other types of electronics adhesives, where we have a very small market position, but good technology that we've acquired through acquisition.
In in electric vehicles, we have a very significant content opportunity.
Driven by what we were just talking about power electronics for example.
And that's one and a half to two times the content on our comp on an EV versus comparable.
Internal combustion car and EV as a percentage of the automotive fleet remaining.
Quite low so that dynamic is changing rapidly and so we see significant opportunity from a content perspective, and even on an I E.
As new models years are introduced there is more electronics, there's more decorative and functional surface treatment and so we see an uplift.
Couple of points.
Of content growth per year over a unit growth going forward.
Great. Thank you and I was wondering if you could also comment a bit more in the semiconductor business, whereas the most exposed in terms of market applications as consumer or more.
Farms computing and networking just trying to get a sense of where is that that business is going to go given the current economy and demand.
Does that market yes.
So our semi business is more exposed on the logic side than the memory side. If you were to split the market into two.
Logic versus memory split is applicable one and we've got more exposure on the logic side than the memory side and we are gaining significant traction.
In.
In heterogeneous packaging. So if you think about advanced packaging applications.
System and package designs without that our capabilities from the high end Circuit Board side and the assembly side are very relevant.
And the next generation chips and chip lifts.
Which is a nascent market that's been growing very rapidly and continues to grow rapidly.
Where we have a very significant opportunity, but again, that's more on the logic side than the memory side.
Okay.
Final one for me do you expect any change in your capital allocation strategy, you've been buying back a lot of shares.
But maybe are there more opportunities maybe in smaller acquisitions or tuck ins with given the state of the market.
Thank you.
What you guys are planning and thinking about going forward.
Yes, the simple answer is no no change John .
We're going to remain opportunistic.
And deploy capital prudently to compound earnings per share over the past several quarters, it's been in the form of buybacks and Wouldnt expect that to change.
In Q4.
Understood. Thank you.
Right.
Okay.
And we will take our next question from Chris Capps with loop capital. Your line is open.
Yeah.
Yes, good morning so.
I had a question <unk> you frame your electronics business as having not much exposure to.
Personal computer Pcbs, which are more commoditized and <unk> smartphones.
And just looking at the macro that seems to be the area, where there's the most pronounced weakness in consumer electronics ecosystem.
Even even as its.
Weakness is broad based so I'm just wondering as you saw your electronic business in circuitry.
Particular endure some abrupt sequential weakening during the third quarter I was just wondering which end markets do you attribute that to is it mostly smartphone or any way to bracket or bucket those end markets, where you see.
Where do you see attributable to the sequential weakening.
Yeah, absolutely, Chris So I'd say two things the two biggest market.
That impacted the third quarter were smartphones and data storage.
This is the first quarter.
We can remember.
And the corporate memory here is quite long.
Q3 was softer in electronics in Q2, right every year there has been a ramp in Q3 associated with new mobile platform launches and this year that just didn't happen.
Which was a big surprise.
<unk> units decelerated, they were down 7% year over year in Q2, 12% in Q3 and the data storage market was helping us through the first half the mobile mobile market was was already soft entering Q3, or just softened and data storage was very robust.
In the first half and that market really saw a significant decline in Q3.
From the handful of customers, we have there and so those two markets are the biggest drivers of the sequential weakness not Pcs.
Got it that's helpful. And then my follow up is kind of more about.
A bigger picture commercial strategy sort of question as I've observed electronic chemicals feeding into the semiconductor space over many years, but during periods of downturns, there is actually sort of an opportunity when the fabs.
Theres more.
Tool time, if you will an opportunity for for suppliers to get products qualified maybe innovative and innovations that help lower the cost of ownership for the for the fab operators. So I'm wondering if there's something similar dynamic or opportunity in the printed circuit board ecosystem with presumably is going to be at least a.
An air pocket.
Soft patch where there's.
On the utilization of those assets if the if that's an opportunity for you to do something.
Commercially for.
For example to ramp up the adoption of your Electrolyzed copper plating solution something like that how do you think about that dynamic. Thank you.
Thanks, Chris.
Great observation, which is the day when utilization is lower there is more time for trials and that's something that we certainly intend to seize upon.
And that is a dynamic that is true in semiconductor market as well as as well as the circuit board market and you've heard us say on prior calls and it continues to be the case that customer activity customer engagement remains very high and I don't think thats necessarily being driven by utilization levels, I think thats being driven by technology collections, but utilization levels being lower.
It may accelerate some of the technology inflection and it's certainly something that is not lost on us.
I appreciate the color. Thanks.
Thanks, Chris.
And we will take our next question from Angel Castillo with Morgan Stanley . Your line is open.
Hello. This is Stefan sitting in for Angel Castillo. Thanks for taking my question guys.
Good morning.
Good morning at the Investor Day, you laid out a long term 2026 EPS target of $2.50.
That implied an annual CAGR of over 10%.
Admittedly there is still a lot of time between now and then but given all the macro uncertainty and near term challenges do you still feel like this is an appropriate way to think of annual EPS growth I guess, particularly in 2023, given all the cost levers you've mentioned.
Yes, it's a good.
Good question, Stefan but our targets are unchanged. They are long term targets for a reason if we were to put ourselves in our shoes. In 2020, we would have thought that it was nearly impossible to achieve our goal for 2022, yet we did in 2021.
These are dynamic market.
And our company is executing and well positioned to benefit from growth in these markets. Historically, we've seen strong snapback from air pockets like this.
So our goal is unchanged and our confidence in our ability to deliver that goes on.
Great. Thank you and then as a follow up how are you seeing the order book trends I know, it's early in the quarter, but I guess, the first few weeks of the quarter.
Yes.
<unk> is playing out in line with what we would've expected and what we guided towards for the fourth quarter.
Great. Thank you.
Thanks Stefan.
And ladies and gentlemen, there are no further questions at this time I will now turn the call back over to Mr. Ben <unk> for closing remarks.
Thanks, Abby and thanks, everybody again for joining US today, we look forward to seeing many of you soon and speaking with you as well. Thank you.
Yes.
And this concludes today's conference call you may now disconnect.
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Okay.
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Yes.
Thank you.
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